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I know 4,000 people ask this a day - but please bear with me ... I'm not sure anyone has asked this in relation to John Hancock.

Years ago, I was set up with an IRA with Hancock. I didn't know anything at the time. In Dec. '98 - going on good advice, I converted it to a Roth. OK - now, it's 2 years later, and I'm a lot more well-versed on the market. I opened my own brokerage account with Datek, and I'm happy (relatively - the whole market is bad - but that's another story).

Now, because with Hancock you are limited to only their very weak, underperforming funds, I want to transfer and open an account with Datek. The only positive to Hancock is, I can contribute and I don't have to pay $9.99 per transaction. But, their funds are bad, so I think it's worth the difference.

Anyway, I know, I know - "Datek will have the forms I need" ... and that's fine. But has anyone dealt with Hancock? They have to be the dumbest people on creation, and I have called them numerous times.

The problem here is, Datek doesn't offer Hancock funds. So, in order to transfer, I'd have to liquidate my Hancock funds, and then transfer. This, despite assurances from Datek, makes me VERY paranoid that it would be considered a distribution. It's not Datek I'm worried about, it's Hancock.

So, I called Hancock, and told them what was going to happen - and they told me it's not possible. Hancock cannot just liquidate funds into cash - the money has to belong to a particular fund. There's no such thing as a "cash" portion of my IRA at Hancock. They basically told me I was stuck with them forever.

Not only that - but with Hancock, there is no one singular account number for my IRA. Each fund you have as part of the IRA, has its own account number. Which is a pain in the ass. So, after much discussion with Hancock, what it comes down to is, you actually have multiple Roth IRA accounts - one for each fund you have. It's insane. That part doesn't really matter to my question - but it's just another thing to add to my frustration.

Then, I got some woman at Hancock tell me that I wasn't allowed to make a contribution to a Conversion Roth IRA ... you see, I haven't made one since the conversion, and I want to now - even though I know I'm going to be transferring the account soon. After staring at the phone in disbelief for a while - I'm thinking, "that can't be right" -- so I called back again, and another guy told me some other story about how, yes, I could make a contribution - but I have to keep separate accounts for Converted Roth IRAs and regular Roth IRAs.

They are completely clueless. I know at one time it was worth keeping separate converted accounts from regular ones, but, from having read the Fool, I know that's no longer necessary.

Thus, you know why it scares me that anything I ask Datek to do, will come back to haunt me ...

So - I call Datek back. It's after hours, so no IRA people are on hand to help. I got the general desk. Still helpful. I explained to them how paranoid I was about doing this ... I said I was afraid that if I asked Datek to make a transfer, and then Hancock liquidates the funds but records it as a distribution, I'd be screwed.

The Datek person then said she "thinks" that, even if that were the case, I have 60 days to move that money to another qualified account without any tax repurcussions. That I could basically ask for a redemption on all my Hancock IRA funds, have them send me a check -- deposit the check -- then write a new check to Datek.

So ... sorry to be so damn long-winded, but, does anyone know if that's true? It would make life easier and make me less paranoid.

After all that verbiage ... I'd be happy with a one-word answer :-) - if that's all it takes.

Adam W.
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After all that verbiage ... I'd be happy with a one-word answer :-) - if that's all it takes.

More than one word, but it's worth it, because you have choices. If you have some time on your hands and like to cause trouble, start screaming at Hancock to do a direct transfer of all your funds, however they have them set up, to where you want them, and don't stop screaming until you find someone at Hancock who knows what (s)he's doing. Letters to newspapers and calls to CNBC badmouthing them, with copies to them, can be immensely helpful. So can standing in front of their office with a sandwich board, if that's practical. (I've had lots of fun making scenes in bank lobbies over the years. There's just nothing quite like a top-of-your-lungs "Why won't you give me my money? Have you lost it?" to perk things up in a bank. I digress.

The easy route, but far less emotionally satisfying, is to do a rollover on your own. Do whatever paperwork it takes to get a complete distribution without tax withholding from Hancock. Then, within 60 days, use the complete amount to fund your new account. You'll get a 1099-R from Hancock, which you report as zero taxable on your return with a notation of the rollover. See the instructions for line 15 of the 1040 and IRS Publication 590 for the details.

TMF ExRO
Phil Marti

Hot off the press! Check out The Motley Fool Investment Tax Guide 2001. It comes complete with a money-back guarantee. (Sorry, the steak knives are extra.)

http://www.foolmart.com/Shopping/Product_View.asp?PRODUCT_ID=MF030_02

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Thank you, thank you for the response ... Great stuff and I appreciate you being specific on the IRS stuff. Either option sounds good. I am getting an interesting image in thinking about the first idea though :-)

One other thing, though - I also remember that the Hancock people told me I could not touch a Conversion Roth for 5 years. I believe they meant I could not get a distribution from it, even if I wanted to (penalties included).

Are they right, and does that include the type of rollover you are talking about?

Thank you.

Adam W.
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One other thing, though - I also remember that the Hancock people told me I could not touch a Conversion Roth for 5 years. I believe they meant I could not get a distribution from it, even if I wanted to (penalties included).

Are they right, and does that include the type of rollover you are talking about?


As Mr. Clinton might say, it depends on what the meaning of "touch" is. Oops, I didn't really think about the double meaning of that one before I saw it in print. Oh, well.

Anyway, you can touch anything you like in any way you like any time you like. Contrary to what the people at Hancock may think, it remains your money even though you've entrusted them with it. If you take a distribution from your Roth IRA within 5 years of your first Roth contribution, it's not a qualified distribution, which means that all or part of it may be subject to tax or penalty. A rollover such as you contemplate is not a distribution. (For the sake of completeness, I'll mention that all qualified Roth distributions meet the 5-year rule, but not all distributions that meet the 5-year rule are qualified.)

TMF ExRO
Phil Marti

Hot off the press! Check out The Motley Fool Investment Tax Guide 2001. It comes complete with a money-back guarantee. (Sorry, the steak knives are extra.)

http://www.foolmart.com/Shopping/Product_View.asp?PRODUCT_ID=MF030_02
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Hello,
I was just reading your post and I don't see a reply to it, and I just wanted you to know that I'm doing a transfer of my Roth from American Funds to Vanguard and when I went to download the form(s) from Vanguard, I found that the file was a whole pamphlet that gives pretty clear information about transferring IRA's. I noticed that some of your questions were answered there, and it was in sort-of understandable English even. I hope this helps. It's a 57 page Acrobat Reader file though, kind of big. Good luck, those folks at Hancock sound like they're winging it.
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