Our First snafu at Fido with Inherited IRA transfers

[DenaliBandit]

With the transfer $ will your household have enough total assets at Fido to get a permanent/no cost rep assigned? You can call the branch and ask for the manager. If yes, interview a few reps to find one you like. If no, then put the monkey on the branch manager's back.

We are at Schwab and I deal with their customer service from time to time, but anything special or anything like the train wreck you describe, I just call our guy Bill and he gets things fixed. Very good guy. I'm sure you would have a similar experience at Fido.

My wife and I have a Fido rep assigned. There are good ones and not so good ones. Our first Fido rep was a complete gift. He was on top of everything. He was completely responsive. If I sent him an email he would get back to me that same day. He made one mistake while he was our advisor but he promptly fixed it. He was subsequently promoted to a much better position. The 2 reps we have had since that time border on worthless. I fired the first of the 2 and I'm about ready to fire the one we have now. I did not know we could interview prospective advisors to find one we liked. I've had so many issues with Fidelity the past couple of years I'm considering transferring my account

 

[athena53]

Wow!
I'm not sure Fidelity is even trying to help you make this right. <snip>
I'm not sure where you can go other than the top, or lob legal grenades at them to try to get some support.

My brother says he has a way to handle it on the return. I trust him. He's dealt with problems like this before.

I do know all brokerages mess up. I have a very large account at UBS and the pdf statements of some structured notes correctly reflected the income. The download, which of course I used for TurboTax, created two 1099s, one for the total income on both notes and one for just one of the notes so that amount is double-counted. It also somehow coded this as "business income" making it subject to the SS self-employment tax. So, I deleted the downloaded ones and created a correct one but I know I'm gonna hear form the IRS if UBS doesn't fix this. I know I can convince the IRS with hard copies of the pdfs but would rather that UBS corrected their downloads. Haven't taken it up with them yet.

 

[cathy63]

My brother says he has a way to handle it on the return. I trust him. He's dealt with problems like this before.

Yes, you contact the IRS and get permission to file form 4852 with your return. Then you fill out the 1099-R section as the brokerage should have done and attach a statement explaining what you did. Since he has an email where Fidelity acknowledges they're doing it wrong, he should include that in the statement. It sounds pretty damning.

He might also want to double check whether "the holding period restarted" is accurate or not though. Usually inherited capital assets are all treated as long-term, no matter how long the heirs had them before selling. Maybe he meant something else by that phrase, or maybe there's something different about your Dad's trust that did cause a reset of the holding period.

I do know all brokerages mess up. I have a very large account at UBS and the pdf statements of some structured notes correctly reflected the income. The download, which of course I used for TurboTax, created two 1099s, one for the total income on both notes and one for just one of the notes so that amount is double-counted. It also somehow coded this as "business income" making it subject to the SS self-employment tax. So, I deleted the downloaded ones and created a correct one but I know I'm gonna hear form the IRS if UBS doesn't fix this. I know I can convince the IRS with hard copies of the pdfs but would rather that UBS corrected their downloads. Haven't taken it up with them yet.

This shouldn't be a problem unless UBS also coded the 1099-Rs they sent electronically to the IRS incorrectly. If what they sent to the IRS matches what's on your statements, there shouldn't be an issue. The IRS can't tell whether you downloaded the 1099s or typed them into your software manually.

 

[cathy63]

That would probably be FINRA (Financial Industry Regulatory Authority) but I caution you not to expect much help there, based on my experience. Financial services disputes are dealt with by arbitration rather than by allowing you to take the financial service company to court. I firmly believe the system is heavily biased in favor of the financial industry as opposed to going to court and having the case judged in a fair and equitable manner. I think getting an honest, unbiased arbitrator is a very long shot. Most of the financial firm's lawyers know the arbitrators so it's sort of a good ole boy's network, like having the proverbial fox watching the chicken coop. All my opinion.

In addition to FINRA, you can also complain to the SEC about brokers. https://www.sec.gov/oiea/Complaint.html They and FINRA both seem more focused on misbehavior related to a specific transaction or security rather than improper tax reporting though.

 

[youbet]

This sounds terrible. So far, both Fidelity and Schwab are not correcting the 1099's when they know they are wrong.

Schwab corrected my 1099-div. I'm looking at it right now clearly marked "corrected." The data downloaded into Turbo Tax matches the corrected 1099.

 

[youbet]

Last year, Schwab made an error on my DW's 1099 for her RMD distribution. I called and spoke with two reps at Schwab and they refused to send a corrected 1099 even though they agreed on the error. I just went ahead and filed with what I thought was right and included an explanation of Schwab's error and statement showing we were right. Still have not heard back from the IRS, but I believe we fixed the issue.

Which number exactly agreed with the calculated RMD your DW was required to take, yours or Schwab's? Did this involve a QCD reducing the RMD?

