Financial regulator signals caution on IRA rollovers

Financial industry regulator Finra cautioned investors Thursday that they may face increased fees and expenses when they transfer retirement savings from a company plan to an individual retirement account.
In an investor alert, the Financial Industry Regulatory Authority Inc. debunked claims that IRA rollovers can be cost-free.
“Even if there are no costs associated with a rollover itself, there will almost certainly be costs related to account administration, investment management or both,” the alert states. “Don’t roll over your retirement funds solely based on the word ‘free.’”
Finra also pointed out that financial advisers can earn commissions and fees from rollover decisions, potentially diminishing the return that investors get from their retirement accounts.
“In contrast, leaving assets in your old employer’s plan or rolling the assets to a plan sponsored by your new employer likely results in little or no compensation for a financial professional,” the alert states. “In short, even if the recommendation is sound, any financial professional who recommends you move money from an employer-sponsored retirement plan into an IRA could benefit financially from that move.”
The alert marks the third time that the brokerage industry self-regulator has addressed rollovers in the past month. Finra issued a