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Fidelity Net Benefits 401k Account / Round Trip fee policy

1 Lexington, MA, United States Review updated:
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My company's Fidelity 401k plan has what appears to be an undocumented policy of penalizing a so-called "round trip" for a given mutual fund.

Nowhere on the NetBenefits web site are the policies related to these penalties spelled out. I have confirmed this today with a phone call to a Fidelity representative, who by the provided little substantive help -- not his fault but the fault of policies he has to work with, I should think.

The penalties are minor in nature: a letter for the first offense, a suspension of permission to trade that fund for 85 or 90 days, an ominous sounding "monitoring period" invoked for 12 months, etc. It's all spelled out nicely in the condemnation letter I received. My point is this should be information that is readily available and highlighted on the NetBenefits web site, not buried somewhere or, as the representative stated "only available orally" or when a transaction is made on that ephemeral page where you click for transaction execution.

In addition, there are other monetary fees that can be charges by the fund for such activity. That information is available (sort of, its buried deeply in some) in their prospectuses. That information should be linked to that for the Round Trip penalty information, as it involved the same activity.

This information is hidden and covered up. A company like Fidelity, with whom I have had many years of good business relations needs to provide this information freely and openly to its customers.

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  • Wh
      30th of Sep, 2009

    This is not Fidelity's policy, it's the Mutual Funds. All that information is available in the prospectus. It is the same for a majority of retirement plan providers. Making round trips and frequently trading in and out of mutal funds with large sums of money ruins the mutual fund and makes the company charge more for expenses. If you want to day-trade, open a brokerage account and leave mutual funds alone.

    0 Votes
  • Tr
      10th of Aug, 2010

    I agree with the above comment. If you want to trade actively learn the proper products so the rest of us don't have to pay higher expense ratios. companies can't be held responsible for you ignorance.

    0 Votes
  • Wi
      27th of Mar, 2011

    As a related issue: Beware of Fidelity Netbenefits' estimates of your short/long term shares on your Spartan Index funds. As of 3/23/2011, their online accounting tool has a bug in that it slightly overestimates the number of long term shares. If you try to redeem or exchange the exact amount of long term shares that they report that you have, you could wind up paying a small short-term redemption fee due to their rounding errors. They told me that I should handle the rounding error myself (e.g. by one less share than their tool reports). Excuse me Fidelity but aren't you in the business of financial accounting? They told me they would fix their tool but I am not holding my breath.

    0 Votes
  • Mi
      30th of Mar, 2011

    I would like to know how long this has been in effect. When I was employed by Anheuser-Busch I could make what are called roundtrips at any time. Now that I am retired from A.B. they start up with this what I call nonsense. I had made only 2 changes in my portfolio in the last year or two and they sort of scolded me on the phone, then I get a letter of explanatiion in the mail about 2 weeks later. Whats up with this?????

    0 Votes
  • Ea
      4th of Oct, 2011

    The problem with the fines is that you either pay a fine or let the fund pick your pockets clean when the bottom of the fund drops out. Apparently, nobody at Fidelity is watching or managing the fund to avoid these huge losses, but they sure watch the customers if they try to protect what is left of their account.

    0 Votes
  • St
      5th of Apr, 2012

    My reaction to that letter is withdrew from that fund and never get in again. I hate this kind of letters. My reaction to Fidelity is once I leave this company I will immediately roll my 401k out to some other companies.

    0 Votes
  • Pe
      23rd of May, 2014

    First of all, I find it very interesting that Fidelity is able to hide their comments and reviews.
    After attempting for four years to process the rollover from a 401(k) to an IRA, I found that the Alstom Fidelity benefit plan would not allow me to use another investment group that I needed to open up a traditional Ira with Fidelity. I have been informed numerous times that the process was completed. I've been given expectations that the company is completely unable to fill and it does not matter which department you call: escalations, management, supervisors, customer care -no one ever returns a phone call. They say they are using recorded phone calls for training and yet can't go back and reference what has been said and with the communication was. Well it's a two-way street by law if you're recording that allows me to record as well. I have provided a court order enforcing that also Fidelity release the funds and they still have yet to comply with that order.
    Love Alstom Fidelity will not allow you to get your own money or change the way you invest!

    0 Votes

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