How can I maneuver these accounts?

Mona

Hopefully, I can explain the situation and my objective.

I have retirement accounts and non-retirement accounts at two institutions. I set this up because I did not want to have all at one institution plus I was able to purchase funds at one that I could not at the other. These dual objectives remain, but as I will explain, two funds are in focus. The below four accounts are all retirement accounts and being that I no longer have earned income, I can no longer contribute to a retirement plan.

Institution A

I am not certain where the names of these accounts came from.

I have a “Rollover Brokerage Account”. I have no problem selling any fund that is currently in this account - $460k current value.

I have a “Roth IRA Brokerage Account” (converted to a Roth many years ago). In this account, I own Artisan International Value (ARTKX) and T. Rowe Price Capital Appreciation (PRWCX) - $501k current value.


Institution B

I am not certain where the names of these accounts came from.

I have a “Rollover IRA Account”. I have no problem selling any fund that is currently in this account - $535k current value.

I have a “Roth Conversion Account” (converted to a Roth many years ago). In this account, I own Artisan International Value (ARTKX) - $176k current value.

As I recall, I have kept some of these fund separate (pure) mainly for asset protection (right or wrong). I believe that the “Rollover IRA Account” in Institution A came from an IRA. I believe the “Rollover Brokerage Account” in Institution B also came from an IRA. I now have an umbrella policy for which the coverage exceeds the value of all my retirement accounts.

My objective is to buy more ARTKX and PRWCX and I can't do this in my “Roth IRA Brokerage Account” at institution A or in my “Roth Conversion Account” in institution B. I could purchase all equity TCAF (which would be fine) without any maneuvering, but that does not address the problem with ARTKX. Either ARTKX or PRWCX can be purchased at A or B and a purchase fee is a non-factor.

I do not see an obvious solution. Combining both Roth accounts does not do anything for me other than allow me to allocate between ARTKX and PRWCX. Combining Traditional IRA's does not do anything for me because I do not own ARTKX or PRWCX in either. I have to check if either of the “Rollover” accounts in A and B are Roth accounts. If so, that would be an answer, but I doubt either are as they do not contain the word “Roth”. That seems to leave a Roth conversion in A or B, which I do not want as I am in a 24% marginal and 18% effective tax bracket, and to purchase a good amount of ARTKX or PRWCX, I would have to Roth an amount that would even put me in a higher tax bracket.

Am I boxed out of purchasing more ARTKX and PRWCX?

msf

From the Artisan statutory prospectus:

You may open a new account in a closed Fund only if that account meets the Fund’s other criteria (for example, minimum initial investment) and:
- you beneficially own shares of the closed Fund at the time of your application; or
- [various other exceptions]

A Fund may ask you to verify that you meet one of the guidelines above prior to permitting you to open a new account in a closed Fund. A Fund may permit you to open a new account if the Fund reasonably believes that you are eligible. A Fund also may decline to permit you to open a new account if the Fund believes that doing so would be in the best interests of the Fund and its shareholders, even if you would be eligible to open a new account under these guidelines.

The Funds’ ability to impose the guidelines above with respect to accounts held by financial intermediaries may vary depending on the systems capabilities of those intermediaries, applicable contractual and legal restrictions and cooperation of those intermediaries.

https://artisan.onlineprospectus.net/Artisan/s000006495/index.php?open=artisan!5fcombined!5fpro.pdf&scr=mob6JHBNJTYNO

That sounds like you ought to be able to open a new ARTKX account (in the trad IRAs), unless Artisan decides to be petulant. The last paragraph seems to suggest that at some institutions at least it should be possible to open the new account. That may take some three way communication among you, the institution, and Artisan, and a fair amount of arm twisting. If you can't open the account at Institution A or B, you might transfer some trad IRA dollars to an Artisan IRA, open the account there, and then at your convenience transfer the IRA back to wherever you want it.

With PRWCX, the situation is similar though slightly different. There is an institutional share class TRAIX that you might consider. TRAIX has a $500K min, but that is lowered to $50K if one invests directly at T. Rowe Price and has $500K in assets there. (That could even include cash that you were planning to invest in Cap Ap in a Trad IRA.) Even at the $250K mark, T. Rowe Price opens up its closed funds to investors. See Summit Program.
https://www.troweprice.com/personal-investing/about/client-benefits/index.html

Since these benefits (lower I class share min, access to closed funds) are a feature of T. Rowe Price's Summit Program, I would guess that they require you to actually have investments at T. Rowe Price. That doesn't mean you couldn't transfer them out once you opened the account (whether PRWCX or TRAIX); just that you'd have to move money into TRP to be able to start the process.

