Unsatisfied with Your Current Custodian? Roll Over Your IRA

You may want to roll over IRA funds to another custodian. Sometimes, your current custodian just does not meet your needs because an investor and a roll over is in order. Before you decide to roll over to another custodian, you need to make sure that you need to. Take a detailed look at your IRA and the custodian that is handling it. Here are the basics of when to roll over to another custodian and how to go about it. 

Why Roll Over

Look at the fees the custodian is charging. They may have a yearly fee just for being your custodian, while other companies do not. Look at the number of investments that you have available. Some custodians only allow you to invest in stocks, bonds, mutual funds, and CDs. If you want to invest in real estate or some other form of investment, you will have to switch your account over to another custodian. Look at the situation as a whole and then decide if you would be better off to go with another company. 

Roll Over Process

In order to roll your account over to another custodian, you need to understand the basic process. You can do it in one of two ways. You can have your current IRA custodian send you the money for your account. Then it is up to you to get the funds to your new custodian.

You can also arrange a "trustee-to-trustee" transaction. This means that the two custodians will actually transfer the funds directly from one to the other. You will never have to touch the money or worry about it. This is the easiest way to transfer the funds.

Opening an Account

The first thing that you need to do is open a new brokerage account with a different custodian. This is a very important part of the process. You need to do your homework and make sure that you are dealing with a good custodian. You need to choose a custodian that offers more than you currently have in your old custodian.

You will need to contact the new custodian and then take the necessary steps to open an IRA with them. You will need to notify them that you will be rolling over an IRA into this new account. You will also need to take into consideration any fees that will be associated with your new broker. Make sure that the fee structures are good, before you complete any paperwork.

Close Old Account

Contact your old custodian and notify them that you will be rolling your account into a new broker's hands. You will have to fill out the necessary paperwork. They will then provide you with the money or send it directly to your new broker depending on what you request. 


If you are handling the transfer personally, you need to make sure that you complete it within 60 days. If you do not, you will be subject to a 10% early distribution penalty. You will also have to pay income taxes on the money that you received so be careful to strictly adhere to the timeframes established by the IRS.

blog comments powered by Disqus