Our First snafu at Fido with Inherited IRA transfers

[CRLLS]

We have recently run into our first snafu with Fidelity. DW filed a request for moving an inherited IRA to Fido. The form filed with Fido said to move 100% in kind. The original account held elsewhere had 3 funds. Fidelity never asked us for the name of those funds. We assumed that they would take care of everything. Next, only 2 of the funds showed up at Fido. The Transfer Tracker at Fido showed the request was completed. We signed into her account at the other custodian to see that the one fund was still there. Discussion with our assigned Fido rep and she would look into it. A couple days later….crickets…..

Phone to customer service and the person we talked to asked for the name of the stranded fund. After talking to “The Back Room”, the problem was determined that the Fido person just never filled in the 3rd fund name in their transfer. Fido would reissue the request with the 3rd fund. Nothing to do on our part.

A few days later, we see that the request still shows up as complete (from the 1st 2 funds transferred) AND another request in process, presumably the 3rd fund. That request was awaiting DW to fill out the same form tracking number she filled out before. WTF? So another call to Fido customer service. After a long discussion and waiting for him to contact “the Back Office” again, he came back and said they would handle it. We asked when we would see some progress reflected in the Transfer Tracker. He said it won’t show up there. It will just show up in our account in the near future. It will all be handled manually in “The Back Room”.

Am I supposed to just trust them this time, after 2 false steps, and wait for things to show up in her account? Up until now Fido has been flawless. Dealing with DW’s inherited IRA transfers with this custodian and with another inherited IRA (some idiosyncrasies of its own at Fido) has me wondering…….

 

[ExFlyBoy5]

I had a lot of issues moving stuff over to FIDO. This was for an I-IRA, a traditional IRA and a taxable account. Almost all of them held only VTI or VTSAX but yet still had issues. A couple of phone calls got it settled, but it *was* a pain. Once it was fixed, all seems to be good to go...no issues since.

 

[Souschef]

I just moved all my stuff from Morgan Stanley to Fido. It went without a hitch. Then MS wanted to charge me $$ for moving, and Fido nixed it.
Then I found I had a dividend credited at MS after the transfer. One call to Fido fixed it with a transfer.

 

[CRLLS]

I will add that I have had many years with Fido and have never had any complaints. Transfers from pensions and 401K's have gone smoothly over the years.

DW's stress level is high trying to deal with this. Investments are new for her as I have handled most everything. She wants to do more so I let her. Then she is co-trustee and co-executor on her mother's estate with its own stress.

I have to say that my stress level is somewhat higher than usual trying to let her do her thing while I keep an eye over her shoulder.

This venting helps relieve my own stress somewhat. I know things with the Inherited IRAs and a few other inherited accounts will get fixed eventually. I will not let it go unfixed. I am retired and I have plenty of time to hound them.

 

[njhowie]

During an account transfer from another brokerage, similar happened (a CD didn't transfer over that should have) and my guy at Fidelity spoke with the Fidelity back office guys, they worked it out with the back office guys at the other brokerage, and it got resolved.

Try to be patient. If they said it would get done, it will.

 

[OldShooter]

During an account transfer from another brokerage, similar happened (a CD didn't transfer over that should have) and my guy at Fidelity spoke with the Fidelity back office guys, they worked it out with the back office guys at the other brokerage, and it got resolved.

Try to be patient. If they said it would get done, it will.

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.

 

[jazz4cash]

I would say yes, trust but verify. As I read it transferring in-kind there is no penalty caused by the delay.

I’ve done many many IRA xfers in and out of Fido and many glitches but only one time that Fido caused the issue. Most issues caused by a credit union.

 

[Luvtoride]

I know some here have negative feelings about Financial Advisors and the fees we pay them.
Our FA handles ALL of these transfers for us and if there are issues/sanfus between investment/ brokerage companies (and we’ve done several transfers from other brokerage firms) they handle everything!
I’m not retired yet so I would not have the time to “hound” FIDO as you will.

Keep at them and I’m sure it will get resolved.
Good luck.

 

[athena53]

We're in the process of having our late Dad's Fidelity assets transferred into our own Fidelity accounts, split evenly among 5 siblings. A few glitches so far: Transfer to inherited IRA was odd because they sold most of the 2 holdings in the account but transferred a few hundred $$ of each in kind. Good thing- I wanted to keep one of them (Cohen and Steers Realty Trust) and they're closed to new investors. Having $368 worth of it allowed me to buy back in again.