Mark

In your account description titles above do the terms 'rollover' and 'conversion' depict some special conditions pertaining to the accounts or are they just a reminder as to where or how the accounts were funded? I ask because way back in the early days of Roth account creation I converted a SEP-IRA to a Roth. My brokerage (Fidelity) makes no mention of how the Roth account was created/funded and for all intent and purpose it functions the same as my regular old brokerage account.

(Side note: see what happens when you get lawyers involved.)

yogibearbull

"Rollover" in a/c title is just for information. There are no differences in "Rollover IRA A/C" and "IRA A/C". Many people want to keep their Rollover $s separate, but even they can add nonrollover $s to the so-called "Rollover IRA A/C".

Typically, "IRA" is "Traditional IRA", "Roth IRA" is just that.

Never encountered the term "Conversion Roth IRA A/C".

Account protection is complex stuff. 401k/403b are better protected, but IRAs also have good protection if the various sources of money can be identified; the state protection limits vary for contributed $s. But to avoid these headaches, many just keep all Rollover $s separate.

msf

Federal protection for rollover IRAs (i.e. where the source of money is identified as an employer-sponsored plan) only applies in bankruptcy cases.

Outside of bankruptcy, traditional contributory IRAs and Roth IRAs and inherited IRAs, have protection only under state law. As such, the possibility of asset seizure by creditors depends on the application of individual state law.

https://rosenblattlawfirm.com/blog/creditor-protection-of-retirement-plan-assets/

hank

When I converted my employer 403-B with TRP after retiring in the late 90s they tagged it as a “rollover IRA”. Yet, when I moved that “rollover IRA” to other fund houses, they did not designate it as such - just as an “IRA”. So, ISTM that in my instance whether it was termed “rollover IRA” or simply “IRA” made no real difference. It did get confusing because sometimes the host fund house would require a check mark to indicate the money was coming from a “rollover” account. I did not check it, because the term was being applied differently and did not refer to the type of “rollover” TRP continued to carry on their books. Back than, anyway, TRP was a stickler for detail and always seemed to err on the side of caution on matters legal.

Tarwheel

Mona, I am somewhat confused by your description of the situation. However, I will offer an explanation of how I handled a situation that might be comparable. I have Rollover IRA and Roth IRA accounts with Fidelity. My Roth IRA was originally with TR Price until I transferred it to Fidelity a few years ago, but it still has a number of TRP funds. My TRP foreign fund had performed poorly and I wanted to replace it with a fund from a family with better options. I sold it and bought FIVFX with some of the proceeds.

I also owned ARTKX in my Rollover IRA, and its performance has been excellent. So I converted a portion of the ARTKX shares in my Rollover account to my ROTH account. Once the conversion was complete, I was able to buy more shares of ARTKX in my Roth IRA. So, I was able to upgrade my foreign holdings in my Roth IRA while also increasing my overall holdings in ARTKX.

I did a similar thing with the balanced fund (TRPBX) in my Roth IRA because its performance had been declining for a while. I converted a portion of the FBALX shares in my Rollover account to my Roth account. Then I sold all of the share's in TRPBX and bought more FBALX in my Roth. Since TRP would not let me buy PRWCX, I also bought shares in TCAF and PRCFX.

Long story short, I did a series of conversions from my Rollover IRA in order to add additional funds that I want in my Roth IRA.

Mona

Thank you all.

@Mark, Tuesday I will find out but I think that yogibearbull has it right.

@Tarwheel, specifically, what are you confused about with my description of the situation?

Later in the week when I have some time, I am going to try to work with msf's thoughts.

Mona

We are having a problem and would appreciate some thoughts on how best to try to resolve it.

My partner spoke directly with Artisan Partners and I qualify to open a new account and purchase Artisan International Value in my Traditional IRA, so long as my Roth IRA and Traditional IRA are in my name (which they are).

My Artisan funds are at Schwab. We also spoke with them and the Schwab rep called back this morning and said that they cleared the purchase of ARTKX. However, there was caveat, which is the minimum initial investment amount is $100,000. This is on Schwab's website.

https://www.schwab.wallst.com/Prospect/Research/mutualfunds/summary.asp?symbol=ARTKX

We know that Artisan International is a closed fund and thus it says "Available to Existing Shareholders". But, I now qualify to open the fund in another account. It also says that the initial minimum investment in an IRA account is $1,000, not $100,000. I understand from my partner that he showed this to the Schwab rep and he is going to take this link back to "his people".

