Some brokerages charge departing clients an exit fee

February 14, 1993|By Knight-Ridder News Service

Are you happy with your brokerage firm? If not, you can always transfer your account elsewhere -- but it may cost you $50 on the way out.

That's right. At least three large brokerage firms now charge an exit fee when clients close an account and transfer cash or securities to a rival firm.

The trend was started early last year by Prudential Securities Inc. Just recently, Shearson Lehman Bros. Inc. and Smith Barney, Harris Upham & Co. announced exit fees of their own.

"There is a cost to doing all that administrative stuff and paperwork," said Bob Connor, a Smith Barney spokesman. "This fee will cover those expenses."

Investors have been bombarded in recent years with a variety of charges. Some firms charge their clients an annual fee for the privilege of trading securities. Others charge fees if too few trades are made.

The fees at Shearson and Smith Barney will take effect tomorrow.

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