The transfer of the non-IRA assets will be slower but the ones I got so far were moved in kind into my CHECKING account? Huh? And yes, I had a regular after-tax account with Fidelity. I couldn't move the securities myself so I called. And waited and waited. The guy I finally got didn't have the proper credentials to do that so I got transferred. That guy did it in 2 minutes but I spent 40 minutes on the phone in total. In theory I have a "guy" handling my account- his picture pops up on my page after I log in- but he was "assisting other customers".

I bet if I called them and ASKED them to put shares of stock into my checking account they wouldn't let me do it.

 

[COcheesehead]

We’ve done a 401k rollover and also an inherited IRA into Fidelity without issue, but in both cases the transferred assets were in cash. I always thought that was the preferred method.

 

[Montecfo]

In the recent annual ranking of brokerages at Kiplinger, Fidelity finished dead last in customer service.

But they were nonetheless #1 overall. It seems odd to be that bad at customer service.

 

[Sunset]

In the recent annual ranking of brokerages at Kiplinger, Fidelity finished dead last in customer service.

But they were nonetheless #1 overall. It seems odd to be that bad at customer service.

Maybe they are so good, that customer service gets out of practice

 

[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.

 

[Montecfo]

Maybe they are so good, that customer service gets out of practice

Well my reaction was that a poor customer service mark lines up with people here talking about 30+ minute waits on hold. And my own experience to the same effect.

But you could be right.

 

[freedomatlast]

Took three months and a dozen phone calls to get my HSA successfully transferred to Fidelity last year. Should have been a relatively simple transaction. Another circus ensued when I tried to link my bank account to the HSA to transfer funds. Again, should have been a simple online transaction. Not impressed so far.

I was considering moving my 401K, which is still at X-MegaCorp, to Fidelity, but now not so much.

 

[athena53]

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.

It might be that the reason for the excellent overall rating is that things rarely do go wrong. I can do almost anything on-line and that part works very well. So do all the other automated things- my bill payments go out on time, my trades execute, etc. It's when they do something wrong that you end up waiting on Hold to Customer Service.

I should also mention that my brother, which was handling Dad's finances when Dad's mind began to fail, was FURIOUS when he presented all of the paperwork that Dad had carefully executed beforehand that would give my brother access to the account. They'd had it prepared by a lawyer in the state where Dad lived and Fidelity wouldn't accept it. They wanted Dad to execute a new one- except that Dad was losing his marbles. Catch-22. They ended up having to have docs at the care facility sign papers attesting to that, which was pretty traumatic for the family. We understood that Fidelity wants to make sure family members aren't taking over the finances without proper consent but in this case they were way too cautious and made it unnecessarily difficult.

 

[COcheesehead]

I’ve had the need to call Fido maybe 3-4 times total. I never had to wait. Maybe it has something to do with my level of account, but I also have used their email service request feature and that worked well too. If I don’t need an answer right away, I get a response within the day via email.
I have seen folks post about Fido problems on other forums, but they are usually posting about self inflicted wounds.

 

[CRLLS]

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.

Me either. Up until these transfers.

I’ve had the need to call Fido maybe 3-4 times total. I never had to wait. Maybe it has something to do with my level of account, but I also have used their email service request feature and that worked well too. If I don’t need an answer right away, I get a response within the day via email.
I have seen folks post about Fido problems on other forums, but they are usually posting about self inflicted wounds.

Me too. Never had to wait more than a couple of minutes. Except when they had to get some input from another dept. Then a few times they just took my number and said they would call back when they got thru. And they did call back.

 

[athena53]

Apologies in advance for length but I think this snafu by Fidelity is pretty significant.

Background: Dad died on October 19 of last year. He had a trust, a Roth and a rollover IRA at Fidelity. Everything got transferred to us (4 siblings and me) in Fidelity accounts in our names. The distribution from the Trust was on 12/8. Brother who wrote this and is handling the taxes is a retired tax partner from a large (but not Big 6) accounting firm.

I just hung up the phone with X at Fidelity. I have been going back and forth with him about the 1099 they sent out for Dad's account. It is clearly wrong and they won't fix it correctly. First, they sent a 1099 for his Living Trust that showed about $125,000 in gains from stock transactions during 2021. The gains were primarily from sales that took place in Dec, 2021, when the trust distributed assets to everyone. I contacted him and told him there were two significant errors. The first one was that all the stock that was in the trust was adjusted to fair market value on Oct 19 and the holding period restarted. The second issue is that on Oct 19 the trust became a real trust in the eyes of the IRS and any transaction after that date should be reported on a separate 1099 with the federal ID number of the trust that I obtained and provided to him.

