401k advisory fee paid from IRA?

Submitted by Steven Kaye on Thu, 2017-12-28 18:02

My financial advisor manages my IRA and company 401k plan. I have been paying the fees from my non-retirement accounts. In 2018 the investment fees will no longer be tax deductible.

I can have the advisor fees that are attributable to the IRA deducted from the IRA.
The advisor is not able to have fees paid from the 401k as they are not held in an account with his firm.

Question:
Can the fee I am being charged for the assets in the company 401k plan be paid from my IRA?

The advisor says no as he does not want to risk disqualifying my IRA plan and making it taxable.

If this can be done, it would be appreciated if you could specify where tax law says this is permissible.

Thank you.

Steve



Submitted by Alan - IRA critic on Fri, 2017-12-29 01:55

  • No. You cannot have fees for an account deducted from a different  type of account. If you had a Roth IRA as well, you could not have the Roth fees deducted from the TIRA account. Your advisor is correct. Further, if he billed the 401k plan the plan would not make the distribution to him.
  • Given the elimination of the misc deduction for IRA administrative fees, wrap fees, and investment advisory fees, there is a chance of further legislative action to simplify the options for both paying and bundling these fees. Right now the situation is overly complex and confusing.

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