Transferring IRA as Beneficiary While Avoiding Financial Adviser

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Wed Sep 13, 2017 7:36 pm

Hi all,

I've inherited three IRAs as a non-spousal beneficiary. Shortly after the decedent passed, his financial adviser called me to let me know.

I read up on this forum and decided to just let the financial adviser handle the transferring of the name while leaving the funds in the accounts they are currently in. My intention was to transfer them to Vanguard once they were named properly and all was settled.

However, the adviser sent me forms to sign, and the forms are Oppenheimer transfer request forms. These forms have left me confused to say the least. The adviser has pre-filled the forms to move the funds into different Oppenheimer funds. In the comments section, he has written that I feel these match up more with my investment desires than the previous funds-- I don't even know what the previous funds were except for one of the IRAs was a 3.5% annuity. I even told him over the phone that I wanted the funds left where they were.

On the IRA transfer sheets, there is a spot for "resigning trustee, custodian, or financial institution." On two of the three IRAs, Gleaner Life is listed. A third IRA lists AIG. The form then says to transfer to Oppenheimer and the financial adviser is listed as this guy's company. So, a few questions:

1) Where are the funds currently invested? Are the funds currently in Oppenheimer funds and how do I know this?

2) Can I go through the "resigning custodians" and fill out the transfer work myself since I am the beneficiary? According to the forms, I will get hit with a fair number of fees at Oppenheimer as expected, but the biggest problem is I take a 1% hit on the funds if I withdraw before two years. I do not want to leave these funds in Oppenheimer.

3) If I can't go through the custodians themselves, how do I handle this with the adviser? I know everyone says get the IRAs re-titled first, but should I just contact Vanguard and bring them into the situation?

Thank you for any help you can provide. I have a good sense of what I need to do and can handle the paperwork myself, I'm just not sure if I can do it without the financial adviser, which is my preference.

123
Posts: 2324
Joined: Fri Oct 12, 2012 3:55 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by 123 » Wed Sep 13, 2017 8:31 pm

1.) It sounds like there are two accounts with Gleaner LIfe and one account with AIG. I would suspect that these IRA accounts are annuities, likely variable.

2.) You can contact Gleaner Life and AIG directly. The more identifying info you have the easier it is for them to assist you. All the information needed may be on the transfer forms the adviser sent for your signatures. Give it a try.

Be mindful of tax issues when transferring accounts. You do not want the funds issued to you directly.

It may be a good idea to contact the person handling the estate of the deceased to see if there are additional accounts that will involve you.
The closest helping hand is at the end of your own arm.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Wed Sep 13, 2017 9:07 pm

Hey 123,

Thank you very much for your advice.

As far as I know, the financial adviser is handling the accounts of the deceased, he is the only one who contacted me, although I learned of the 3rd account from him ten days after the first two, not sure how all this stuff works. The financial adviser has been quick and very responsive, but he also included inaccurate information in his notes because, in my opinion, he sees me as mark and is trying to push me into Oppenheimer. Of course, if they are in annuities, I may not be able to leave them as is. But if I need to transfer them out, I'd rather just send them to Vanguard.

I'll try contacting the companies directly. The financial adviser has been all over me to send back the paperwork but as far as I can tell the only reason for expediency is because the paperwork includes forms for me to sign up for his services and Oppenheimer funds. That being said, as he is the only contact I have for this stuff, I don't want to burn the bridge.

Last question: As he is the broker for these accounts, does that give him any special relationship to them? Or perhaps I can call the companies themselves and tell them I am the beneficiary and I no longer work with this brokerage?

123
Posts: 2324
Joined: Fri Oct 12, 2012 3:55 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by 123 » Wed Sep 13, 2017 9:26 pm

I think you should have no difficulty dealing with the companies directly. He was an adviser to the purchaser of the (likely) annuities and not to you. He really isn't motivated to provide any service to you unless it's something that generates a fee/commission to him. While insurance companies often prefer you to go through an agent for new policies they will usually deal with you directly in claims/beneficiary situations. Life insurance agents often jump into the middle of things when someone passes away to make it "easier" on the bereaved but are more motivated by the chance to make a new fee/commission on a new product sale. The old financial adviser likely can't do anything without your signature so if he contacts you again you can always just say that you're thinking things over. Period.
The closest helping hand is at the end of your own arm.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Fri Sep 15, 2017 12:11 pm

Ugh.

So I just contacted the custodians of these accounts- found out I have another account (considerably smaller than the others) that the financial adviser did not tell me about.

