National Financial Services will be charging Premiere Select Retirement accounts the annual $40.00 retirement maintenance fee on November 21st, 2022.
How can I avoid the $25.00 Service Fee for home office covering the fee?
Representatives may review their population of impacted accounts with insufficient funds to cover the maintenance fee by running a report through Wealthscape, beginning September 20th, 2022. (Menuà Reports à Client and Account Informationà Retirement Account Annual Fees w. Core Cash Balance).
To assist, ESI Operations will automatically deliver this report to all eligible Wealthscape users through the automated reporting alerts system. The automated report will be delivered during the 4th Quarter of 2022, on/around the first of each month.
Proactively running the report will allow you 3 months to contact clients and get a trade placed or cover with one of the methods detailed below. It is more efficient to raise multiple years of cash with a single trade, alleviating the need to repeat the process each year and saving on trading costs.
If home office must place a trade to raise cash for the fee, the representative of record will be charged the $25.00 service fee, per trade. Uncollected fees of less than $25 will be reversed against the registered representative’s compensation.
How Customers Can Cover the Fee
Customers have the following payment methods to cover the IRA annual maintenance fee:
- Deduction from qualified account money market position (default)
- Deposit a $40.00 check using the Wealthscape Investor Mobile App and code as Retirement Maintenance Fee (only available through mobile deposit)
- Journal from their non-retirement brokerage account
- 1st party Electronic Funds Transfer (EFT) from their bank account
- 1st party Intra-Bank Payment (IBP) from their bank account, available to NFS approved, bank affiliated firms
To elect one of these payment methods on an ongoing basis, the Premiere Select IRA Annual Maintenance Fee Payment Instructions Form must be completed. Clients can also elect payment methods on the Premiere Select IRA Application when establishing a new account.
Clients no longer receive a Retirement Fee Invoice, but the following message will be applied to September account statements for impacted account holders:
The 2022 retirement account annual maintenance fee is due on 10/31/2022. This fee covers the costs associated with the recordkeeping of your account and reporting required by the IRS. If you would like to pay the fee from your bank account or your nonretirement brokerage account, contact your broker/dealer. If you do not provide payment instructions, the fee will be deducted from your retirement account on 11/21/22. If funds are not available to cover the fee, your account may receive an unpaid fee posting. Your broker/dealer may sell any or all of your retirement assets to satisfy the fee and any associated expenses such as brokerage commissions and/or liquidation charges. For information about the annual fee, refer to the Retirement Account Customer Agreement or contact your broker/dealer.
Ineligible Accounts and Automatic Waivers
Accounts that are not billing eligible:
- New accounts opened between September 19, 2022, and December 31, 2022, are excluded from the 2022 billing cycle
- Accounts with current year TOA or Full Distribution status
- Closed accounts with less than $35 in market value as of September 16, 2022
- Abandoned accounts (with H1 or H5 restrictions)
- MAD Funding accounts
Accounts with Automatic Waivers
- IRA accounts for the benefit of employees of ESI, National Life and affiliates, including registered representatives, branch office employees and spouses of said employees that are coded as employee accounts
- IRA accounts with total assets of $250,000 or more
- ESI Illuminations accounts that meet program minimums on Valuation Day (September 16th, 2022)
Accounts that are ineligible or qualify for a waiver will not receive the annual retirement maintenance fee notice on their September account statement, nor will they be included in the November fee collection process. A representative can request a waiver of the annual maintenance fee and have it charged against compensation by submitting the Annual Maintenance Fee Waiver Request Form by November 15th.
Summary of Important Dates
September 16, 2022 – Valuation Day – Account market values and core account balances are recorded in preparation for billing and application of subsidy programs.
September 30, 2022 – Customer Notification – Accounts meeting the billing criteria will receive the annual retirement maintenance fee notice on the September account statement.
November 1–18, 2022 – Collection Period – Accounts that have instructions on file to pay the annual maintenance fee via journal, EFT or IBP may have the fee deducted.
November 15, 2022 – Maintenance Fee Waiver Request Deadline – Representatives must submit the Maintenance Fee Waiver Request Form by November 15th to absorb fees for their clients.
November 21, 2022 – Collection Day – Unpaid fees are posted to customer accounts. Accounts with insufficient cash will result in a cash debit balance.
January 5, 2023, through January 27, 2023 – Liquidation/Write Offs – Accounts with eligible securities will be liquidated to cover uncollected fees or written off and charged to the advisor on record (if less than $25).
Questions
If you have any questions regarding this Field Notice, please contact ESI Operations at 800-344-7437.
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