SumwunLost wrote:[snip]
His financial adviser sent him loads of paperwork and she says she needs a letter from me to say that I will be the 401(k) recordkeeper. Isn't that a service she should be providing? I daresay I could keep the books, in theory, but I cannot go buying and selling investments. Would anyone here take on the record-keeping? It seems to be very inefficient for me to do it.
[snip]
I would really suggest not taking on this responsibility, and here is why.
I have a client who started his 401(k) many years ago. During that time, he randomly kept or did not keep statements, and there are large gaps in his records regarding what amounts he contributed and when. He may be getting divorced, and knowing his contributions to the 401(k) is going to be very important when dividing up the large amount of money in the account. My QDRO expert has asked for every single 401(k) statement going back to the beginning, before the expert even starts calculating what each party would get. This is impossible. If someone had ever agreed to be the record keeper, my client or someone else could point the finger at them and say they should have kept all the statements for the entire period of time, and therefore they have to reconstruct what the statements would have shown, at no charge to the client. Without someone's agreement to serve as record keeper, it would be my client's responsibility to keep the statements, which is where that responsibility belongs anyway. I don't think anyone except a major corporation or the client should agree to be a 401(k) record keeper.
It also may affect professional liability coverage, because there are exclusions in many policies for contractual liabilities voluntarily assumed by the insured. It sounds like the financial advisor is looking to avoid responsibility and make you shoulder it without even getting paid for it. No thanks. If I were you, I would quote an exorbitant record storage fee because I suppose it could be worth it if the fee were high enough.