These accounts are annuities that are part of an IRA, a 403(b), and a TSA- the customer service agent told me that I would be not able to title these as inherited IRAs because they are in state-specific tax-sheltered annuities for a state that I am not a resident of- and also because the custodian does not operate in my state. She told me I need to go through the financial adviser because he "might be able to do the transfer within other companies he works with."

I contacted Vanguard and they said they can only help me once the accounts are titled in my name. But according to the custodian, the accounts cannot be transferred in my name as an inherited IRA- I know they have the authority to not allow an Inherited IRA, so I think unfortunately I am stuck sticking with my financial adviser for the transfer of these accounts.

So, at this point, my question has changed: What can I do to minimize the fees I pay? I do not think I can get around his 1% fee- and frankly, he's actually earning this if through his relationships he can keep me in inherited IRAs with a company that could conceivably refuse this. But I do not want to pay Oppenheimer's outrageous fees. What specifically can I tell my financial adviser to do? Surely even if he will not work with Vanguard, etc., there are some places that I can put the funds with lower fees that I can later transfer to Vanguard?

Thanks for your help.

aristotelian
Posts: 2653
Joined: Wed Jan 11, 2017 8:05 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by aristotelian » Fri Sep 15, 2017 1:02 pm

I had this happen recently, with the additional wrinkle that the beneficiaries were my minor children. I did as you are thinking and had the FA handle re-titling the accounts. In fact, I don't think I was given any option--they had to be retitled before anything else could be done.

Within a few months, with the help of Bogleheads, I then transferred and combined the accounts into a single Inherited IRA at Vanguard myself.

The second part I did myself through Vanguard. Vanguard actually handled the transfer. I let the FA know what was happening as a courtesy but didn't actually need him for anything.

The FA graciously reimbursed us the pro-rated portion of his fees. You should definitely ask about that if it is not offered.

I did have to call a couple of the companies directly in order to liquidate some of the investments since Vanguard cannot be a custodian for other companies' proprietary investments. I would guess this will be the case for your annuities.

I would be careful about getting into anything new unless you are certain there are no load fees or fees to get out of the annuities.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Fri Sep 15, 2017 1:15 pm

Thank you for your help.

Unfortunately, for some of them, I am required to get out of the annuity, apparently. I don't think there will be a re-titling without transferring the money to a new account, which is why I'm trying to avoid Oppenheimer. One might wonder why I can transfer funds into Oppenheimer with the help of a financial adviser and why I can't just do this through Vanguard, but Vanguard will not help me until the name is changed and the name evidently will not be changed without the financial adviser's connections. To clarify, what I am saying is that they will not re-title the account if I contact them directly, but the financial adviser will be able to get the account re-titled in order to facilitate a transfer because he has a working relationship with the company.

I will ask specifically about load fees- I know they can be 5.75% at Oppenheimer but none are listed on the paperwork the CFA gave me.

It really sucks that I'm basically forced to use a guy who sees me as a mark and is treating me like a used car salesman.

I will reiterate to the CFA that I want to keep the accounts where they are now, but it is written on the forms and has been confirmed by my calls to one of the companies that this is not possible.

aristotelian
Posts: 2653
Joined: Wed Jan 11, 2017 8:05 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by aristotelian » Fri Sep 15, 2017 2:06 pm

Just saw your above post on fees. My attitude is, don't worry too much about it. At least the guy that my relative had charged quarterly, and as I said above, the fees were returned on a pro-rated basis when I left him. So, for example, if yours is charging 1% annually, he should only charge .25% up front for the first quarter, and you may get the majority back.

Certainly you want to make the most of the money you have inherited, but you can also look at it like the deceased made the choice to go with this person, and this is just the necessary cost of changing to your strategy.

I am not sure why he is pushing a new custodian. You should be able to do the first step just by re-titling the accounts at the current custodians. While he is working for you, he still has to do your bidding. If the funds are not actually in IRA's, I think the easiest thing to do would be to liquidate them to cash. You can then have him set you up in index funds, or do it yourself after you transfer the funds to the new custodian.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Fri Sep 15, 2017 2:19 pm

The reason they have to be moved is because they are held in a company that is local and will not let me own accounts with them. The current custodian has told me over the phone that I cannot re-title them, but that the financial adviser may have ways to make that happen. Essentially, they are forcing me to use him.

