While everyone is busy getting ready for the upcoming holidays, we here at Total Office, Inc. are busy helping advisors process their client’s RMD’s before the end of the year. This process includes auditing qualified accounts that are on automatic RMD withdrawal to ensure that they have been or will be taken out correctly.
Our experience in working with a variety of custodians, have taught us valuable lessons one of those being that it pays to take the extra time to verify that correct withdrawal amounts have been taken and coded correctly, especially now that so many RMDs are set up as automatic withdrawal.
If you don’t think this needs done, think again!
Here are just a few examples that we run into every year while auditing RMD Withdrawals:
The cashiering agent at a particular custodian punches in the wrong digit and the RMD amount ends up being too much or in most cases short.
RMD’s taken from the wrong account.
Advisor fees coded as an RMD.
The RMD runs, but hits a NIGO. The NIGO is resolved but the custodian fails to re-run the RMD.
The RMD is never processed for a variety of reasons.
These are just some of the situations we run into every year. While in most instances the custodian will take the responsibility if it’s their fault, it’s the advisors responsibility to explain to their client what happened, not a pleasant thing to do, especially if there are fees and/or penalties that have to be paid up front until the situation is resolved. Something no advisor wants to do.
One final piece of advice, if you still need to get RMD forms signed by your client, don’t delay, do it today! With the holidays near, clients are busy with their holiday shopping, parties and vacations that they may not be available to sign the needed forms in time for processing before the deadline!
As always, Total Office, Inc. is here to help you with these and other tasks!
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