On the related, we see that the initial minimum investment in an IRA account for APDKX (Adviser Class) is also $1,000, so we would want to open and purchase this share class in my Traditional IRA and save the 12 basis points on the expense ratio.

https://www.schwab.com/research/mutual-funds/quotes/summary/apdkx

The rep is off tomorrow and we expect to hear back from Schwab on Monday. If they now say $1,000 minimum, there is no problem. What are your suggestions if Schwab comes back and sticks with $100,000 initial minimum?

msf

However, there was caveat, which is the minimum initial investment amount is $100,000. This is on Schwab's website.

https://www.schwab.wallst.com/Prospect/Research/mutualfunds/summary.asp?symbol=ARTKX

Perhaps that page was just changed, but it now reads $1K min. Worth pointing this out to Schwab if they still balk at opening the account for less than $100K.

However, as you stated, APDKX is also available (albeit with a transaction fee), so I'd be inclined to go in that direction. You've already got Schwab agreeing that you can open a new account in Artisan International Value, so at this point it's just a quibble over the share class.

You might also look into converting the Roth shares to APDKX. A straight conversion might even help avoid the transaction fee. I haven't done this at Schwab, but I've tried conversions at Fidelity with mixed results:

- I had an unusual share class of one fund. When the "A" shares were given NTF status (load-waived, no fee), I asked to convert my shares to A shares to shave a few basis points off the ER. Fidelity was willing but said that the fund company had to allow it, and they wouldn't. (This was in a taxable account, so I wasn't going to sell at a gain to repurchase on my own.)

- I had retail shares of closed fund. The fund prospectus said that any owner of that fund could open another account in the same fund. So when I had enough to qualify for the institutional share class, I asked Fidelity to convert the shares. Here too, the fund company balked at the idea of opening a new account, regardless of what the prospectus said. The fund company finally agreed once it realized that I was just converting an existing account. But that shouldn't have mattered.

Lesson learned: one may be right about the rules, but one still needs to get the fund company to cooperate. If you can't do a straight conversion in the Roth, you could look at buying $1K of APDKX (to establish the Roth account), then selling all ARTKX shares and buying more APDKX shares. You'll get charged a transaction fee but you'll have cheaper shares for the long run.

Finally, if all else fails and Artisan won't let Schwab open APDKX accounts, you could try opening the accounts directly at Artisan and then transferring them in-kind to Schwab. However, at Artisan, APDKX has a $250K min (see prospectus), so you might have to do some maneuvering to temporarily boost your account (and then sell off some shares when the account is moved to Schwab).

Mona

Perhaps that page was just changed, but it now reads $1K min. Worth pointing this out to Schwab if they still balk at opening the account for less than $100K.

I did and will do so again, but this time in an email to the rep that I work with.

However, as you stated, APDKX is also available (albeit with a transaction fee), so I'd be inclined to go in that direction. You've already got Schwab agreeing that you can open a new account in Artisan International Value, so at this point it's just a quibble over the share class.

You might also look into converting the Roth shares to APDKX. A straight conversion might even help avoid the transaction fee. I haven't done this at Schwab, but I've tried conversions at Fidelity with mixed results:

Agree.

Lesson learned: one may be right about the rules, but one still needs to get the fund company to cooperate. If you can't do a straight conversion in the Roth, you could look at buying $1K of APDKX (to establish the Roth account), then selling all ARTKX shares and buying more APDKX shares. You'll get charged a transaction fee but you'll have cheaper shares for the long run.

Agree.

Finally, if all else fails and Artisan won't let Schwab open APDKX accounts, you could try opening the accounts directly at Artisan and then transferring them in-kind to Schwab. However, at Artisan, APDKX has a $250K min (see prospectus), so you might have to do some maneuvering to temporarily boost your account (and then sell off some shares when the account is moved to Schwab).

Artisan will allow Schwab to open ARTKX or APDKX. Artisan told me that the minimum initial purchase is up to Schwab. We are back to Schwab's website which says 1,000 minimum for either share class for an IRA. Schwab's website also says $2,500 initial minimum for a "Basic" account. I take this as meaning a regular non-retirement account. While I do believe that the minimum initial for ARTKX has always been $1,000, I always thought that $250,000 was the minimum initial for APDKX.

Let's assume for the moment that $250,000 is the minimum initial for APDKX and Schwab is recalcitrant regarding $100,000 as the minimum initial for ARTKX. As a last resort, I can purchase $100,000 of ARTKX and the next day sell as much as I want and pay the Short-Term Redemption Fee.