I've accepted that I have to bite the bullet and use him. The accounts have about 300k so 1% is a nice chunk for him for doing a bit of paperwork. Now my only concern is getting the money into a fund that doesn't gouge me as much as Oppenheimer. Can and will financial advisers put my money into target funds on Schwab or T. Rowe Price?

aristotelian
Posts: 2653
Joined: Wed Jan 11, 2017 8:05 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by aristotelian » Fri Sep 15, 2017 2:32 pm

egionesco wrote:
Fri Sep 15, 2017 2:19 pm
The reason they have to be moved is because they are held in a company that is local and will not let me own accounts with them. The current custodian has told me over the phone that I cannot re-title them, but that the financial adviser may have ways to make that happen. Essentially, they are forcing me to use him.

I've accepted that I have to bite the bullet and use him. The accounts have about 300k so 1% is a nice chunk for him for doing a bit of paperwork. Now my only concern is getting the money into a fund that doesn't gouge me as much as Oppenheimer. Can and will financial advisers put my money into target funds on Schwab or T. Rowe Price?
He works for you and has to do what you ask. You could tell him to put you in index funds. You could also tell him (or tell the current custodian) to simply cut you a check.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Fri Sep 15, 2017 2:37 pm

Ah, well, I definitely don't want a check because then I would have to pay the taxes. I want to keep them as inherited IRAs if possible.

aristotelian
Posts: 2653
Joined: Wed Jan 11, 2017 8:05 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by aristotelian » Fri Sep 15, 2017 2:50 pm

egionesco wrote:
Fri Sep 15, 2017 2:37 pm
Ah, well, I definitely don't want a check because then I would have to pay the taxes. I want to keep them as inherited IRAs if possible.
Sorry, I thought you had said that some or all of the accounts could not be transferred as IRA's. The ones that are not IRA's you should be able to liquidate to cash. You are right to keep the IRA's as IRA's. In any case, I think you need to get back on the phone to your FA.

You are definitely right to hold off on signing anything that you don't understand or have reservations about.

What you are hearing from the other custodian seems fishy to me. If you have a death certificate and you are the beneficiary, the accounts belong to you now, period, but if the FA was the one who set them up for the deceased he should be able to deal with the custodian to get them transferred.

Katietsu
Posts: 728
Joined: Sun Sep 22, 2013 1:48 am

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by Katietsu » Fri Sep 15, 2017 3:01 pm

How about having the current financial advisor move everything into a retitled IRA invested in a money market account of the financial advisor's choosing? I do not think it is worth it to reinvest with the funds available to this FA when you plan on immediately moving to Vanguard.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Sun Sep 24, 2017 10:37 am

So, here's an update:

I met with the financial advisor this morning (yes, Sunday- I'm in town for the memorial service). I told him under no circumstances did I want Oppenheimer funds.

He tried to push a series of progressively less bad funds. He told me I should do Fidelity Advisor funds and that I would get a 50 or 60% break on the load fee-he was pushing me into A funds because they are "cheaper." He told me that the new rules put in place by the Obama administration say that a one-time fee of 2.5% is the new standard for financial advisors (this cannot be true). I offered him $1500 to finish all the paperwork and get these things transferred into an account of my choosing and he turned it down, continuing to press for investing in other vehicles.

We went back-and-forth for an hour. I think it was intractable. Then he says to me, "You know, [the deceased] asked me who to make the beneficiary, you or his sister, and I asked, who do you have a better relationship with, he said you, so I told him to make it to you." This infuriated me- this guy was basically trying to take credit for making me the beneficiary.

At this point, I thanked him for his time and ended the meeting. He said to me, "You do not appreciate my time and you're a narcissist." He then climbed out from the back of his desk and got very close to me. He is quite an old man but he seriously was about to hit me. He was shaking and angry and told me I was a terrible person. I had some paperwork beneficiary forms that I had signed but not filled out entirely per his request-- there are no forms for his company, these are for the custodians of the accounts I inherited. He had sent these forms to me, and he insisted he have them back. I said, No, my signatures are on them, but he was really close to fighting so I gave them to him and said, please destroy them. He said he would.

So now, this guy has forms with my signature. I do not think it beyond him to file them, selecting lump sum payments, so that I get taxed. I am going to call both companies at 8 a.m. Monday morning when they open and attempt to remove his name from these accounts. I'm pretty worried that he will sabotage me on this.

This was a very uncomfortable experience. If I could do it over again I would have just taken the Oppenheimer funds for a year, it would have been less costly and in the end I think there's a chance I end up without inherited IRAs because of this.

User avatar
sometimesinvestor
Posts: 1153
Joined: Wed May 13, 2009 6:54 am

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by sometimesinvestor » Sun Sep 24, 2017 11:09 am

Forget Fidelity advisor but I think you should call Fidelity . THey may be willing to help when Vanguard didn't and they are much more likely to have a local office near where you live. Its only a phone call.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Sun Sep 24, 2017 11:19 am

Yes, I agree with this. Fidelity has an office 1000 feet from my house. I will see if they can help, thank you.

