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on the other hand I know I am crazy, so you have to be careful about any comments I make. ... the best bit of insanity -( or at least proof of it according to the rest of my coworkers) is a custom Relius report I wrote that includes a random message from a cow

Well, if you are completely convinced that the CPA is giving you accurate information, you could always adopt the policy of "Brave Sir Robin" - "When danger reared its ugly head, he bravely turned his tail and fled..." I'm just shocked that a CPA, (regardless of whether or not such disclosure violates any professional ethics) would actually tell this to anyone. Oh well, fortunately not my problem. Good luck with this client relationship.

Any time I get a question like this from a client, I immediately chuckle (loud enough they can hear me), say NONONO, then bluntly ask them if they think that passes the smell test. I mean come on, they knew the answer before they asked. Anything you give them in writing has an equal chance of being self-protection for you or ammunition for them, so stick to regs & published guidance if you give them anything at all...I wouldn't.

I would never suggest that - because I can't even imagine that a B/D would ever make such a representation.... If they did, I'd turn them in to the DOL/SEC/FINRA and Good Housekeeping to have their Seal of Approval revoked. I'm merely suggesting that instead of proving it can't be done, make them prove it can be (and clearly, at least in my mind,it is a PT). Unless it's Joe's Car Emporioum and Brokerage House, they wouldn't even think of allowing one of their brokers to do it.

Even if it is not a prohibited transaction, it would be a bad idea unless a good case can be made that the son is just about the best investment advisor around. The choice of an investment advisor is, without question, a fiduciary act! Are they still paying commissions to investment advisors for 401(k) plans? How is that defensible?

Eve- I had understood (maybe incorrectly) that these TAMRA contributions applied to 403(b) plans. The plan is question is a Money Purchase plan. Can you confirm that you believe this applies to Money Purchase plans as well? John - I don't think that applies here - even though it may be a pre-ERISA MP plan, the employee does NOT have any option to receive in cash, so it wouldn't be considered a CODA regardless, right? (Turns out to be moot - plan started in 1985, s post-ERISA anyway.) Cuse - so you have a non-governmental tax exempt MP plan that requires 5% mandatory employee contributions, and they are pre-tax. Are you using a pre-approved document? And does anyone have a citation as to the authority for such contributions being pre-tax? I'm not finding such a cite - looking for love in all the wrong places, I guess... Thanks to all for the responses. This one is a head-scratcher for me.

Are you suggesting that the responsible fiduciary should proceed to hire the son in the unlikely event his firm provides such a statement? I was being kind but this is classic 406(b)(1) self-dialing PT, so I wouldn't care what his firm says.

I don't have my research available anymore, but I had to go through this a number of years ago where the daughter was the FA. It clearly is a PT, and the easiest tack would be for you to suggest that the son's B/D or RIA to provide a written statement that it is NOT. That would be the best protection (and they aren't going to do it...).

Most likely the fiduciary with authority to hire a financial advisor for the plan would engage in a 406(b) prohibited transaction by hiring the wife's son. Don't get bogged down in issues of whether the son is a party in interest to the plan; that's not required to have a PT here.

Tom Poje answered the first question in this thread: Hope that helps!!