401K Rollover To IRA, Wells Fargo Charging $40 Withdrawal Fee

Coastie | Nov 13, 2019 | 3 posts since 2018

My wife is moving an old 401k account from Wells Fargo to a Fidelity IRA.

Fidelity set up the rollover, but Wells Fargo will not send a check to a 3rd party, so while it is titled to Fidelity, we're the middle man.

The kicker is that Wells Fargo is charging a $40 "withdrawal fee" for this check transaction. Is that a legit fee? I can't find anything on that $40 withdrawal fee on their website or through google.

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Answers

GH1 | Nov 13, 2019 | 1,055 posts since 2017

Will you be charged a penalty for withdrawing? Yes fidelity charges a fee also. I think its wrong. Should be straight custodian to custodian

Coastie | Nov 13, 2019 | 3 posts since 2018

No penalty since we are doing a rollover, just what I would consider an excessive "withdrawal fee"

GH1 | Nov 17, 2019 | 1,055 posts since 2017

Etrade does the same and also 40 dollar fee to close a account. Yes clearly frustrating

steved | Nov 17, 2019 | 24 posts since 2014

Ask Fidelity if they will cover the $40 fee. They usually do.

SYC | Nov 18, 2019 | 312 posts since 2017

Fidelity, like Wells Fargo, will not mail the rollover check directly to your new custodian. You will get the check in the mail from Fidelity and then upon receipt you will have to mail the check to your new custodian. Until the check arrives in the hands of your new custodian, they are getting the float (and you are losing interest income).

me1004 | Nov 18, 2019 | 1,379 posts since 2010

One point I think other responders missed, the OP says there is nothing about this fee anywhere at Wells Fargo, and I take that to mean including any and all pertinent disclosures. If they don't disclose it, they can't charge it. The fee might generally be allowed, but not if it is not disclosed up front before you lock your money in.

And, OP says the fee is not for a check, it is for a "withdrawal fee" "for this check transaction." That is unclear, but I think he is saying it is a withdrawal fee, not a check fee. But if a check fee, they don't have to mail a check, Fidelity can get it via ACH or other methods.

Also, when you do a custodian to custodian transfer, Wells would not be sending the "check" to a third party, they would be sending it to you, at Fidelity -- so this talk about not being able to send a check from your account to a third party is not applicable. They might charge the $40 fee, but you at least should not have to handle the actual move of funds or file all the paperwork involved in the move.

Wells has a long history of shenanigans, and this sounds like Wells again.

I wonder, why not close that 401K to your savings or checking account, and then have Fidelity take the money from there? You have up to 60 days after withdrawing the money to get it back into an IRA elsewhere (I understand this is a conversion). Is Wells charging the fee if you simply transfer the money to a different Wells account? If not, you can do that, and then you would be under the rules of that other, regular account.

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