TB <borekfm[at]pacbell.net> writes:

[re my notes about the content of the BDA application form
from fido - note that I've not actually done such a transfer -
I was only reading the contents of that form - it wouldn't
surprise me if they required additional documentation. So
many things do and often with little warning before one
starts the process rolling! Definitely double check.]

- quote -

So long as the existing custodian doesn't go and start
charging large fees (ie. new loads on the investments as
if they were new investments in the BDA), that probably
makes very good sense.

- quote -

Certainly sounds so. I'd expect the old custodian to try
just about anything to keep the account, though - at
least some hard sales pressure. And an account closure
fee/funds transfer fee is pretty typical - on the order,
as you said, of $50 - and not just for specialized accounts,
but, as far as I know, for most generic brokerage accounts.


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BreadWithSpam[at]fractious.net wrote:
- quote -

Perhaps it's different with the retail side of Fidelity, but
institutional recently added a requirement that a letter be sent from
the prior custodian with a bunch of details, when the IRA assets come
over by check. I had one earlier this year where the letter-exchange
didn't happen soon enough (delay by the soon-to-be-former custodian) and
the original check-request was canceled by the former. But there was no
way to know this was going on really, from both sides things appeared to
be on track. It wasted two months and required multiple sets of paperwork.

And in general I'd say I see maybe a 1/3 - 1/4 failure rate (meaning,
delay or some mistake to correct) on any non-routine IRA transfer, and
funding a BDA with a check from the decedent's IRA would certainly
qualify. Similarly 401k rollovers at prior-employer plans go better if
you use custodian's option, if offered, to do a 401k-to-IRA rollover
within the firm, and then transfer the IRA to your preferred custodian.
No surprise that keeping assets within the custodian is a more
straightforward process than moving them out -- for several reasons!

- quote -

I'm recommending that Rich do an IRA-to-BDA transfer within AIG/AF, and
then BDA-to-BDA, so yes he can use ACAT for this second step. You're
correct that you couldn't use ACAT for moving money from the decedent's
IRA to a BDA at Fidelity.

Oh, one caveat on all this...ACAT often triggers a fee from former
custodian ($50 is typical) but it depends on the account type and
custodian. Worth it, IMO, to avoid a potential several-month delay.

-Tad

Well, my relative called Fidelity, and they strongly advised her
to open the account with American Funds and then submit a
a transfer of assets form.

For what it's worth, the Fidelity IRA-BDA application itself
only lists two funding options -- a transfer from another
Fidelity IRA-BDA and a transfer from an indentically-registered
IRA-BDA at another institution.

--
Rich Carreiro rlc-news[at]rlcarr.com

Tad Borek <borekfm[at]pacbell.net> writes:

- quote -

That stuff all goes into the application for the Fidelity account.
Once the account application has been made and the account is set
up, an account number is generated by Fidelity. The existing
custodian then makes the check out to Fidelity with the account
number in question on it. Fidelity knows exactly what it is and
what to do with it then because it was already set up that way.
Or so it would appear to me - exactly analogous to how one does
a 401k rollover to them, though with a different account app form.
(Take a look at their app - a pdf of it is easily accessible on
their site - it's got places for all the stuff you mention,
including the decedent and date of death)

- quote -

I don't think that's possible for this - it is a new account and
the ACAT requires the accounts to be registered to exactly the
same owner and name, doesn't it? This new account is different
and differently owned from the account from which the assets are
being transferred.


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On Tue, 24 Jul 2007 15:34:41 -0500, Tad Borek <borekfm[at]pacbell.netwrote:


- quote -

Must the new custodian be a brokerage account? For example, could the
Merrill account be liquidated, and the cash sent straight to one of
Fido's Money Market Funds? (And once there, allocated to several
other funds, all without use of a Fido brokerage account.)

I ask this because the usual approach is to open a new account at
Fido, Vanguard, T Rowe Price, etc., then for the investor/IRA owner to
have to go to the old custodian and request a check. Many investors
have trouble with this because of the natural reluctance of the
current custodian to easily give it up.


-HW "Skip" Weldon
Columbia, SC

HW "Skip" Weldon wrote:
- quote -

Skip, you might never see the term ACAT used, it's the system that works
behind the scenes when you request a transfer of assets between
brokerage accounts. Yes, cash comes over too. For that Merrill to
Fidelity example, you would open a Fidelity brokerage account and fill
out a transfer of assets request (whatever they call that form) and
attach a recent statement for your Merrill account.