MN Finance
Posts: 1815
Joined: Sat Dec 22, 2012 10:46 am

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by MN Finance » Sun Sep 24, 2017 11:57 am

I didn't track everything in the post but you clearly have a problem. You need to send documented correspondence that you don't want anything executed until further notice.

He originally attempted to have you purchase new funds which is entirely inappropriate and unethical. He would receive a commission on the new funds. This is not standard practice at all. Standard practice is to just move the old funds into the benys names which is a non commsionable event.

I would consider threatening a complaint if you can verify this is indeed what is happening. Then find someone else to deal with (I'm an advisor, btw, so this is very obvious to me.)

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Sun Sep 24, 2017 6:37 pm

MN Finance wrote:
Sun Sep 24, 2017 11:57 am
I didn't track everything in the post but you clearly have a problem. You need to send documented correspondence that you don't want anything executed until further notice.

He originally attempted to have you purchase new funds which is entirely inappropriate and unethical. He would receive a commission on the new funds. This is not standard practice at all. Standard practice is to just move the old funds into the benys names which is a non commsionable event.

I would consider threatening a complaint if you can verify this is indeed what is happening. Then find someone else to deal with (I'm an advisor, btw, so this is very obvious to me.)
Thank you very much for your response. I am going to call both companies at 8 a.m. tomorrow, but that will not of course be documented. I can send them stuff by certified mail? I do really appreciate your help.

aristotelian
Posts: 2653
Joined: Wed Jan 11, 2017 8:05 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by aristotelian » Sun Sep 24, 2017 9:04 pm

What a nightmare. I have no doubt this gentleman thinks he is doing right by the deceased and knows better than you. However, it is your money now and you have every right to control it.

I am confused about what you gave him. If they are just beneficiary forms, that would be no big deal. If they are new account forms with lump sum selected, that is quite another story. Hopefully it doesn't come to that.

I would also call Gleaner Life and AIG as soon as they open tomorrow to tell them to remove the advisor from the account and if possible to ignore any forms they may receive from him.

Jack FFR1846
Posts: 5468
Joined: Tue Dec 31, 2013 7:05 am

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by Jack FFR1846 » Sun Sep 24, 2017 9:48 pm

I would call the police and file assault charges. You felt in danger of being hit. Then work with someone you want to handle this. It might be a lawyer who contacts the principal companies about what kind of person they have representing them but also preparing a suit for holding Your funds hostage.
Bogle: Smart Beta is stupid

User avatar
neurosphere
Posts: 2498
Joined: Sun Jan 17, 2010 1:55 pm
Location: NYC
Contact:

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by neurosphere » Sun Sep 24, 2017 9:49 pm

egionesco wrote:
Sun Sep 24, 2017 6:37 pm

Thank you very much for your response. I am going to call both companies at 8 a.m. tomorrow, but that will not of course be documented. I can send them stuff by certified mail? I do really appreciate your help.
Prior to the office opening and prior to the call, send both a fax and an email to the firm with the identical text listing your specific instructions and concerns. You can also send the same verbiage via certified mail. As I understand it, faxes and email would count as legal/discoverable documents. When you call, you can mention that you've sent a fax and email, and the purpose of the call is to confirm receipt of either of those and make sure they act on it sooner than later. Also mention a letter is also pending. Be direct and to the point in your text about what you want or don't want to happen. Explain in your email and fax, briefly, that you gave direct verbal instructions to the advisor which match the instructions in the email/fax and you expect those instructions to be carried out. This is not (yet) the time to accuse the advisor or being abusive or threatening. That can come later (if you wish).

The phone call would essentially be simply to follow-up. Only things in writing would be "proof" of your instructions. Depending on the laws in your state, you may choose to record your conversation on the phone (realizing that some states requires consent of the other party).

I'm not a lawyer, but I work part time as a financial advisor and have my own firm. And regulations require preservation of all fax and email communications with clients. But note that I don't take custody of funds, nor directly manages accounts of have any role in carrying out client instructions, so I have no special insights into the legal/regulatory details, and thus my advice to you is simply what I feel is "common sense" advice, which may or may not be the right thing to do.

NS

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Sun Sep 24, 2017 11:34 pm

Neurosphere,

Thank you so much for responding. I am in a faraway town for the memorial service, but I typed up the documents and have the faxes ready to go. One group has no fax number listed, I will call them as soon as they open and ask where I can send a fax. I did e-mail them through their own customer service system, that may be discoverable but I do not have a copy.

