401K's
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Just curious how everyone else handles a clients 401K. Say for example they have 200K liquid and 500K in their 401K. How do you personally handle this situation?
Couple of things:
1 - Is a non-hardship, inservice withdrawal available? If so, it often makes sense to self-manage it.
2 - If not available, I include it in any overall allocation plan trying to pick the best asset classes in the 401k, and building around it.
I want to be the ‘money guy’ for my clients and feel it’s important to take into account what will eventually be 60 - 80% of their financial assets at retiremet even if I can’t currently get paid on it.
[quote=bankrep1]Just curious how everyone else handles a clients 401K. Say for example they have 200K liquid and 500K in their 401K. How do you personally handle this situation?[/quote]
You raise $2,000,000 per month and you even have to ask this question? You are a liar and I eagerly await your silly explanation.
Ashland, Do you put 401(k) recommendations in writing?
Yes, I use Principia for most recommendations.
[quote=Bobby Hull]
[quote=bankrep1]Just curious how everyone else handles a clients 401K. Say for example they have 200K liquid and 500K in their 401K. How do you personally handle this situation?[/quote]
You raise $2,000,000 per month and you even have to ask this question? You are a liar and I eagerly await your silly explanation.
[/quote]Bobby I do and I know you’re jealous. I get frustrated when I have given out free advice and was wondering how others approach this subject. The specific event that led me to ask this question is I have a client who has about 200K with me, she retired and has a 500K 401K for which I have given her advice on for the last couple of years. I asked for the rollover and she is “debating”, had I not given her advice she wouldn’t of performed that well and would be handing me the rollover. Her thing is the 401K has done very well and there are no fees. . . Her other investments are in a wrap 1.25%
[quote=bankrep1] [quote=Bobby Hull]
[quote=bankrep1]Just curious how everyone else handles a clients 401K. Say for example they have 200K liquid and 500K in their 401K. How do you personally handle this situation?[/quote]
You raise $2,000,000 per month and you even have to ask this question? You are a liar and I eagerly await your silly explanation.
[/quote]
Bobby I do and I know you're jealous. I get frustrated when I have given out free advice and was wondering how others approach this subject. The specific event that led me to ask this question is I have a client who has about 200K with me, she retired and has a 500K 401K for which I have given her advice on for the last couple of years. I asked for the rollover and she is "debating", had I not given her advice she wouldn't of performed that well and would be handing me the rollover. Her thing is the 401K has done very well and there are no fees. . . Her other investments are in a wrap 1.25%[/quote]
Show her how to make a large portion of the 401k tax free. Right now the entire 401k balance is taxable. You have to provide a workable suggestion for her to access the funds largely tax free. In addition you must educate her of the benefits of doing this on HER schedule as opposed to waiting until 70 1/2 and letting the government tel her how to do it.
If she waits until 70 1/2 her RMD will force her to completely liquidate everything whether she wants to or not. As such, it is in her best interest to employ a strategy that will either:
1) Make 90% of her 401k completely tax free (immediately).
2) Make a large portion of her 401k tax free while employing a partial Roth conversion strategy that will grow back the entire principal amount tax free.
These methods are out there. You must simply educate yourself on how to construct these plans.
[quote=bankrep1] [quote=Bobby Hull]
[quote=bankrep1]Just curious how everyone else handles a clients 401K. Say for example they have 200K liquid and 500K in their 401K. How do you personally handle this situation?[/quote]
You raise $2,000,000 per month and you even have to ask this question? You are a liar and I eagerly await your silly explanation.
[/quote]
Bobby I do and I know you're jealous. I get frustrated when I have given out free advice and was wondering how others approach this subject. The specific event that led me to ask this question is I have a client who has about 200K with me, she retired and has a 500K 401K for which I have given her advice on for the last couple of years. I asked for the rollover and she is "debating", had I not given her advice she wouldn't of performed that well and would be handing me the rollover. Her thing is the 401K has done very well and there are no fees. . . Her other investments are in a wrap 1.25%[/quote]
Thanks for the silly, predictable explanation. Just what I predicted.
My question is how long can she keep the money in the 401K? Some firms allow you to stay there indefinitely, others have a drop dead time for the client to move the money. You might want to clarify that with her.
I asked for the rollover and she is “debating”, had I not given her advice she wouldn’t of performed that well and would be handing me the rollover. Her thing is the 401K has done very well and there are no fees. . . Her other investments are in a wrap 1.25%
How are you adding value? What is the fee for? What does it give her that she wouldn’t have otherwise? If it’s because your sub-advisor gets to pick the best mutual funds for the changing times it’s probably not enough. If it’s because you do retirement, income, and estate planning then you have the rollover.