 

[swakyaby]

I also had problems with Fidelity when transferring my retirement account from my workplace self-directed plan held at T.Rowe Price to Fidelity as a rollover IRA. Despite carefully orchestrating the smooth transfer of my retirement funds between T.Rowe Price and Fidelity and providing the Fidelity senior account rep a copy of my T.Rowe Price account statement, Fidelity somehow managed to mess up the transfer. After a long delay with no transactions occurring, I began making phone calls to Fidelity, T.Rowe Price, and the retirement plan administrator at my workplace. I finally found that Fidelity simply sent a generic request to transfer my retirement account to them without specifying the exact account. So,T.Rowe Price simply sat on the request because it was nonspecific. I had to call Fidelity to resend the paperwork with the exact account information, since they failed to followup. It took 3 months to finally transfer the retirement account into a Fidelity rollover IRA.

At the beginning of the process 3 months earlier, the Fidelity rep acknowledged that a $2,500 bonus would be deposited into my account because the size of the transfer was at least $1M. But no transfer occurred. When I called a month later, the same Fidelity senior rep said that the transfer took more than 60 days, so the offer expired.

I pointed out that the delay was of Fidelity’s doing since they sent the incomplete request and didn’t followup. Eventually, they did provide the bonus, reluctantly.

 

[freedomatlast]

I was considering transferring my 401K to an IRA at Fidelity. But the information in this thread combined with my own negative experience with trying to transfer an HSA to them a couple of years ago, pretty much takes them out of consideration.

 

[Winemaker]

I've been with Fido for over 25 years, and family accounts as well. never as issue, or problem, ever. Will be moving DW's 403b shortly.

DM passed in late December 2021. As executor, I began in mid January to divest her tIRA, Roth, and her taxable account amongst my self and 3 siblings. It was completed by the first week of March, correctly. I have no financial rep at Fidelity. However, I was told back in January that a "transition team member" would call me to confirm the transfers, I have yet to hear from one, and don't need to hear from now.

DW's 403b transfer went well also, although Investco liquidated her holdings and sent cash, which has been a blessing the past few weeks, as I am nibbling back into the market.

 

[MRG]

My brother says he has a way to handle it on the return. I trust him. He's dealt with problems like this before.



I do know all brokerages mess up. I have a very large account at UBS and the pdf statements of some structured notes correctly reflected the income. The download, which of course I used for TurboTax, created two 1099s, one for the total income on both notes and one for just one of the notes so that amount is double-counted. It also somehow coded this as "business income" making it subject to the SS self-employment tax. So, I deleted the downloaded ones and created a correct one but I know I'm gonna hear form the IRS if UBS doesn't fix this. I know I can convince the IRS with hard copies of the pdfs but would rather that UBS corrected their downloads. Haven't taken it up with them yet.

Yes if DB knows what to do that's the best path..

I know tax reporting can be a real slog for the providers especially when there's major changes like the last couple years. It certainly gives a new light to XYZ doesn't answer their phones fast enough. Good luck.

 

[scrabbler1]

In 2012 and 2018, I helped my (snake-bit) friend transfer several accounts to Fido. In 2012, following a large inheritance, my friend wanted to transfer it from Morgan Stanley Smith Barney to Fido. He and I had the same Account Executive, and the AE showed us how to do it electronically. The brokerage and inherited IRA were not ready at MSSB at the same time (this was in late 2012, just after Hurricane Sandy slowed down operations at MSSB here in the NYC area), but they did get switched over. My friend got a small bonus for the transfer Fido was offering at the time, and it waived some feed.

In 2018, my friend wanted to transfer his remaining account (a Roth IRA and another small brokerage account) to Fido. Those also went fine. In both 2012 and 2018, we had checked with Fido beforehand that all the non-Fido mutual funds would transfer cleanly (in-kind). Furthermore, Fido automatically does a sweep with the old brokerage company to see if any dividends or other distributions get posted after the transfer date, so they could get transferred, too. Those both worked fine, too.

It sounds like a nightmare what the OP went through.

 

[athena53]

Yes, you contact the IRS and get permission to file form 4852 with your return. Then you fill out the 1099-R section as the brokerage should have done and attach a statement explaining what you did. Since he has an email where Fidelity acknowledges they're doing it wrong, he should include that in the statement. It sounds pretty damning.

I'll go with whatever my brother decides but that sounds like a good strategy and it's probably what he's planning to do.

This (UBS discrepancy) shouldn't be a problem unless UBS also coded the 1099-Rs they sent electronically to the IRS incorrectly. If what they sent to the IRS matches what's on your statements, there shouldn't be an issue. The IRS can't tell whether you downloaded the 1099s or typed them into your software manually.

That's my concern. You'd think the downloads to TurboTax and the data they send to the IRS would be from the same process- but I won't know unless I get a nastygram from the IRS. I've found in te past that they're open to concise, well-documented responses on questions.

And I can always call my brother.