The tax season is over. I also get a break from the deluge of questions via emails and comments on my tax-related articles. A common theme goes like this:
I read your article, but when I called [Fidelity, Vanguard, fill in the blank] they told me [something contradictory].
I’m surprised that customer service reps at Fidelity, Vanguard, and other financial institutions are giving tax information. It’s not their role. Customer service reps are in an execution role. If you want to do X, they will do X for you. They are not in a position to tell you whether you should do X in the first place or what the tax consequences are if you do X.
“They told me if I contribute non-deductible to a traditional IRA and then convert it to Roth it would not be taxed.” Wrong. They don’t know what other IRAs you have.
“They told me I have to convert to Roth before April 15.” Wrong. April 15 has nothing to do with it.
I don’t blame the customer service reps. Customer service reps are great people doing a difficult job. Knowledge and training vary among the large number of reps. If you ask them questions, they feel compelled to give you an answer. They answer so many calls. Mistakes happen. If you don’t want to get misinformation, it’s better if you know what types of questions you should ask customer service and what types of questions you shouldn’t.
Ask them whether they offer X or how to do X at that institution. Research and decide on your own whether you can or should do X. You reduce your chance of getting bad information if you don’t ask them the wrong questions in the first place.
On the other hand, the whether and how questions are best handled by customer service. Policies and procedures change. Customer service is the best source if you can’t find the information you need on the institution’s website. Customer service is part of the package you are already paying for. Don’t be shy about using customer service. It will help you decide whether you want to continue using that institution.
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