Disadvantages of rolling IRA account into solo 401K

[MPMD]

OP you are getting good advice on this thread and I hope you follow it. $900 for the work you described is highway robbery. Doing a backdoor Roth IRA on Fidelity will take less effort than it took your to write that post. I'm not trying to be snarky but it's really simple. There are so many guides on how to do this they are slowing down the internet.

The idea that there is some sort of urgent deadline for your Roth stuff is just a horseshit sales tactic. The mods can censor that bad language if they so chose. Holiday crunch time? Give me a break he has until spring to do this. He could spend a month skiing the Alps in January and not be in crunch time on this. Sorry this kind of thing kind of makes my blood boil. Heck I will personally volunteer to screen-share with you and walk you through the bdRIRA process on Fido. It is the most exciting 10 min of my life every January 2nd.

Solo 401k is a bit more complex but not much. Getting an EIN took me like 3 min on the IRS website and I think they sent it to me same day? You might not even need an EIN for what you're describing.

You sound like you don't want to be DIY which is totally fair but not being DIY doesn't mean getting hosed. Run away from this guy. Others are right he is blasting chaff into the air to confuse you and make you think you can't do it w/o him.

 

[Snag75]

Thank you, this is giving me a lot to think about.  I'm glad that I can table the solo-K plan for at least another year (see my update above if you missed it), but still even these other decisions are stressing me out since a lot of what I'm working with is the results of other decisions that I now wish I had done differently (i.e. gotten more term insurance and had been more savvy about these other vehicles).

As a whole I do like this advisor, he recognizes that I don't want to pay too much in fees, while still having a comprehensive plan going forward.  He has a lot of tools at his firm to help guide what future finances might look like, which I feel I somewhat need at this point to figure what decisions I should make re: investing in the future (how much pre- vs post-tax to put away, given all the other pots of funds I can hope to expect to use in the future).  I do like the one-stop shop and that he's very accessible and not pushy at all.

I brought up the option of solo-K outside his firm and he said he looked into lower cost options at his firm (because he didn't like those fees either), and also that when the time comes we can try to compare those head-to-head with the lower cost brokerages and decide then.

Of course I don't want to be overrun with fees, and I'm not sure about the "active management" strategies of his firm either.

That said, if I'd just walked into this game, my initial thought process would be, "Doesn't it make sense that an advisor's fee is based on how well he/she advises you, vs a flat rate?  That way, they're incentivized for you to make money."  I understand this makes more sense if you have GROWTH, and that the same amount of advising can help small pots grow at the same rate as big ones, so the percent-model on your total pot does not seem fair either.

And then, my understanding of why active management is not advised (even when modified based on long term goals, minor adjustments vs strong reactions) is that people make mistakes and try to correct things that should have just been left to correct itself over time.  This makes sense too...but if someone is in charge of watching these things and makes GOOD decisions (like fund managers), shouldn't I, in theory, expect more growth than if it's just left alone?

I'm trying to wrap my head around how can I get the advice and hand-holding and game-plan-making, without getting "fleeced"?   I feel like I'd be willing to pay a fee for all the advice, but without the active management.  It sounded like the fees with him would be around 1% of the IRA funds I moved to him (the rest of my stuff he did advise me on, but I controlled the holdings) -- what is a reasonable flat fee to pay an FA for hand-holding and making a plan?  I'm wondering if it makes sense to stay with him for a year, figure out my plan, then move the IRA funds out (like to solo-K) to manage on my own and see if he will still help me for a flat-rate?

[Snag75]

MPMD sorry your response came in while I was writing mine above.  Actually I was literally about to do the backdoor Roth myself when I ended up getting in touch with this guy (he had reached out to me in the past and I couldnt' deal with it at the time), and then put it off because we ended up talking about other changes and plans, and then I felt an urgency to get out from under my other FA before the last election -- but yes, I can see how it would be fun and satisfying, and I look forward to doing it!

I think the urgency was about doing their solo-K which seems more involved, and then getting all the IRA funds rolled over before the end of the year.  When I rolled out from under my previous FA it took well over a week due to various glitches here and there, plus a holiday.  Though I think he was also not that familiar with the reporting of the backdoor-Roth and thought the conversion would be easier to document if done all in 2018.  Whatever, looks like I will plan to do front-door now anyway.

I think he knows I can do it without him, but he also wants my business.  I don't mind giving him my business (again, I don't get the impression he would mis-advise to make a buck, and I would sooner pay his fees than those of a CPA to do my taxes) -- I just don't want to pay for more than the services I really need.