EDJ to independent - logistical question
For a client who has all of their EDJ IRA invested in one fund company, how can that be transfered to a fund held IRA without sales charges? The advice I am getting on how to do that doesn't make much sense, it seems like there should be an easy way to accomplish this. Many of these accounts shouldn't go into brokerage accounts, and I don't want to have the fees of transfering them into my brokerage account and then de-networking back to the fund company.
Can one of you former clones let me know how you did this?
Have the client write a letter to Edward Jones, saying that they want to have their IRA Mutual Fund de-networked and placed back at the Fund company either before you leave from Jones or before you transfer the account out to you if you have already left. The client might also state in their letter that the reason the don't want a brokerage account anymore is due to the lowered fees at the fund family and that they intend to hold only mutual funds in their IRA.
Later, place a broker dealer change to the fund family and ta dah! You are the broker and the client shouldn't incur any charges. If you haven't left yet you might not want to do a big bunch of these all at once. Jones, and any other B/D, will be able to get a clue where you are heading. This hassle is a major reason that Jones encourages all the new reps, who don't know any better, to put everything into a brokerage account. It isn't for the client's convenience, although it is nice to have a consolidated statement, it is to make it hard and expensive for the clients and you to leave. This is why you should never put accounts that have only mutual fund assets and especially IRAs with mutual funds only in a brokerage. Not to mention that the annual fee for an IRA in a brokerage account is much more than that at the fund family.
When you are independent you can get consolidated statements for your clients that will include some assets in a brokerage account, annuities, and mutual funds at several different fund families.
Thanks Babs. I just left, and am in the process of trying to move assets. I have a good relationship with the IR who took over the office, and for reasons I won't get into here I don't plan on taking the majority of the assets, so I think the new IR will remain cooperative.
Do they need to do an application for the fund company IRA? If so is that something I can help them fill out or will it need to be done by EDJ?
Does the letter need to be notarized or signature guaranteed in your recollection?
It has been a while since I did this.... so here is what I remember. I don't think the clients were charged to de-network the IRA accounts. I know there were no charges for non IRAs. If it was a good client I would absorb the cost of transferring from my commissions.
I had them fill out new paperwork for the IRA at the Mutual Fund choosing beneficiaries etc because that information is not available to the fund family only that they own the funds. You don't need a new application if the funds are not in a qualified account. EDJ accepted the letters without notarization or sig guarantee. You might ask the other IR since you seem to be on good footing with him. (Actually ask the BOA because the IR probably doesn't know anyway )
You probably want to contact the fund company and ask them how you are to submit the paperwork. It might be that the new IRA paperwork will have to be submitted by the Jones broker where the assets are held now. Good.....less work for you. Jones can't deny the clients the right to de-network mutual funds.
I just paid all the fees for the clients....$75 term fee like 12k I paid. Too much of a pain to do what you are doing in my view
I agree, and that is what I did for most of the clients who had charges incured when transfering. But that wasn't what he asked.
Obviously, the solution is don't use a brokerage account for mutual fund only IRAs in the first place.
EDJ4Now...I'd have your new firm sig-guarantee. Never know whether or not Jones could throw up road block on your travels to your newfound independent success.
My motto on transfers has always been, "He who holds all the gold makes all the rules" as we all know, Jones is ALL about rules, so I'd think of every possible angle and cut em off at the pass. Also, you should be able to help them fill out the Fund Co app ...just another form of TRUE A +++ service.
Good Luck..and remember to stop and eat every once in a while.
When you are indy, you can obtain sig guarantee as a BM. I got mine a month or two after I left Jones. Comes in handy.
I got the big green stamp also...$200/year and well worth it when you don't want to send a client to a competitor for a quick signature guarantee.
I don't think that Sales charges are going to be your concern, it is the closeout fee from Jones. Before I left I denetworked accounts through the ATNF system. That made those accounts quick transfers as all I had to do were BD changes. The problem was that Jones was so slow at transferring my accounts to St Louis that I had changed several accounts and Jones submitted their Block Transfer and all the Rev Sharing Firms changed from my new firm back to Jones. I had to refax all of my BD change forms. A small price to pay for freedom.