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Can an RIA open a direct sold 529 plan for me with my permission?

My IRA is looking to open a direct sold 529 plan for me but if he mails in the form he would need my signature as well as my e signature online, I am currently not able to meet face to face with him. Is there anyway I could give him permission to sign for me?

Mar 26, 2014 by Joseph from Miami, FL in  |  Flag
4 Answers  |  7 Followers
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3 votes

Hi Joseph! I'm not a lawyer, and this dips into the legal field, but as an advisor, I would not sign any investment application for a client. It is important for clients to complete applications accurately and to read the disclosure materials that accompany many investments. Also, you want the 529 plan to have your actual signature on file to prevent fraud on your account.

If your advisor says this practice is OK, I would seriously question the motives behind this transaction, particularly since you can directly purchase many 529 plans, minimizing fees.

Comment   |  Flag   |  Mar 26, 2014 from River Hills, SC

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3 votes

Hello Joseph,

Having your adviser sign for you is not a good way to handle this.

Context: Unless your adviser has been authorized by you under a Power of Attorney document, s/he cannot sign for you. And if you did appoint your adviser to act on your behalf under a Power of Attorney arrangement, then s/he would likely run into regulatory issues related to having "custody" of those assets.

Why not just have your adviser fill out the 529 forms and securely email them to you (or send by regular mail) for signature? You'd then sign and mail them on to the 529 plan provider. That's how I've helped an Oregon client get a direct 529 account set up.

Hope that helps. All the best!

Comment   |  Flag   |  Mar 26, 2014 from Clackamas, OR

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3 votes
Rich Winer Level 20

I agree with Pam and Larry. In today's electronic world, there should be a way for your advisor or any financial services firm to send you documents to sign by fax, email or direct download via the internet. You should be able to sign and return them by fax or email. Every financial services firm I deal with now accepts forms and applications electronically. As an advisor, I (like Pam) would never sign any form on behalf of a client. You, in turn, should be wary of any financial advisor who would feel comfortable signing anything on your behalf. Doing so is fraught with potential conflicts of interest and other problems. Read and sign any and all documents yourself.

1 Comment   |  Flag   |  Mar 26, 2014 from Woodland Hills, CA
James D. Kinney, CFP®

No kidding, it is 2014! I have clients currently living in Europe, Asia, and multiple states, and we get forms signed and transmitted all the time. Especially since it is rare for anyone to require original signatures anymore. Scan, fax - no reason anyone can't sign the docs on their own.

Flag |  Mar 26, 2014 near Bridgewater, NJ

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2 votes

Joseph, You would need have a special situation Power of Attorney given to your RIA to do this for you, which is more trouble than the 529 application. And I would not recommend doing it this way in any case. The process is so easy to do on-line with most direct sold 529 plans, you should look into just doing it yourself.

Comment   |  Flag   |  Mar 26, 2014 from Canton, GA

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