Thank you again for your help. I'm weirdly confident this will work out, much more so than earlier.

User avatar
celia
Posts: 6794
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by celia » Mon Sep 25, 2017 3:16 am

aristotelian wrote:
Fri Sep 15, 2017 2:06 pm
I am not sure why he is pushing a new custodian. You should be able to do the first step just by re-titling the accounts at the current custodians.
The threatening agent is pushing Oppenheimer to be the custodian so he can benefit from the commissions, fees, loads, account closing fees, and any other "fees", no matter what they are called.

Technically, you can't just re-title an account if you are a new account owner. If you change your name, you could change the name part of the account. But if you are a different person, you will need a new account since your SSN is different. OP will also need to get a different type of account. The annuities appear to currently be in a TIRA, 403b, and TSA (??) account while the OP will want everything moved to Inherited TIRA(s). Each account needs to have a separate account number. The custodians will report this to the IRS as the closing of 3 accounts and the amounts distributed along with the opening of one or more accounts with a rollover contribution coming from elsewhere. I suggest they all be rolled into one Inherited IRA, if possible, to avoid having multiple account closing fees, which could be up to $100 per account. The accounts will have to be reported to the IRS and appropriate year-end statements and tax forms need to be generated for the deceased and the OP. How can these be generated if you just "re-title" something? The history of these accounts needs to be maintained or it would look like the OP owned these accounts all along and never reported them.

If the deceased was over 70.5 and hadn't taken the RMD, that will have to be done before the accounts are closed. Either the deceased or the new owner can report the RMD on his/her taxes, so the OP needs to coordinate with the deceased's executor or trustee. The executor or trustee also needs to know the value of each account as of date of death, especially if the deceased will owe estate taxes.

OP, If you have time while still in town, you might want to talk to the branch manager about this agent. At least find out his/her contact information. Instead of being angry with Oppenheimer, you might want to explain to the branch manager what you are trying to do and see if she recommends a more streamlined, cost-free alternative. She might be willing to waive all fees as a way to apologize for the agent's behavior. Just ask, if she doesn't volunteer that info.


When calling the original custodians back, you might want to bring up these topics:
* Inform them that the account owner has died and the date of death. (This might prevent the Oppenheimer agent from doing anything unless he can produce a death certificate, which he is free to obtain but will take some time. This also holds for you. Even if you lived in that state, they won't follow your directions unless you send them a certified death certificate (and request it be sent back.)
* Did they receive your fax or email saying [name] represented [deceased] but doesn't represent you, the beneficiary?
* Is there a way to add an alert to the account also stating that and that you don't want any changes on the account until they hear from you? (They might not be able to do this since they don't yet know who you are.)
* Are you listed as the beneficiary? (The additional account that was found might be going to another beneficiary)
* What is the current account value? (They probably won't tell you since they don't yet know who you are, but you can ask.)
* If the account is an annuity, is there a surrender fee since the owner died?
* Was the RMD already taken for the year? (if the deceased was over 70.5)
(ask these for each account)

If you have any close relatives living in that state, could you ask them if you could used their address for a month or so? I suggest they put your mail in a manila envelope each week and send it to you. Don't just write "FORWARD TO <your current address> on the incoming mail as the Post Office will then likely send the old custodians a change of address notice. Then you should be able to close the original accounts and have the balances rolled over to a new Inherited TIRA at your "temp" address. Then Vanguard will be able to roll that into one of their TIRAs. Make it easy for your in-state relative and give them 5 to 10 manilla envelopes (the size that could contain 9X12 manilla envelopes) and twenty first class stamps. Have them put one stamp on the manilla envelope for each piece of incoming mail (of regular weight). (I have no idea if this will get you the correct postage without someone weighing each outgoing manilla envelope, but you get the idea.) Don't worry about the excess postage. But for about $10 to $15 you could get yourself a temp local address.