I asked for the rollover and she is "debating", had I not given her advice she wouldn't of performed that well and would be handing me the rollover. Her thing is the 401K has done very well and there are no fees. . . Her other investments are in a wrap 1.25% "
Really??? That 401K company must be philanthropic at heart- to provide such a service for FREE !!!
[quote=Ashland] I asked for the rollover and she is “debating”, had I not given her advice she wouldn’t of performed that well and would be handing me the rollover. Her thing is the 401K has done very well and there are no fees. . . Her other investments are in a wrap 1.25%
How are you adding value? What is the fee for? What does it give her that she wouldn’t have otherwise? If it’s because your sub-advisor gets to pick the best mutual funds for the changing times it’s probably not enough. If it’s because you do retirement, income, and estate planning then you have the rollover.[/quote]
Ashland I do comprehensive planning. The thing is I think she expects me to continue to counsel her since I have her other money. She is not forced to leave the paln.
Blarm, my fees will cost more than the 401K’s management fees because there is simply more valued added from the planning side.
[quote=bankrep1] [quote=Bobby Hull]
[quote=bankrep1]Just curious how everyone else handles a clients 401K. Say for example they have 200K liquid and 500K in their 401K. How do you personally handle this situation?[/quote]
You raise $2,000,000 per month and you even have to ask this question? You are a liar and I eagerly await your silly explanation.
[/quote]
Bobby I do and I know you're jealous. I get frustrated when I have given out free advice and was wondering how others approach this subject. The specific event that led me to ask this question is I have a client who has about 200K with me, she retired and has a 500K 401K for which I have given her advice on for the last couple of years. I asked for the rollover and she is "debating", had I not given her advice she wouldn't of performed that well and would be handing me the rollover. Her thing is the 401K has done very well and there are no fees. . . Her other investments are in a wrap 1.25%[/quote]
WTF do you mean there are NO FEES in a 401k???
There are fees in EVERY investment. Typical 401k fees are about 2% per year.
Study this and learn something young padawan learner. And get a mentor who can help you learn how to attract more rollover assets.
[quote=bankrep1] [quote=Ashland] I asked for the rollover and she is "debating", had I not given her advice she wouldn't of performed that well and would be handing me the rollover. Her thing is the 401K has done very well and there are no fees. . . Her other investments are in a wrap 1.25%
How are you adding value? What is the fee for? What does it give her that she wouldn't have otherwise? If it's because your sub-advisor gets to pick the best mutual funds for the changing times it's probably not enough. If it's because you do retirement, income, and estate planning then you have the rollover.[/quote]
Ashland I do comprehensive planning. The thing is I think she expects me to continue to counsel her since I have her other money. She is not forced to leave the paln.
Blarm, my fees will cost more than the 401K's management fees because there is simply more valued added from the planning side.[/quote]
I don't see the value you add if you don't know that 401k plans charge fees.
Read The Wedge. Learn how to sell yourself.
[quote=skippy] [quote=bankrep1] [quote=Bobby Hull]
[quote=bankrep1]Just curious how everyone else handles a clients 401K. Say for example they have 200K liquid and 500K in their 401K. How do you personally handle this situation?[/quote]
You raise $2,000,000 per month and you even have to ask this question? You are a liar and I eagerly await your silly explanation.
[/quote] Bobby I do and I know you’re jealous. I get frustrated when I have given out free advice and was wondering how others approach this subject. The specific event that led me to ask this question is I have a client who has about 200K with me, she retired and has a 500K 401K for which I have given her advice on for the last couple of years. I asked for the rollover and she is “debating”, had I not given her advice she wouldn’t of performed that well and would be handing me the rollover. Her thing is the 401K has done very well and there are no fees. . . Her other investments are in a wrap 1.25%[/quote]
WTF do you mean there are NO FEES in a 401k???
There are fees in EVERY investment. Typical 401k fees are about 2% per year.
Study this and learn something young padawan learner. And get a mentor who can help you learn how to attract more rollover assets.
[/quote]I believe you are misguided by my post I understand Mutual fund expenses and the SAI. I refuse tocompete on what is has lowest cost, that is a loser’s battle.
Ashland, are you legally allowed to give recommendations on her 401(k)?
Am I legally prohibited to do so?
What value are you giving her?
Are you illegally giving her investment advice on her 401(k)?
My clients always move their 401(k) money to me. More to the point, it always gets done before we talk about specific investments or fees. How do I do this? I talk about all of the advantages of an IRA and a Roth IRA over a 401(k). If they understand this, you can get them to rollover the money to a money market account inside of the IRA with the promise to talk specific investments once the money is transferred. Can you put together a long list of reasons why she would be better off in an IRA/Roth IRA instead of a 401(k)?
Am I legally prohibited to do so?
I don't know your business setup, but the answer is probably "yes".