Custodian policies on transferring assets

[MSN]

We seem to be running into more resistance from plan custodians as we're trying to assist our clients in transitioning from one platform to another. We're seeing refusals to issue checks to the successor custodian, outright refusal to wire funds to the successor custodian, required medallion guarantees, etc... It feels like simple trustee instruction isn't sufficiant anymore. Is anyone else seeing this? Maybe it's all just in my head...

[Lou S.]

It should all be in the current custodian's contract or account aplication what the rules are for transfering assets; they can vary a lot. In some cases it just feels like they are giving you the run around but it in today's litigious society it is hard to blame the institutions for getting proper documentation before they wire/send sometimes several million dollars to god knows where.

[ETA Consulting LLC]

^{This, unfortunately, happens too often. Sometimes, you have to remind them that someone who is duly authorized to issue the instruction (i.e. the Plan's trustee) has done so. Making a decision to 'not follow those instructions' could come have implications. I've seen this where TPAs who are on Revenue Sharing arrangements would not honor those requests for personal reasons. I've never tolerated the antics and would immeditately threaten legal action. Just send a letter (have the trustee sign) of a notice of intent to file suit for not transferring the funds. You do have to ensure the service agreements (and any other contracts) actually support your position. My experience has been that many time they are; and the TPA is merely trying to impede decisions that were already made; arguably unethical.}

^{So, without choosing sides, just treat it as a process.}

^{Good Luck!}