I have 4 funds of roughly equal value there, Roth IRA, Class A.
Their $25 annual maintence fee will be automatically taken-out from one fund in December.
I don't normally care, but since one of those funds is off about 35% (QRAAX) over the past year I called to see if (1) I could mail in the fee or (2) make sure the fee was not taken from this sharply depressed holding.
The agent said "no" to the first request which strikes me as odd and perhaps in violation of SEC regs.
To the second part, their system is set up to take the fee out of the fund with the smallest balance - of course the shrunken commodities fund.
Um ... I expressed my irritation that this sounds backasswards. You ought to sell shares from the better performers not the most depressed holding. Also, when possible, such fees should come from an income fund as opposed to more volatile equities or commodities.
He's going to submitt a special request to have the fee taken from my emerging markets bond fund as I have requested. No guarantee. This also sounds odd. I'd think the right to designate sourcing for the fees should rest with fund holder not management.
Comments
The SEC deals with securities exchanges (transactions), not so much tax-ish issues like IRAs. Here's a Kitces blog about what the IRS lets you do about paying account fees. Nothing there suggests that paying IRA fees from outside must be an option. More generally, just silent on the matter.
https://www.kitces.com/blog/IRS-Re-Affirms-Paying-IRA-Wrap-Fees-With-Outside-Dollars/
Maybe if they tell you the date they take out the fee, you could do a one-day shift of money to the fund you want to be tapped. That fund will show up as the largest, they take their $25, and then you reallocate the money back to where you want it. A royal pain, but a possible way to beat their system.
The thought of shifting $$ around occurred to me too. But it's likely the minimum transfer allowed exceeds $25. Games could be played of course to hit the $25 mark, but their 30-day block on selling a fund you recently purchased would thwart that.
Interestingly, the Oppenheimer rep actually suggested I mail in a $25 IRA contribution to compensate. I replied that without any earned income, that would be an illegal contribution.
The article you linked is quite clear and helpful ... but I got lost trying to follow the give-and-take (Q&A) that follows.
Thanks
On the other hand, they may be taking the fees from QRAAX because it looks like that's where Oppenheimer investor cash goes to be incinerated.
http://www.morningstar.com/funds/XNAS/QRAAX/quote.html
@hank, get out the ketamine, put this dog to sleep, and tell Oppenheimer they can kiss your "commodities." Unless the fund is being managed by your nephew or granddaughter, and you are wanting to be supportive, I don't think you should let Oppenheimer jerk you around like this.
Regards,
Ted
What is the dollar cut-off point when one doesn't have to pay a fee to have an IRA account at the Oppie folks?
Fidelity used to have a $12 fee for IRA accts if the assets were less than....hmmmm; I think......well, I can't recall now.........but !
Catch
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@Catch - I haven't a clue to your question.
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@heezsafe - You're right. I'll call them up tomorrow and convey your sediment.. Meanwhile, I'm watching to see if this fund is capable of "breaking the buck" the way money funds sometimes do.