I feel like this is the crux of it -- Fidelity seems to have gone out of their way to handle this issue poorly, and they've severely damaged their reputation in the process.... I've never seen a business I've personally dealt with burn so much goodwill so quickly....
The original solution was heavy-handed and not well thought out -- exactly what we expect these days from a big corporation.
That said, Fidelity still had an opportunity to salvage the situation. Their customer service people were polite, explained what they could, and tactfully expressed their frustration with the policy (a welcome change from most large corporations these days).
Had Fidelity given their customer service agents the ability to reinstate a reasonable (let's say $15K) deposit limit for those who complained, I doubt we'd be here right now. It's likely that a lot of customers might not have noticed the reduced deposit limits. Heck, I wouldn't even have been offended if they forced me to listen to a 30-second warning about the perils of check kiting, and potential criminal liability if I engage in it.
Their failures can be chocked up to a couple of key factors. Listing these below for future business school students (or if Fidelity would like me to consult for them
):- Fidelity failed to communicate impending changes to customers ahead of time.
- Fidelity's unreasonable limitations (<$1K deposit / day) imposed a significant restriction on a large number of customers.
- Fidelity revealed restrictions on funds *after* customers made the decisions to deposit funds with them.
- Fidelity treated different classes of customers differently and didn't explain -- even in broad terms -- why they were doing so. Most reasonable customers could have understood if they said they were limiting accounts with < $X balance or that had been open for less than Y months.
- The above led some customers to believe that they were being targeted as bad credit risks / potential fraudsters. Or made them wonder if they might be next.
- Fidelity failed to provide talking points to customer service agents, and didn't effectively respond on social media (or on bogleheads.org).
- Fidelity didn't empower customer service agents to override automatic controls, even with good reason.
Hopefully, Schwab or other brokers won't follow in their footsteps.
Statistics: Posted by CashConfessions — Thu Oct 17, 2024 10:27 pm — Replies 7311 — Views 1411787