401(k) Rollovers
Good afternoon Terry, I am a CFP professional in the Plainfield, IL. area. I was recently contacted by an individual interested in rolling over her 401(k) because she listens to your radio segment and said this was your recommendation. As an independent advisor, I can offer this client a Vanguard managed portfolio for a total of 100 basis pts, which would be 50 bpts for me and 50 bpts for Vanguard. This is a new model offered through Voya and I'm pleased that I can offer a quality portfolio for 100 bpts along with annual meetings and other planning advice to help this client. I also believe that I can offer the client more advice related to tax, beneficiary, ltc, etc that a Vanguard or Fidelity advisor could or even would do. However under the DOL rule, I must be careful as to the reasons for transferring 401(k)s as I always have done before the new rule because I always put the client's needs before my own. As I look into things for her, please let me know the reasons that you advise people to rollover their 401(k)s so that I can share and discuss your philosophy with this client. Thank you.
Terry Says
Well, I'm not out there trying to get business for you -- OR for Vanguard or Fidelity. I just want to make sure that people are getting good, non-conflicted advice. I'm not aware of this program that Vanguard has created for Voya. I do know that they offer a similar program for FREE and the use of Vanguard funds, for people who contact them directly. However, I absolutely DO recognize the value of having a trusted advisor who can help with tax issues, plan investment and withdrawal strategies, and hold your hand in tough times! So I have no problem with a fee of 100 basis points, if it is not on top of the Vanguard fund fees for the underlying funds. Why roll over at retirement? Because you'll have a wider choice of investments -- and can choose investments designed for people in the distribution stage of live vs the funds in your 40l(k) which are designed primarily for long-term growth!