aristotelian
Posts: 2653
Joined: Wed Jan 11, 2017 8:05 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by aristotelian » Mon Sep 25, 2017 6:33 am

celia wrote:
Mon Sep 25, 2017 3:16 am

Technically, you can't just re-title an account if you are a new account owner. If you change your name, you could change the name part of the account. But if you are a different person, you will need a new account since your SSN is different. OP will also need to get a different type of account. The annuities appear to currently be in a TIRA, 403b, and TSA (??) account while the OP will want everything moved to Inherited TIRA(s). Each account needs to have a separate account number. The custodians will report this to the IRS as the closing of 3 accounts and the amounts distributed along with the opening of one or more accounts with a rollover contribution coming from elsewhere. I suggest they all be rolled into one Inherited IRA, if possible, to avoid having multiple account closing fees, which could be up to $100 per account. The accounts will have to be reported to the IRS and appropriate year-end statements and tax forms need to be generated for the deceased and the OP. How can these be generated if you just "re-title" something? The history of these accounts needs to be maintained or it would look like the OP owned these accounts all along and never reported them.
What I mean by "re-title" is that the accounts must first have the beneficiary's name on it before he can transact. So the first step (unless he goes with the lump sum) is for each account to become separate "Inherited IRA DBA Egionesco" or something to that effect, with the same investments at the original custodian. At that point he would be able to combine them, change the investments, or transfer to a new custodian, etc. They cannot be rolled into a single IRA and transferred to another custodian in one fell swoop. He cannot transact while they are still in the name of the deceased. At least, this is what I was told when I went through this process as beneficiary of three IRA's.

dbr
Posts: 22998
Joined: Sun Mar 04, 2007 9:50 am

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by dbr » Mon Sep 25, 2017 9:52 am

The problem, if I am reading this correctly, is that the OP is in the grasp of a predatory agent. The procedural requirements are clear enough but the problem is to get them executed without this agent taking advantage of the situation. It appears the primary mechanism for taking advantage is to reinvest the funds and collect a load as well as possible transaction and account fees as well as for the agent to build his book.

It would seem that one could go to the companies involved and end-run the agent somehow.

aristotelian
Posts: 2653
Joined: Wed Jan 11, 2017 8:05 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by aristotelian » Mon Sep 25, 2017 3:10 pm

dbr wrote:
Mon Sep 25, 2017 9:52 am
The problem, if I am reading this correctly, is that the OP is in the grasp of a predatory agent. The procedural requirements are clear enough but the problem is to get them executed without this agent taking advantage of the situation. It appears the primary mechanism for taking advantage is to reinvest the funds and collect a load as well as possible transaction and account fees as well as for the agent to build his book.

It would seem that one could go to the companies involved and end-run the agent somehow.
When I was in this situation, I felt it was worth it to bite the bullet and secure the cooperation of the FA until the assets were in my name. If it's not too late, OP could stipulate no load fees but otherwise cooperate enough to get the transfers done. The worst case scenario might be the quarterly portion of the FA's annual fee and one quarter's worth of the expense ratio of whatever fund he is recommending, perhaps a total of 0.5%. It doesn't seem right, but the deceased probably would have paid that much if he had stayed alive, and 99.5% of an inheritance isn't too bad.

Once the funds are in your name, then you can do whatever you want, without ever having to make contact with the FA ever again.

dbr
Posts: 22998
Joined: Sun Mar 04, 2007 9:50 am

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by dbr » Mon Sep 25, 2017 3:16 pm

aristotelian wrote:
Mon Sep 25, 2017 3:10 pm
dbr wrote:
Mon Sep 25, 2017 9:52 am
The problem, if I am reading this correctly, is that the OP is in the grasp of a predatory agent. The procedural requirements are clear enough but the problem is to get them executed without this agent taking advantage of the situation. It appears the primary mechanism for taking advantage is to reinvest the funds and collect a load as well as possible transaction and account fees as well as for the agent to build his book.

It would seem that one could go to the companies involved and end-run the agent somehow.
When I was in this situation, I felt it was worth it to bite the bullet and secure the cooperation of the FA until the assets were in my name. If it's not too late, OP could stipulate no load fees but otherwise cooperate enough to get the transfers done. The worst case scenario might be the quarterly portion of the FA's annual fee and one quarter's worth of the expense ratio of whatever fund he is recommending, perhaps a total of 0.5%. It doesn't seem right, but the deceased probably would have paid that much if he had stayed alive, and 99.5% of an inheritance isn't too bad.

Once the funds are in your name, then you can do whatever you want, without ever having to make contact with the FA ever again.
It occurred to me that what you suggest would be the most practical step as distasteful as it is. The real concern would be to prevent them taking out a load as that would be outright theft.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Mon Sep 25, 2017 6:03 pm


When I was in this situation, I felt it was worth it to bite the bullet and secure the cooperation of the FA until the assets were in my name. If it's not too late, OP could stipulate no load fees but otherwise cooperate enough to get the transfers done. The worst case scenario might be the quarterly portion of the FA's annual fee and one quarter's worth of the expense ratio of whatever fund he is recommending, perhaps a total of 0.5%. It doesn't seem right, but the deceased probably would have paid that much if he had stayed alive, and 99.5% of an inheritance isn't too bad.

