Generations of investment advisors have lived off of the “401(k) rollover” life event.
For corporate employees, retirement is inevitable. Along with it, the 401(k) rollover. Barring the sale of a home. The biggest piece of stock and bond investment money they would ever have to manage.
My generation of investment advisors waited for years and years. To build a strong enough relationship with an individual investor. To someday gain the 401(k) rollover assets to manage.
You don’t need to take the time to look up information on a 401(k) rollover. My last search of Google provided over 8,570,000 results.
401(k) rollover advice articles are ancient. Published by the investment advisors who stand to gain from the transfer of assets. Out of the company 401(k) retirement plan account. And in to an IRA rollover.
Well, today is your lucky day. Scrolling through the internet blogosphere. You have found the only investment advisor article that urges you to keep your old 401(k). Exactly where it is now.
The “grass is not always greener” on the other side of a 401(k) rollover for the individual investor. Only for the investment advisor.
If your current 401(k) sponsor is a large company. That company negotiated low costs with your company 401(k) provider. Also a large company (Fidelity, Schwab, Empower, etc.).
You now enjoy low 401(k) costs now. Annual fees and mutual fund expenses. Economies of scale not available in a rollover IRA account.
You may also enjoy the SDBA (self-directed brokerage account) option in your current 401(k). This is a brokerage account within your 401(k). With the ability to own any stock or ETF (exchanged traded fund) you can ever image.
When you transfer an existing 401(k) to an individual IRA. You will incur a list of retail-like fees. Like your bank. As opposed to lower institutional fees.
Your 401(k) provider will ask for your 401(k) rollover to their IRA. For their private wealth management division. This is a disguised opportunity for enhanced advisory fees. And compromises their ability to make objective recommendations.
Investment advisors misrepresent 401(k) participant best interest. To rollover a 401(k) to an IRA. Or to remain in their current employer-sponsored plan.
Any IRA rollover of an old 401(k) can face higher fees and conflicted investment advice. If you have access to the SDBA option in your old 401(k), there can be even less motivation to move to an IRA.
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Are you looking for a complete overhaul of your 401(k)? Need a second opinion from an independent, fiduciary investment advisor? Whatever your 401(k) needs are, I am here to help.
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