Anyone know anything about retirement accounts??

I have WHAT in my yard?

Songster
11 Years
Jun 24, 2008
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Eggberg, PA
Can a financial advisor consolidate or move accounts on you without your permission??

I not only thought this was wrong to do ethically, but illegal.

I was just contacted by a woman who says her financial advisor combined her three 403b accounts into an IRA without asking her.


Could he even do that?? Do you think he got her to sign something and she is just oblivious??
 

DuckLady

Administrator
BYC Staff
Premium Feather Member
14 Years
Jan 11, 2007
35,332
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I have WHAT in my yard? :

Bumping my own thread back up in the hopes that now that people are home from work some one might know???

It probably depends on what permissions she gave her financial advisor.

My grandmother let hers do whatever he thought was best, but I ok everything with my money.​
 

Cindiloohoo

Quiet as a Church Mouse
11 Years
Dec 19, 2009
7,471
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Southwest TN
Depends on the advisor. Some have things in the paperwork that you sign originally that leaves them open to advisors being open to do what they think is best in the current markets with your money. Mine never does anything without asking me. He KNOWS better
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booker81

Redneck Tech Girl
9 Years
Apr 18, 2010
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You can give permissions, but depending on where the transfers occurred, she should have had to sign paperwork for the rollover to occur. Generally 403b/TSA rollovers to IRAs only can happen with a triggering event (retirement, aged 59.5, or job termination) and the third party administrator has to approve the transfer, sometimes. Some places will do rollovers with only a phonecall.

She should take a look at her statements and contact whoever the holding company is (Prudential, Hartford, MetLife, etc), and call the service line. They should be able to advise her how the transfer was initated. If there was fraud involved, she can put a freeze on the accounts and start an investigation into the agent, if need be. To do that, she may need to write a letter to the Customer Relations group of the company.

If he rolled her accounts and she doesn't have a triggering event, it could be a taxable event that will be mighty painful to her bank account. She would want to contact the company to see if the transactions can be reversed, which would likely involving her sending a letter agreeing to hold them harmless, letter of instruction, etc.


(ETA: I work for one such company, and used to handle a LOT of rollover/transfer transaction requests. We would rarely see fraud, but it happened, enough that we have procedure for following the client's wishes of returning money in the event of an unwanted transfer.)
 
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I have WHAT in my yard?

Songster
11 Years
Jun 24, 2008
3,626
9
211
Eggberg, PA
Thanks Booker!

That is pretty much my understanding of how they worked. I rolled one over a few years back, the trigger being me no longer working for that company. And Dh just had to choose to move or not one of his for the same reason. There was tons of paperwork for both events, that is why it sounded fishy to me.

If he got her to sign off on that broad of a permission early on she needs to revisit this. As far as I know she does not fit any triggering events. Hardship issues maybe?? I don't know. Something about this just doesn't feel right and I know she does not fully understand her rights or what these vehicles are.





This is one of my major beefs with the whole do it yourself finances thing. It assumes a significant level of knowledge and awareness that the general public simply does not have. I am a pretty smart cookie and pay attention to these things but still needed to ask to be sure. I have a call in to my advisor to ask him as well. But, I knew there had to be a BYCer somewhere who knew this and would not have any agenda whatsoever!! Thank you!!
 

booker81

Redneck Tech Girl
9 Years
Apr 18, 2010
1,929
103
183
Mid-MI
Most companies require a signature of the client for transactions, and believe me, some of them are very, very strict.

Then there are some who just require a phone call. Those scare me. For those, I could potentially do the transfer myself, as I have all of the client's secure information on our form. Of course, doing so would be grounds for termination immediately, fraud reporting, screwing my background, yada, yada. Not something I'm at all interested in doing! However, unscrupulous people DO do it, and they DO mess up peoples lives.

I see alerts placed on agents for doing just that. He has all of her personal information. It takes just a phone call to the company from her to request a lock and passwork on the account so absolutely no one, including the agent, can perform transactions. I see this often too. If it's a highly rated company (like where I work
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), we pride on CUSTOMER service, and are willing to really help the client if they feel they've been screwed over by their agent.

She needs to just call ASAP.

Hardship isn't a reason to roll a 403b, it's a reason to pull IRA funds also. She can potentially be hit with a penalty from the IRS (10%), surrender charges depending on her vested amount, and the entire amount may be taxed (up to 30%).
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