Once the funds are in your name, then you can do whatever you want, without ever having to make contact with the FA ever again.


It occurred to me that what you suggest would be the most practical step as distasteful as it is. The real concern would be to prevent them taking out a load as that would be outright theft.
First, I want to thank all of you for your responses. You guys have given me great advice and have been very supportive.

I also thought this would be prudent. I don't want to go into excessive detail, but what this guy tried to do to me is really scummy and he is obviously trying to take advantage of someone who is new to money. Some of it is in my posts above, but essentially he sent me a bunch of pre-filled forms to transfer the accounts to Oppenheimer-- he is not an Oppenheimer agent-- and represented these forms as a requirement for taking control of the IRAs. He also filled out a form of my supposed investment desires and absolutely nothing matched what I told him- I specifically told him over the phone to please the money in the accounts they are in and just change my name. (This is not possible because some of them are annuities to specific to states I am not in- I'm sure the adviser could have worked this out because he used to work for the company where they are held, but now I am on my own and will likely need professional help to convince the company to do anything for me.)

I live across the country from adviser but was in his town for the memorial service. He agreed to meet me on Sunday. My intention at this meeting was to do essentially what was recommended but not to stomach the fees of the Oppenheimer funds which had 12b1 fees on top of the 1% adviser fee he was trying to charge me. He also, I believe, lied on the page listing the fees, but I am so stupid I did not make copies and I gave him every piece of paperwork he ever sent me back- and believe me, there is a reason he demanded those things back and was possibly willing to strike me for them, I am sure there was evidence of wrongdoing on them.

At the actual meeting, I was trying to come to a happy compromise. He even asked, "Do you want me to get paid," and I said, "Yes, I do, you have been helpful." What I wanted was a compromise. I told him Oppenheimer was not good, he offered me funds that were pretty much just as bad. I asked him about dropping his adviser fee since he was getting compensated by the fees inherent in the funds he was offering, he said he would if I went into a fidelity advisor fund with a load fee. Basically, I was citing the low fees of Vanguard/Fidelity index funds and saying, I want those low fees but I still will pay you out of my own pocket I would have been happy paying him up to $2k for the work he has done up to this point even though it is primarily motivated by getting my business. But I had a need to get those accounts in my name and was willing to pay for that.

He wouldn't give up offering me crap, saying he would find funds that better matched my profile. I sat patiently for an hour with him working on his iPad- he was locked out of his computer because he forgot his password, seriously. Nothing he offered was even close to acceptable. The only options he ever came up with were options with load fee or that had a one-year 1% transfer fee. I kept trying other angles, but it was impossible.

Finally, he is getting desperate, and he makes that suggestion that he is the one who made me the beneficiary. This is just outright offensive and I do not know how to continue a meeting with someone who lacks any sense of human decency. I gathered my papers and ended the meeting and you know the rest.

I think it is possible I will be able to work this out. And yes, I've obviously cost myself a lot of $$$ if these accounts end up being cashed out because of this. I'm just not sure it was possible to work with this person- I really did try, but my spidey sense was going off from the very first moment he contacted me.

In the end, Oppenheimer for a year may have been the right play. And I like the financial adviser may be too stubborn. But I still think there might be a way to handle this; if he can get them to do the transfers properly, surely another enthusiastic finance professional can as well. We'll see.

User avatar
celia
Posts: 6794
Joined: Sun Mar 09, 2008 6:32 am
Location: SoCal

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by celia » Mon Sep 25, 2017 7:25 pm

When I started my above post, I meant to say something I completely forgot about. It was about signing something you are uncomfortable with.
1. Never sign papers that haven't already been filled out completely. If some space or question is irrelevant to you, write "n/a" next to it.

2. If you have signed something that you no longer want to turn in, black out your signature or make a dark X across the paper. You can also tear up the pages but that does not seem as effective as someone can always tape them up.

When DH and his siblings inherited some IRAs, the agent only sent him the signature page with the spouse vs stretch option and a place to designate his beneficiary. I read the top where it said "I agree with this agreement ..." But it was page 7 of 8. I asked where the other pages were and told him not to sign until he obtained and read all of them (including the fees). His siblings are still oblivious to this day of what they signed because they "trust that their dad always made good decisions" with the help of this agent (a family friend who has been making lots of money off this family for very little work).