This works with all sorts of accounts, not just IRAs, but the titling of
the accounts at either end generally needs to match.

-Tad

"HW \"Skip\" Weldon" <skip5700removethis[at]hotmail.com> writes:

- quote -

I've done plenty of ACATs over the years as I moved from
broker to broker before I settled in at Fido. From my
experience, cash comes over as casg.

- quote -

Absolutely.

- quote -

Once the account is open at the new broker/custodian, follow their
procedures to initiate a transfer. For example, at Fido you
can fill out their "Transfer of Assets" form or (depending
on who the source is) you can submit the info through Fido's
website instead of submitting a paper form. Once that's done,
the new broker takes over and you just sit back and wait for
the transfer to complete.

--
Rich Carreiro rlcarr[at]rlcarr.com

On Mon, 23 Jul 2007 20:17:53 -0500, Tad Borek <borekfm[at]pacbell.netwrote:

- quote -

Thanks for explaining this. I hate to appear ignorant (I am ignorant,
I just hate to APPEAR that way), but here's two questions:

1. This apparently applies to rollovers/transfers in kind of stocks
and bonds. Does it also apply to cash? For example, could I close
out a brokerage IRA at Merrill Lynch and transfer the cash via ACAT to
Fidelity mutual funds and buy Fidelity mutual funds?

2. Is this process also available for regular (non-IRA) accounts?


If so, how does an investor or beneficiary initiate ACAT - is it as
simple as contacting the new custodian?


-HW "Skip" Weldon
Columbia, SC

Rich Carreiro wrote:
- quote -

That's a good question. A check to Fidelity F/B/O an existing IRA-BDA
should work. But a) it needs to be made out the right way and b) make
its way through the mail and c) Fidelity probably won't accept the check
without a specifically worded letter from the custodian...saying it's
just a custodian-to-custodian transfer, not reportable, naming the
decedent, and some other details. That's more stuff for the former
custodian to mess up and more steps where you lose track of what is
going on! If you use ACAT the steps are a bit simpler and you can
monitor each step. There's probably less risk of a 1099 being coded
incorrectly as a taxable distribution, and if it happens it's an easy
fix. Checks are messy, I avoid them as much as possible and use ACAT
instead.

[For posterity: I keep saying ACAT...ACAT stands for Automated Customer
Account Transfer. It's an electronic system that links brokerage firms,
and is the easiest way to move securities from one custodian to another.
A nice thing about it is that you don't need to inform your former
custodian/broker of the transfer -- you intitiate a transfer at the
receiving firm, not the delivering firm.]


- quote -

I was thinking of the advantage of having someone to shepherd it along
and correct mistakes, instead of relying on anonymous 800# support from
Bangalore! If you have one person to call up and bug it helps things.
Maybe not this specific advisor, but someone at AIG/AF.

-Tad

Tad Borek <borekfm[at]pacbell.net> writes:

- quote -

I've been told (and given the cite to the Regs.) that the bar on
"rollovers" does *not* include a check being made out to the receiving
inherited IRA (like when someone moving a 401k to an IRA asks to be
sent a check made out to "Fidelity Investments FBO Jane Doe, IRA" --
even though a check is cut and no ACAT transfer happens, that still
counts as a direct trustee-to-trustee movement because the check is
non-negotiable by Jane). So why can't AF just make out an analogous
check and send it to Fido (or my relative) without opening an account
(or opening a "phantom" account that exists just long enough for the
check to be cut and cashed)?

- quote -

Correct. So far only the decedent has signed anything with
this advisor.

- quote -

Well, according to Fido's website, at least some American Funds
(like Bond Fund of America) can be *bought* through Fidelity's
website (I just entered and cancelled an order for ABNDX),
which seems slightly odd to be given that American Funds's website
says their funds can only be bought through an advisor), so
perhaps that can be custodied there.

- quote -

I appreciate you're an advisor too, but that paperwork
is no big deal and (aside from the rules imposed by AF) no advisor
needs to deal with it. It's not complicated.

As I said, the main issue is that my relative has a very bad impression
of the advisor. He gave her the runaround for close to a half-hour
despite being told directly what she wanted, and then suggested something
(a "60-day rollover") that would break the inherited IRA and cost
my relative tens of thousands of dollars in taxes.

