American Pension Services early this month sent my account a letter saying they were were fighting with Prosper and were going to charge me fees to hold my IRA with them. This is something that Prosper indicated would not happen (the fees). I'm not particularly concerned but thought I'd mention it to see if anyone else got that letter (presumably everyone with a Prosper IRA did) and to let you know I spoke to Prosper a little while ago and they are working something out. In short their direction was to ignore the letter and they'd be in touch.
I liked APS because they didn't lose my paperwork and successfully opened my account. I don't like them now because they communicated with me. An intermediary service like this should be invisible to investors (until something goes wrong with Prosper). Their fight with Prosper doesn't really interest me, but I'm concerned I will be asked to pay 1% to change custodians.
Is APS just making up a new fee, or is this something that was there all along and being quietly paid by Prosper? Perhaps APS is worried about Prosper's bleeding cash, or maybe Prosper has said they're not going to continue paying it?
I wasn't aware that there was a 1% fee to change custodians. That's in the fine print, seriously?? One of my brokers seems to change similar relationships every darn year; that could really add up if that started happening here. I would not like being at the mercy of someone else's whims.
They claim Prosper is no longer willing to pay their fees on our behalf. Our choices are to pay the fees or move the account (pay the fees).
I think the $10M liability from class action suit has been absorbed in the "operating activities" as stated below (p. 35 of 10-Q):
Net cash used in operating activities was $11,974 and $8,355 for the six months ended June 30, 2013 and 2012, respectively. The increase in cash used in operating activities was primarily attributable to the net loss offset by the class action settlement liability.
So the available cash should be net of this $10M liability.
The $1M net income I referred to before was from "Condensed Statements of Operations" (p. 20). This is actually a good news, since Prosper is now operationally profitable.
I still don't understand why Prosper is penny-pinching on the IRA fees, though.
I also got a letter from APS and immediately voiced my concerns to Prosper. I received an email from Prosper who advised me to ignore the APS letter. I got the impression that Prosper was going to work things out with APS.
It sounded like Prosper's new management was attempting to reneg on the original agreement to pay APS for its services and Prosper reconsidered its position after receiving backlash from Prosper lenders.
The APS letter was a joke. In the APS letter you could either initial the letter and agree to be bound by APS' payment schedule or you could do nothing and be bound to APS' payment schedule anyway. I think the whole purpose of the letter was to put more pressure on Prosper to make good on their purported agreement.
Partial email from Prosper: (no reconciliation with APS, no impact to us)
"We were unfortunately unable to come to an agreement with American Pension Service, but we have signed an agreement with Equity Institutional to act as a custodian for our clients' IRA accounts. We therefore would like to roll over your APS IRA account to Equity Institutional.
Prosper will pay for the fees to change to the new custodian. Prosper will also complete the required paperwork on your behalf to begin the process. We sincerely apologize for any inconvenience this may have caused you, and will make every effort to ensure a smooth transition."
Good job Prosper. Except for the bonehead letter from APS, I wouldn't have even noticed.
dontvote
I got the same email and a phone call from Prosper. On paper it sounds like Prosper is handling this well.
It sounds like Prosper wanted to renegotiate APS rates but APS refused. Poorly played on APS's part.
Have your IRAs finished transferring to Equity Institutional?
I'm having a problem with Equity Institutional and trying to figure out if they are still swamped dealing with these transfers.
Thanks,
Graceful
I forgot to sign the paperwork. Thanks for the reminder.