Recharacterization Chaos?
Has anyone encountered any of these potential problems due to the historical selloff and huge Monday gain on the verge of the deadline:
1) IRA custodian indicating they will not be able to get to your recharacterization request by 10/15
2) Recharacterization was ordered, but you attempted to abort the request due to Monday’s 11% gains (far more for certain issues). Custodian indicated they cannot stop it now.
3) IRA custodian charges a fee for recharacterizations (do not be surprised if fees are implemented after the volume they will be handling this year).
4) Other problems?
Permalink Submitted by Jose Morales on Wed, 2008-10-15 18:03
All has been quiet on the recharacterization front here, but we only deal with FDIC insured products (CD’s and Savings accounts). I don’t know what those on the investment side are dealing with. They come to me with any IRA related questions as they have no one to give them even basic IRA guidance so I would imagine if they were experiencing a high volume I would know about it by now.
Permalink Submitted by W Dobroski on Sat, 2008-10-18 20:14
Alan, I can add only some partial experience that may however provide additional insight –
Schwab almost does it instantaneously over the phone. Other brokers (re: conversion, have not done a recharacterization with them) require their form to be filled out and faxed in; the effective date however (eg valuation) is when PROCESSED by their personnel, which can be a day or 2 later (vs using the date of completing paperwork to them). And that’s during normal dates vs deadline dates