Handling rollover analysis can be both rewarding and daunting for financial advisors. We've learned over the years that some of the most common—and frustrating—errors are often preventable with the right process and technology in place. Our clients trust us to give recommendations backed by sound data, clear comparisons, and audit-ready documentation. In our experience, streamlining these workflows isn't just about speed—it's about boosting quality, reducing compliance risk, and delivering greater value to clients.

Understanding Where Rollover Analysis Errors Come From

Let's start with the real-world challenges: Advisors must collect key plan data, perform fair and thorough comparisons, and document everything to PTE 2020-02 standards. We've repeatedly seen that without well-defined processes—especially for independent RIAs or solo advisors—mistakes happen. These errors can put your reputation, your client, and your practice at significant risk. Just one flawed analysis, whether due to missing Form 5500 data or incomplete documentation, can have regulatory or client consequences.

Common Rollover Analysis Errors & How We Solve Them

1. Incomplete or Outdated Plan Data

One of the top pain points is getting accurate, up-to-date plan fees, services, and features. We often see advisors relying on old fee disclosures or incomplete employer information, which can derail an analysis from the outset.

Solution: Use automated Form 5500 database access to obtain plan data directly. Our workflow pulls data from over 500,000 retirement plans, so you're not left chasing paperwork or guessing. Always cross-check this with plan documents or administrator confirmation for maximum accuracy.

2. Narrow Fee or Feature Comparisons

Some advisors focus only on expense ratios, ignoring administrative fees, service limitations, or key investment features. This approach risks non-compliance since the DOL expects a broad analysis of all relevant factors.

Solution: Build your comparisons around all fees—admin, advisory, investment, and trading costs—plus critical services like advisory planning, tax features, and digital access. Ask clients to rank their priorities, then show visual side-by-side comparisons in your report. Weighted scoring can demonstrate that you considered each factor seriously.

3. Missing the 60-Day Rollover Deadline

Delays after client approval are common. If execution drags, clients can miss the 60-day window, resulting in a taxable event and possibly a penalty if under 59½.

Solution: Establish an internal checklist that tracks each step, from document signing through fund transfer and investment. Set calendar reminders at each milestone to head off potential problems early.

4. Recommending Indirect Rollovers

Indirect rollovers create avoidable hassle and risk. Clients may not realize they must redeposit the full amount, including withheld taxes, within the deadline.

Solution: Always document a preference for direct, custodian-to-custodian transfers. Confirm with both custodians that direct transfer is available. Your report should explain to clients the withholding risks of any other method.

5. Failing to Invest Rollover Funds Quickly

Clients sometimes leave rollover funds in cash, missing growth opportunities and defeating the purpose of a well-timed transition.

Solution: Before funds arrive, set an investment allocation with your client and document it. Coordinate with the new custodian to promptly deploy the strategy so assets don't languish in cash.

6. Incomplete DOL Compliance Documentation

Regulators need proof—detailed evidence that you followed best-interest procedures, disclosed all conflicts, and obtained client acknowledgment. Missing documentation undermines your defense in an audit—even if your recommendation was sound.

Solution: Use standardized report templates that include all PTE 2020-02 requirements: client financial situation, your analysis, alternatives considered, disclosures, and signed acknowledgment. This ensures nothing falls through the cracks and speeds future audits.

7. Overlooking Plan-Specific Rules

Not every 401(k) or retirement plan allows rollovers at any time, and restrictions, fees, or vesting schedules can complicate matters.

Solution: Document confirmation from both the current plan administrator and the new custodian about eligibility and any time or fee restrictions. Make it routine to check for outstanding loans or special plan requirements.

8. Ignoring Roth vs. Traditional Tax Treatment

Overlooked tax details could cost your client money. For instance, rolling pre-tax 401(k) dollars into a Roth IRA triggers income tax.

Solution: Explicitly confirm the tax status of all existing and future accounts. Clearly state the implications in your analysis and recommend the right rollover destination based on tax status.

9. Failing to Disclose Conflicts or Compensation

Clients must know how your compensation changes with a rollover recommendation. Hidden fees or undisclosed relationships can erode trust and invite regulatory problems.

Solution: Add a clear, standalone "Conflicts of Interest and Compensation" section to every client analysis. Disclose all compensation and note how it impacts your recommendation, reinforcing your commitment to transparency.

Optimizing the Workflow with Technology

We've noticed a direct connection between manual processes and error frequency. When tasks require rekeying, hand calculations, and cobbled-together documentation, everything takes longer and errors multiply. Automation, by contrast, lets us:

Automatically pull Form 5500 data and generate side-by-side fee/service comparisons
Use preset analysis templates that ensure every regulatory disclosure is included
Store audit-ready PDF reports and track plan, advisor, and client signatures for compliance checks

By moving to an automated solution, we routinely shave hours off our process (10–15 minutes per rollover vs. 2-3 hours manually). This time recovery alone can allow a solo or small firm advisor to increase their book or gain freedom for client strategy work.

A Quality Assurance Checklist for Rollover Analysis

Before finalizing any analysis, we double-check:

Data Verification: Plan and IRA fees are validated from authoritative sources, including Form 5500 or disclosure documents.
Analysis Completeness: Comparisons cover all costs and services relevant to the client's needs, reflecting their stated priorities.
Compliance: Documentation covers best-interest analysis, alternatives, conflicts, and is signed by the client.
Execution Readiness: Direct transfer is confirmed, investment allocation is pre-approved, and all tracking is in place for the 60-day deadline.

Why This Matters: Protecting Clients and Our Practice

Errors in rollover analysis have wide effects, from client tax bills to regulatory penalties. As fiduciaries, we are committed to getting every detail right—for our clients, our reputation, and the sustainability of our business. Process standardization, documented compliance, and streamlined technology are all levers that drive quality. The investment pays back quickly: increased efficiency, higher client trust, reduced compliance anxiety, and the ability to help more clients with confidence.

For deeper insights on regulatory documentation, see our guide: What Financial Advisors Need to Know About PTE 2020-02 Fiduciary Documentation Requirements.

And for understanding recent Form 5500 changes that impact rollover analysis workflows, check out: How Recent Changes to Form 5500 Reporting Impact Rollover Analysis Compliance.

Final Thoughts

Proactively addressing common rollover analysis pitfalls not only protects your clients but strengthens your advisory business. If you're looking for a faster, more reliable way to create audit-ready, DOL-compliant analyses, you can try our platform at Simple Advisor Tools—with a free, instant-access trial and no sales calls required.

Troubleshooting Common Rollover Analysis Errors in Financial Advisor Workflows