How to Change Who Manages a Roth IRA

When the manager of your Roth IRA isn’t working out the way you’d hoped, making a change can be a stressful, confusing time. Moving to a new manager shouldn’t be as much about running away as it is about finding solid, competent management for your retirement dollars. Good managers aren’t difficult to find if you know the questions to ask and have done some homework on what you really expect from your advisor and your Roth IRA performance.

Step 1

Write out your goals. The National Endowment for Financial Education recommends listing your goals in actionable terms with concrete deadlines. Although many people skip this step when investing, there are clear reasons for writing out your goals. Once you know what you want your Roth IRA to do for you, it’ll be easy to eliminate many potential managers who aren’t on the same page.

Step 2

Find a list of candidates to manage your Roth IRA. Ask friends for referrals to their money managers. Don’t just ask for a list of names. Ask what it is they like about their advisor. Ask about how often they talk and how fees are charged. Newsweek financial columnist Jane Bryant Quinn recommends sticking with fee-only advisors; her feeling is that advisors who collect commissions may have their best interest at heart instead of yours.

Step 3

Interview the prospective managers. Ask them a list of questions. One important question to ask is, “what is your training with Roth IRAs?” Some designations to look for are Certified Financial Planner, Chartered Financial Advisor or Certified Retirement Planning Specialist. Another good question is, “how are you licensed?” A key word in their answer should be “fudiciary.” If the advisor has fudiciary responsibility to you, that means they are required to make recommendations that are a best fit for you rather than sell a product that may or may not be appropriate.

Step 4

Review manager references and check for complaints and compliance violations. The Financial Industry Regulatory Authority maintains the BrokerCheck website, which lists a broker’s experience, licenses and any complaints. It also shows the outcome of the complaint; in some cases an advisor may have had a complaint filed against him but was found to have acted in the client’s best interest. This will all be detailed on the BrokerCheck site.

Step 5

Hire the Roth IRA manager and ask them how to fill out forms to transfer your Roth IRA. Inquire about fees to transfer the money from the old account to the new Roth IRA. Your new Roth manager should be able to have your Roth IRA to your new account in a couple of weeks. If not, call and ask what you can do to expedite the process.

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