--
Rich Carreiro rlc-news[at]rlcarr.com

Rich Carreiro wrote:
- quote -

Rich, you still should be able to do this. The distribution to the
IRA-BDA could be done in-kind so there shouldn't be any loads assessed.
It is correct that she needs to sign on as a client even if only for a
short time period -- that's just a regulatory reality. It's going to be
a new account owned by her, and so far the only person signing a form
with the custodian is the decendent, correct?

That Washington Mutual fund is probably one of the AF family so maybe
all of them are? If so it's possible that she would need to sell all
funds and move to a money-market, if none of the funds can be custodied
through Fidelity retail (I forget how that works with AF). That step may
need to be done to make the transfer work. Generally "liquidate and
transfer" requests via ACAT have mixed results, and the delivering firm
may not honor them. If it's in money-market that should be a
straightforward ACAT transaction...or put another way, "transfer all
holdings in kind" typically works if the only fund held is a
money-market fund, because tagging along with it is "and liquidate and
transfer any MM funds."

It's not a bad thing to have to work with an advisor, someone needs to
handle the paperwork and transfer to the IRA-BDA. And as I said above,
she does need to become a client just to do the distribution to the
IRA-BDA. Maybe get someone else on the AF list if this guy is being a
pain in the neck.

-Tad

Rich Carreiro <rlc-news[at]rlcarr.com> writes:

- quote -

Answering my own question -- it turns out we can't. American
only sells through financial advisors -- you can't even get
forms without being hooked up with an advisor.

--
Rich Carreiro rlc-news[at]rlcarr.com

Tad Borek <borekfm[at]pacbell.net> writes:

- quote -

If her dad's account was directly with the custodian (especially
if the custodian had no-load funds), I'd tell her to do that in
a heartbeat.

However, to me at least, it's somewhat more complicated than that:
* Her dad's IRA is run by a financial advisor affiliated with
AIG(American General Securities)/American Funds (or at least one
who uses AF as the custodian for his clients' accounts). Some of
the funds in the IRA are not AF funds (I recall a Washington Mutual
fund on the statement), but the beneficiary claim form is from American.
* My relative's share is north of $100K, so the advisor isn't thrilled
with losing it. My relative had to talk with him for over 20 minutes
insisting again and again she wanted to roll it to Fidelity before
he told her how to fill out the distributions option of the claims form,
* If she does want to open an IRA-DBA there, he's making it sound
like she needs to sign up to be a client. In addition to the
claims form (which is clearly a straight-from-American form),
there's a "account worksheet" form from AIG with his name pre-filled
in a number of places.
* It looks like AF is a load house. The Bond Fund of America, for
example, appears to have a 3.75% load. I'd hate to have
my relative pay thousands of dollars in loads for an account
that'll only be open for a month or so.
* She's worried the advisor will intentionally or not mess things
up. He already (mistakenly) told her she could take a
"60-day rollover", for example.

One thing we've wondered is if there's any way to cut him out
of the loop -- like sending the claims for straight to American
and so attempting to open an IRA-BDA directly with them
and then doing the ACAT.

--
Rich Carreiro rlc-news[at]rlcarr.com

Rich Carreiro wrote:
- quote -

Rich,
I haven't read the replies to your post (yes was back in Yosemite) but
I'd suggest having your relative set up an IRA-BDA through the custodian
for her father's IRA, and have them transfer her share of the IRA to it.
She can just make like she's leaving everything there. This is the "path
of least resistance" for the change of title for the account.

Simultaneously she should open an IRA-BDA through Fidelity and request a
TOA of the original account using ACAT. She will need to include a copy
of the death certificate, with the account application. The other
custodian doesn't need to get involved if you do it this way. I did one
of these recently (Raymond James to Fido) and it went smoothly.

And in general, I think this is the best approach when moving assets
from one custodian to another. If you tell the former custodian your
intention to transfer assets out, they'll do everything they can to
discourage you. Don't even bother...use ACAT and the assets just journal
over.

-Tad

"kastnna" <kastnna[at]auburnalum.org> wrote in message
news:1184937535.399212.176500[at]g4g2000hsf.googlegroups.com...

- quote -

Have a look back over the previous posts in this "topic." The first remark I
made was as follows: "For sure. I wonder if would be sufficient reason to
sue for damages, if the false information resulted in a financial loss. I
wonder what a court would decide." (end of quote) It seems to me that query
is relevant to the original poster's concerns, or rather to what another
poster said about those concerns.. All subsequent remarks on my part were
responses to your statements, which, I suppose, could have drifted away from
the original question somewhat. But, still, they do touch upon issues
related to financial planning.