He talked to his "team" and they came back and said they would re-issue the 1099 for the stepped up basis in the investments, but all the reporting for 2021 will be under dad's SS#. <snip> He told me last night in an email his "team" has still decided they will not report transactions after Oct 19 on a trust 1099, but will still report it under dad's SS#. He called me today after I sent off an email last night, again telling him they are wrong and asking to speak with the person on his "team" that has arrived at this conclusion. He told me there is no one who will talk to me, they will not support their position with any tax law or case law, and they will not change their reporting. When I asked him if he thought it was correct for me to report stock transactions that took place after my dad's passing on his tax return, he said he understood the issue, but they will not change their reporting.

I am stunned!! They know this is wrong and won't fix it. A company like that should be better. I'll figure out a way to fix it on dad's tax return, but I am extremely disappointed. I told X that I know my account is nothing to Fidelity, but that I will be closing it because I can't do business with a company that operates like theirs.

Wow. We're all grateful to have my brother "on call" for tax questions. Basically Error #1, which they WILL fix, would have incorrectly created giant taxable gains. Error #2 makes no sense. How can a transaction made after someone's death be taxed under their SS#?

I'm pretty tangled with Fidelity- checking account, Roth, rollover IRA, Revocable Trust, HSA and, most recently, opened 3 529s for my grandchildren, as well as a Fidelity Visa. The bulk is in the revocable trust, and the IRAs. I can move checking accounts- hey, I'm retired. Might go back to Schwab. Total Fidelity assets are in the low $900K range. As my brother said, not enough to hurt them but I'd let them know.

 

[aja8888]

athena53, that clearly sucks. I hope it gets straightened out.

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.

For some reason, these big outfits have trouble dealing with changing stuff after they send it out.

 

[MRG]

Wow!
I'm not sure Fidelity is even trying to help you make this right. I'd guess it's a data issue with this account and they CAN'T fix it because of missing data or other incompatibilities with their reporting.

I'm not sure where you can go other than the top, or lob legal grenades at them to try to get some support.

 

[nwsteve]

Wow!
I'm not sure Fidelity is even trying to help you make this right. I'd guess it's a data issue with this account and they CAN'T fix it because of missing data or other incompatibilities with their reporting.

I'm not sure where you can go other than the top, or lob legal grenades at them to try to get some support.

Don't one of the regulators have authority over the brokers? I don't the right one but it would be my choice for next steps..

 

[Another Reader]

Apologies in advance for length but I think this snafu by Fidelity is pretty significant.

Background: Dad died on October 19 of last year. He had a trust, a Roth and a rollover IRA at Fidelity. Everything got transferred to us (4 siblings and me) in Fidelity accounts in our names. The distribution from the Trust was on 12/8. Brother who wrote this and is handling the taxes is a retired tax partner from a large (but not Big 6) accounting firm.



Wow. We're all grateful to have my brother "on call" for tax questions. Basically Error #1, which they WILL fix, would have incorrectly created giant taxable gains. Error #2 makes no sense. How can a transaction made after someone's death be taxed under their SS#?

I'm pretty tangled with Fidelity- checking account, Roth, rollover IRA, Revocable Trust, HSA and, most recently, opened 3 529s for my grandchildren, as well as a Fidelity Visa. The bulk is in the revocable trust, and the IRAs. I can move checking accounts- hey, I'm retired. Might go back to Schwab. Total Fidelity assets are in the low $900K range. As my brother said, not enough to hurt them but I'd let them know.

I had to go to court with Fidelity over my father's IRA, which I inherited. Very long story of paperwork they lost and the back and forth, but my very experienced estate attorney took them to probate court. Fidelity wisely did not show up or oppose, and was ordered to conform to our version of the facts.

I left Fidelity at that point, but returned several years later after firing an advisor I thought would do a better job minding the store. He didn't and I discovered these custodians are all sloppy to some degree. Vanguard "lost" a rollover from a 457 plan for a couple of months, saying they had no record. Review the records carefully and don't toss anything.

 

[DenaliBandit]

Don't one of the regulators have authority over the brokers? I don't the right one but it would be my choice for next steps..

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.

 

[CRLLS]

This sounds terrible. So far, both Fidelity and Schwab are not correcting the 1099's when they know they are wrong. Who really can you trust to do things right? (pun not intended). Not just now but in the future. I would have thought that having a lawyer might help, but it appears that just their presence is not enough. One must actually get a court order. Sheesh!