Here are the facts. I am with a small/medium sized business that has their SIMPLE IRAs setup through the local Edward Jones office. (I believe, a Form 5305 DFI.) I went in to the office today to set up my account, as I just became eligible for the company match. My goal is to have the money deposited in the EJ account and then transfer it to a transfer SIMPLE IRA/frozen SIMPLE IRA with either Fidelity (if they offer this) or Vanguard.
During the meeting I was informed that I could NOT simply put the money into a money market account. (I would then want to transfer it to the frozen transfer only account.) When pressed on whether this was an IRS rule or an Edward Jones rule, I got an answer somewhere along the lines of 'fiduciary responsibility' but he skipped out of it so quickly I am almost positive it was just an 'internal policy'. When I mentioned index funds I got the usual 'American Funds beat the index 17 out of 18 times according to this out of scale chart that only covers a few years' pitch. The example that American Funds has prominently displayed on their site shows them losing against the index: https://www.americanfunds.com/individua ... sults.html
My Edward Jones SIMPLE IRA account is set up under their 'guided solutions' plan. This comes with an approx. 1.4% management fee plus the mutual fund expense ratios, plus the forty dollar yearly flat fee, putting the average hit at just over 2%. (I feel like you guys and gals know all of this already, but a lot of this is for my own mental clarity, so please bare with me.)
Since I am new to this plan, no money has been deposited and therefore no money has been invested. Funds are to be deposited at the end of each month. At this point, I have the following questions;
- Can they actually refuse to allow me to place my funds in a money market account for ease of transfer, or is this just a standard scare tactic?
- Would the request for transfer (which I know they have to honor in accordance with Form 5305) come direct from Fidelity or whatever company I end up opening a transfer SIMPLE with?
- Am I correct in assuming they have to allow at minimum one transfer per month?
- Are there any 'magic words' that I can use to cut through the sales lingo directly and just get this done?
- Is it worth the bother? Should I just relent and keep my account through Edward Jones with a focus on American Funds?
I apologize for the seemingly basic questions, but I am kind of at my wits end right now due to a lot of pressure at work and just in general. Lots of stuff happening and I need some of your expert/amateur advice. Thank you in advance!