On Jul 19, 6:11 pm, "Don" <dwz...[at]telus.net> wrote:
- quote -


"top·ic (t p' k): n. The subject of a speech, essay, thesis, or
discourse. A subject of discussion or conversation."

I was referring to the fact that it has nothing to do with "Non-spouse
inherited IRA rollover/transfer? Options" (the TOPIC of this thread).
Nothing either one of us has said has added insight to Rich's original
question about inherited IRAs. I would be happy to discuss it openly
so that others may also be exposed to our varying point of view, but
start a new thread (or "topic", if you will).

"kastnna" <kastnna[at]auburnalum.org> wrote in message
news:1184854400.953936.204560[at]i38g2000prf.googlegroups.com...

- quote -


Almost everyone would agree that government regulation of some things is
absolutely necessary, while people of varying political views disagree about
what things and how much. It seems to me that more government regulation of
the securities industry would be highly desirable, including the manner in
which financial products are promoted and sold to the public.



Of course, the rising popularity of the internet and the increasing access
to information it makes possible goes a long way toward exposing and
preventing abuses. Scams and frauds that have been rampant in the past will
eventually become more widely recognized.



Such issues are highly relevant to financial planning. To regard them as
"off topic" just restricts what is considered to be "on topic" to views that
everybody agrees upon and which therefore are bland and have less practical
importance for newbies and people trying to learn more.

On Jul 17, 7:31 pm, "Don" <dwz...[at]telus.net> wrote:

- quote -

That is your political opinion and one I do not share, but that is
your right.

I an economist and a staunch libertarian. I'm laissez-faire and
minimal government to the bone. I happen to think that most industries
WOULD be better off if government agencies were not implemented to
regulate them. Free market theory suggests that inferior competitors
will either a)be driven out of business, b)rapidly grow to compete by
improving their product, or c)not go out of business, but rather
supply a lessor product for a lower price that some people would be
willing to buy (IOW, fill a currently lacking market niche).
Government agencies also slow free market response time with red tape,
and costs a fortune to maintain (our fortune).

All that aside, your logic confuses me. You called the NASD corrput
and fraternal in your original post, but now say that government
regulation is necessary. The NASD is overseen by the SEC! Furthermore,
their authority is completely dependent on their reputation of
fairness and justice. They were given that authority BY THE GOVERNMENT
and its agencies (the SEC) and they can be dethroned if the gov't
finds them not serving their purpose. If government agencies are the
answer, and the NASD is corrupt, then why in the SECs infinite wisdom
do they not fix this SRO that they themselves empower?

I can see no logic in your claim that we need government regulation,
but then once the government empowers and oversees an organization to
do just that, you call that body corrupt. What makes a government
agency superior to a government appointed agency that is continually
monitored? The government already gave the NASD their "seal of
approval" and the NASD isn't going to endanger that by becoming
overtly corrupt.

**This has gone entirely off-topic and I apologize to the group and
the mods. I will limit any further responses to email only.

kastnna

"kastnna" <kastnna[at]auburnalum.org> wrote in message
news:1184646544.540265.225870[at]k79g2000hse.googlegroups.com...

- quote -

Try to imagine what the stock market would be like today if the Securities
and Exchange Commission had not come into existence in 1933 and everything
had been left to "self-regulation" by the industry. Or consider what would
happen if regulation of foods and drugs were left entirely to the companies
who produce and sell them. Elimination of abuses in all kinds of business
depends on governmental regulation with legal standards and penalties.
Representatives of various industries always will say: "My business is
special and all of us are very ethical and we are capable of regulating
ourselves," but that idealistic picture rarely translates into practice.

On Jul 16, 11:24 am, "Don" <dwz...[at]telus.net> wrote:
- quote -

Its true that criminal actions (like fraud) can and will be tried in a
court of law. Other serious allegations, like the current Richard
Scrushy indictments, also end in civil litigation but also have
origins in criminal activity. Rarely, if ever, do any complaints that
are not also accompanied by criminal conduct make it out of
arbitration.

I was not aware that "It is well known that "self-regulating"
organizations tend to be lax in their regulation and protect their own
people". The implication is insulting, and I would love to see a
source cited. Its not in my nature to let generalities pass as "fact"
without validation, sorry.

Kastnna