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I have a 401k plan with AON , I would like to keep my account there and have an outside advisor manage it without moving it from the company , is this permissible ?

I have an advisor who says we would have to move the account to him for him to manage it . The advisor is affiliated with Ameriprise is this there policy for compliance reasons or is it AON's because they recommend another firm ?

May 23, 2013 by john from Orland Park, IL in  |  Flag
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John E. Benedict Level 13

The answer to your question is this is possible but not every type of advisor can do this. RIA's or Registered Investment Advisors are able to manage your 401k where it is. FINRA representatives such as an Ameriprise advisor might not be able to.

Comment   |  Flag   |  May 23, 2013 from Troy, MI

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John P. Duncan Level 18

Another consideration is does your 401k have brokeragelink access? If it does, you are able to open investment options of a full blown brokerage account. You and your advisor would be able to invest in a wide range of investments such as stocks, bonds, etf's. The Ameriprise rep is only held to suitabilty standard. The RIA model provides you with a fiduciary relationship which simply means that the advisor must always act in your best interest. Hope this helps. Good Luck!

Comment   |  Flag   |  May 23, 2013 from Mesa, AZ

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Some financial planners also work for an hourly fee basis. They will sit down with you from time to time to review your investment options within your 401k and help you decide what to do. You are responsible for ultimately implementing the advice on your own. This can be a very low cost advice solution, although its not for everyone. I also wonder why you would not want to rollover to your own IRA, for control purposes, and to have greater investment options.

Comment   |  Flag   |  Jun 24, 2013 from Bridgewater, NJ

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Hi John! Here is my question for your advisor: how do you get paid? If he is paid based on the dollar amount of assets he manages, then, yes, you will need to transfer the account in order for him to manage your 401(k) funds. Otherwise, he is not getting paid for the education, advice, and money management he is supplying. Contrary to popular belief, financial advisors don't work for free.

Here is my question for you: what is your reasoning for leaving your 401(k) at AON? If you still work there, that makes sense. If you have left the company, you may want to consider taking the funds with you - kind of a control issue. Also, if you are questioning your advisor's advice, get a second opinion. You want someone you can trust to help manage your retirement funds. Good luck!

Comment   |  Flag   |  May 23, 2013 from River Hills, SC

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John,

I am not familiar with Ameriprise's compliance rules, but this could be their policy. They may not allow their advisers to manage anything for clients without it being in an Ameriprise account or in a product that they sell to clients.

If you are still employed and you want to leave the funds in the existing 401(k), you should seek out a Fee Only Independent Registered Investment Adviser. They should be able to help you manage the 401(k). There are typically two ways that my firm will mange someone's 401(k) and I would assume other advisers could do this for you too. One way is by managing it on a non discretionary basis. By doing this the adviser would give you recommendations of which fund options to use and how to allocate the funds. It would be your responsibility to actually make the recommended changes. The second approach is for the adviser to have discretionary control. With this approach the adviser accepts the responsibility to not only make the recommendations, but also to make sure the changes are done for you. Either way works. It just depends how much control you want to maintain. Also, if you choose this way don't be surprised if the fees charged by the adviser are a little higher for the discretionary management versus non discretionary. This is due to the fact that taking discretionary control the adviser is responsible for the implementation and not only providing you the recommendations.

If you no longer are working for th ecopany another option is to roll the funds to your own IRA and have and adviser manage the funds for you. By doing this the investment options will be greater since you won't have to rely only on a relatively small selection of option inside your 401(k). The investment cost of the investment options could also be lower depending on the type of options you would choose.

I hope this is helpful

Comment   |  Flag   |  May 23, 2013 from Uniontown, OH

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Rich Winer Level 20

John, If you are no longer working for the company that sponsors your AON 401K plan, there could be advantages to rolling over the assets to an IRA or alternative 401K plan that has more or better investments options. If you are still working for the plan sponsor, you might also check to see if they would allow you to hold your account at a brokerage firm such as TD Ameritrade or Charles Schwab, which could be beneficial. Whether you keep your 401K account where it is or roll it elsewhere, as John stated above, a firm like mine (as Registered Investment Advisor) can manage the investments in your plan and/or advise you in accordance with your goals and objectives. I manage the assets in a number of 401K plans for clients throughout the country, and just took on new one held at Schwab yesterday. Feel free to check out our website at www.winerwealth.com and contact me if you have questions or are interested in my assistance.

Comment   |  Flag   |  May 23, 2013 from Woodland Hills, CA

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There are two ways that this could be done, assuming as John Benedict says that the investment adviser is permitted by his or her own firm to do it. The first way is if the Aon Plan has a feature called a "brokerage window" that takes you to a brokerage account permitted by the Plan. You could select the brokerage window as your Plan investment and the investment adviser could then manage the assets in the brokerage account, without being limited to the investment funds offered by the Plan. The second way, if the Aon Plan does not have a brokerage window, is for the investment adviser to access your 401(k) account using one of the confidential data services that are available to advisers for this purpose. The adviser then could manage your 401(k) account for you but would be limited to the use of the investment funds offered by the Plan.

Comment   |  Flag   |  May 23, 2013 from Raleigh, NC

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Just to add a little more information... The plan may not allow an outside advisor to manage the account for you. This is called taking discretionary management authority and the plan sponsor accepts some liability by allowing that to happen. For this to have any value to you within the plan, there should be a brokerage window that would allow your outside advisor to have a broader selection of investments. There are a lot of "ifs" here so if I may offer a suggestion, ask your outside advisor to look at your in-plan investment choices and design a portfolio for you. Our company does that at no charge for clients. Best of Luck!

Comment   |  Flag   |  May 23, 2013 from Kingsport, TN

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John, advisors that can offer advice and charge a fee are called RIA's, so any RIA , or IAR can give advice for a small fee. The only reason your current broker cannot advise you is because he can't charge a fee. And frankly, for compliance reasons, he should not be giving you free advice. In this highly regulated and litigious industry, if he gives you bad advice, both he and his firm could be liable.

If your 401(k) is with your current employer, it is not likely you can move it anyway. If you are no longer employed there, you should really probably transfer it to an IRA where you could have greater investment options at lower fees.

There are a number of firms that will charge $300-$500 and send you advisories by email as to how to allocate. It is usually up to you to act on the advisories, and so the advice is worthless if you do not stay on top of it. If your 401(k) provides a brokerage account, there are firms that will do that as well. Just google '401k advice for individuals' and you will find a variety of services. I think you would be better off to consider finding someone local that can meet all your needs. Seek referrals from trusted friends, neighbors, and associates.

An important question is how large is your account? If you have a $10,000 account, it really might not make sense to pay someone to manage it, unless you have a financial advisor that will accept it as part on your total financial management plan. If your account is relatively small and you really do not feel comfortable making investment choices and watching it, you may just want to select an asset allocation model that is offered to you by AON. For example, if you can tolerate 'moderate' risk, simply select the 'Moderate Asset Allocation Fund' It is typically a 'fund of funds' to meet your level of risk.

If you have a larger account and you feel you need help, I would consider finding a new advisor. I am not knocking your current advisor, he may be very good. but you should consider your needs.

Comment   |  Flag   |  May 23, 2013 from Delray Beach, FL

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Alex Bentley Level 18

Your typical advisor uses their own custodian and requires you to move your assets to their custodian. Some advisors will advise on assets not held at their custodian, but it is rare. I require all my customers to move their assets to my custodian. There are many reasons why, but compliance is certainly a big part of it.

Comment   |  Flag   |  Jun 15, 2013 from Pacific Palisades, CA

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