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My company started a Simple retirement plan and chose a local broker because of concerns about the liability of being seen as giving financial advice if we were to chose one ourselves. I am not happy with the returns of the chosen plan holder (American Funds) or the fact that I have to pay this guy 5% up front for doing nothing! What is involved in changing plans? I have an IRA with eTrade and would be happy to switch to them.
Hope someone has some knowledge about this or can direct me for some answers.
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Greetings, 1kraut, and welcome. You wrote:

<<My company started a Simple retirement plan and chose a local broker
because of concerns about the liability of being seen as giving
financial advice if we were to chose one ourselves. I am not happy with
the returns of the chosen plan holder (American Funds) or the fact that
I have to pay this guy 5% up front for doing nothing! What is involved
in changing plans? I have an IRA with eTrade and would be happy to
switch to them. >>


Your employer may indeed specify that the initial contributions be made in an account established with the local broker. However, you have the right to transfer that money to a SIMPLE-IRA (I assume you're talking about a SIMPLE-IRA and not a SIMPLE-401k) provider of your choice. You may not be charged a fee for such a transfer, but the initial deposit may still incur charges. If you wish to do so, then you must find a custodian who is willing to accept the transfer in a SIMPLE-IRA from the SIMPLE-IRA you have with the present provider. If you have a SIMPLE-401k, then you're stuck. You can't transfer that until you leave your job.

Regards..Pixy
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Pixy's response is, as usual, direct, cogent and useful--a winning combination. I add one minor point. In order to avoid the 5% commission to the broker, inquire about the availability of th American Funds money market fund. I believe they refer to it as a cash management account. Last I heard they were still offering that vehicle with no sales charge. If that is still the case, direct your SIMPLE deposits into that vehicle, and transfer them out from there.

Regards--dharmadollars
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