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401k Rollover Boom Enriches Brokers at Retirees’ Expense

I have noticed too much of the poor advice that they are talking about in this article.  If you are retiring or are retired and have a 401k that you want to roll over – beware.  Make sure that you get good, unbiased advice – from a NAPFA-Member Fee Only Financial Planner.  Rolling your 401k to an IRA is generally a very good idea – but you need to make sure that you are not being mis-led with bad advice.



Former employees at major companies have complained that sales representatives lured them into rolling over their 401k nest eggs into unsuitable IRA investments.

By John Hechinger

Bloomberg News

Kathleen Tarr says AT&T employees looked to her as “their de facto 401k expert.” Visiting their homes and offices, she advised them on their retirement plans as they called up balances on computer screens.

Actually, Tarr worked for Royal Alliance Associates, a brokerage firm owned by insurer American International Group AIG. She encouraged hundreds of departing AT&T employees to roll over their retirement money into the kind of risky high-commission investments that Wall Street’s self-regulatory agency warns against on its website.

Tarr and her business partner reaped hundreds of thousands of dollars a year in commissions and trips to resorts in the Bahamas and Florida. Not all her clients fared as well, and 37 have filed complaints against her, according to Financial Industry Regulatory Authority FINRA records reviewed by Bloomberg News.Tarr and Royal Alliance say the investment choices were appropriate.

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