Meanwhile DH moved his accounts to Vanguard a week later and his accounts "couldn't be happier".

aristotelian
Posts: 2653
Joined: Wed Jan 11, 2017 8:05 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by aristotelian » Mon Sep 25, 2017 7:44 pm

Is this FA this top guy at the firm or does he have a boss that he answers to?

He sounds incompetent as well as slimy.

Unfortunately because of the state-specific firms he had the deceased in, it is not as simple as transferring the old accounts to your name. You have to come to some kind of agreement with him. I can see the predicament.

I would deal with him in writing from now on so that emotions don't get the better of either one of you and everything is documented. If he has someone over his head, copy that person. Begin by asking him to propose a portfolio of ETF's with no load fees. You can even suggest a simple portfolio of Vanguard Total Stock Market and Vanguard Total Bond Market. If he can't handle that he is truly incompetent and should be reported to FINRA.

sailaway
Posts: 27
Joined: Fri May 12, 2017 1:11 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by sailaway » Mon Sep 25, 2017 7:46 pm

Is he referring to the Obama era rules that Trump won't put into effect? If so, I would report him for fraud, as well as threatening behavior.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Tue Sep 26, 2017 5:02 am

aristotelian wrote:
Mon Sep 25, 2017 7:44 pm
Is this FA this top guy at the firm or does he have a boss that he answers to?

He sounds incompetent as well as slimy.

Unfortunately because of the state-specific firms he had the deceased in, it is not as simple as transferring the old accounts to your name. You have to come to some kind of agreement with him. I can see the predicament.

I would deal with him in writing from now on so that emotions don't get the better of either one of you and everything is documented. If he has someone over his head, copy that person. Begin by asking him to propose a portfolio of ETF's with no load fees. You can even suggest a simple portfolio of Vanguard Total Stock Market and Vanguard Total Bond Market. If he can't handle that he is truly incompetent and should be reported to FINRA.
I'm not sure I have to come to an agreement with him, but if so, I would say that's impossible.

I'm going to try and have another financial professional set up the same thing I saw him doing- basically doing a name change and a transfer simultaneously. We shall see if they are willing to do it. I think with some applied pressure I can do an end around here. I'm at least going to try, but I've resigned myself that I may have to take them as a lump sum and get taxed.

He's in charge of the firm, it's his name. I think he has a few underlings but it's primarily him. Almost all of his accounts are institutional funds for schools. He's 76 and has a spotless record according to FINRA. No yelp reviews at all. I think he's likely been sandblasting ignorant teachers for years. Every single of one my friend's accounts are in annuities, life insurance, or some reprehensible bond funds.
Last edited by egionesco on Tue Sep 26, 2017 5:10 am, edited 1 time in total.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Tue Sep 26, 2017 5:08 am

sailaway wrote:
Mon Sep 25, 2017 7:46 pm
Is he referring to the Obama era rules that Trump won't put into effect? If so, I would report him for fraud, as well as threatening behavior.
That is what he was implying. Believe me, there was not a single word of truth that came out of this guy's mouth. I went to his office to try and demonstrate that I wasn't a complete fool and with the hope that we could work something out. Maybe he's a true believer, I don't know. But he was absolutely gouging my buddy for decades.

aristotelian
Posts: 2653
Joined: Wed Jan 11, 2017 8:05 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by aristotelian » Tue Sep 26, 2017 6:12 am

OP, do not do the lump sum. If FA is not cooperative, next step would be to call insurance companies directly. Surely they have clients with out of state beneficiaries and can come up with something.

If FA is not cooperative, I would send him a certified letter firing him and freezing the accounts. The rest will work itself out, it may just take longer.

Have you had any contact with the individual companies? It is possible that the FA was not telling you the truth.

egionesco
Posts: 14
Joined: Wed Sep 13, 2017 7:21 pm

Re: Transferring IRA as Beneficiary While Avoiding Financial Adviser

Post by egionesco » Tue Sep 26, 2017 6:38 am

I don't have to fire him because I never hired him. I did send letters, one by fax and one by email, to the two companies involved letting them know that all communications go through me, that the FA is to have nothing to do with the accounts, and that any paperwork submitted by adviser or from an address within adviser's state should be considered fraudulent and invalid.

I have had previous contact with the company itself and they have confirmed what he said, but there was much confusion. It's a smaller company and it's likely I need to find the right person (possibly by accident) within the company. This is why I tried to meet the adviser again hoping to push it through without it being awful for me. Alternately, Or by engaging Fidelity or some other person who understands the process we can knock this out.

I won't be dealing with this again until Wednesday or Thursday but I'll update when I do. Thank you guys so much.

Post Reply