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    Robinhood launches crypto trading service in the EU

    Robinhood on Thursday launched its crypto service in the European Union, allowing users to buy and sell a range of over 25 digital currencies.
    The move marks Robinhood’s second big expansion outside the U.S. after the firm opened a waitlist for U.K. customers to join its stock-trading platform in early 2024.
    Several major U.S. crypto firms are turning to the European Union for growth after facing a tough time from regulators stateside.

    Robinhood logo displayed on a phone screen and representation of cryptocurrencies are seen in this illustration photo taken in Krakow, Poland on January 29, 2023. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
    Nurphoto | Nurphoto | Getty Images

    Online brokerage giant Robinhood on Thursday said it’s launching a cryptocurrency trading feature in the European Union, pushing further outside the United States as the company looks to unlock growth from international markets.
    Robinhood said its new crypto product would allow customers to buy, sell, and hold from a range of more than 25 tokens, including bitcoin, ether, ripple, cardano, solana, and polkadot. The company hopes to offer more tokens, as well as the ability to transfer and “stake,” or earn rewards from, crypto in 2024.

    The move marks Robinhood’s second major expansion outside of the U.S., after it announced late last month that it plans to launch stock trades for U.K. customers by early 2024. The company opened a waitlist in the U.K. last week for the service, which will offer yields of up to 5% on customer deposits.
    Robinhood is looking to tempt EU users into using its service with the ability to earn free bitcoin for users who trade lots and refer the app to their friends. The company will offer users up to one bitcoin, based on a a percentage of their monthly trading volume and the number of users they refer when they sign up.
    It comes as several major U.S. crypto firms are turning to the European Union for growth after facing a tough time from regulators stateside. The U.S. Securities and Exchange Commission has targeted several crypto firms, including Coinbase and Binance, with lawsuits alleging they violated securities laws.
    The EU, meanwhile, has proposed a comprehensive set of regulation, called the Markets in Crypto-Assets regulation, that would bring in stricter rules for crypto trading platforms and issuers of so-called stablecoins — tokens pegged to real-world assets like the U.S. dollar or euro.

    Johann Kerbrat, general manager for Robinhood Crypto, said the firm chose the EU as the first international target market for its crypto product due to the region’s development of the world’s first comprehensive set of laws specifically tailored for the crypto industry.

    “The EU has developed one of the world’s most comprehensive policies for crypto asset regulation, which is why we chose the region to anchor Robinhood Crypto’s international expansion plans,” Kerbrat said in a statement Thursday.
    Robinhood also touted transparency and security features in its European crypto offering to convince users to trade with its service. The company said it would transparently display spreads on trades, including the rebate the firm receives from sell and trade orders.
    Robinhood said it never commingles customer coins with business funds other than for operating purposes, such as payment of blockchain network fees, and stores all its customers’ coins in cold wallets disconnected from the internet.
    Robinhood said it also has a crime insurance policy in place to ensure a portion of assets held across its storage systems are protected against losses from theft, including cybersecurity breaches. The policy is underwritten by underwriters at Lloyd’s, the insurance marketplace.
    Theft of crypto has been a big problem for the industry over the past couple of years, with major hacks of blockchain networks resulting in millions’ worth of digital coins being drained from users’ wallets. Just last month, the HTX exchange and Heco bridge, two platforms linked to high-profile entrepreneur Justin Sun were hacked for an estimated $115 million.
    The blurring of lines between trading venues and custodians became a big problem last year when FTX, the disgraced former $32 billion crypto exchange, collapsed after revelations that its sister market-making firm Alameda Research used customer funds to make risky bets on certain tokens. More

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    Wall Street CEOs try to convince senators that new capital rules will hurt Americans as well as banks

    The CEOs of eight banks sought to raise alarms over a sweeping set of higher standards known as the Basel 3 endgame.
    “The rule would have predictable and harmful outcomes to the economy, markets, business of all sizes and American households,” JPMorgan Chase CEO Jamie Dimon told lawmakers.
    Democratic Sen. Sherrod Brown, chairman of the Senate Banking Committee, ripped the banks’ lobbying efforts against the proposed rules.

    (L-R) Brian Moynihan, Chairman and CEO of Bank of America; Jamie Dimon, Chairman and CEO of JPMorgan Chase; and Jane Fraser, CEO of Citigroup; testify during a Senate Banking Committee hearing at the Hart Senate Office Building on December 06, 2023 in Washington, DC.
    Win Mcnamee | Getty Images

    Wall Street CEOs on Wednesday pushed back against proposed regulations aimed at raising the levels of capital they’ll need to hold against future risks.
    In prepared remarks and responses to lawmakers’ questions during an annual Senate oversight hearing, the CEOs of eight banks sought to raise alarms over the impact of the changes. In July, U.S. regulators unveiled a sweeping set of higher standards governing banks known as the Basel 3 endgame.  

    “The rule would have predictable and harmful outcomes to the economy, markets, business of all sizes and American households,” JPMorgan Chase CEO Jamie Dimon told lawmakers.
    If unchanged, the regulations would raise capital requirements on the largest banks by about 25%, Dimon claimed.
    The heads of America’s largest banks, including JPMorgan, Bank of America and Goldman Sachs, are seeking to dull the impact of the new rules, which would affect all U.S. banks with at least $100 billion in assets and take until 2028 to be fully phased in. Raising the cost of capital would likely hurt the industry’s profitability and growth prospects.
    It would also likely help nonbank players including Apollo and Blackstone, which have gained market share in areas banks have receded from because of stricter regulations, including loans for mergers, buyouts and highly indebted corporations.
    While all the major banks can comply with the rules as currently constructed, it wouldn’t be without losers and winners, the CEOs testified.

    Those who could be unintentionally harmed by the regulations include small business owners, mortgage customers, pensions and other investors, as well as rural and low-income customers, according to Dimon and the other executives.
    “Mortgages and small business loans will be more expensive and harder to access, particularly for low- to moderate-income borrowers,” Dimon said. “Savings for retirement or college will yield lower returns as costs rise for asset managers, money-market funds and pension funds.”
    With the rise in the cost of capital, government infrastructure projects will be more expensive to finance, making new hospitals, bridges and roads even costlier, Dimon added. Corporate clients will need to pay more to hedge the price of commodities, resulting in higher consumer costs, he said.
    The changes would “increase the cost of borrowing for farmers in rural communities,” Citigroup CEO Jane Fraser said. “It could impact them in terms of their mortgages, it could impact their credit cards. It could also importantly impact their cost of any borrowing that they do.”
    Finally, the CEOs warned that by heightening oversight on banks, regulators would push yet more financial activity to nonbank players — sometimes referred to as shadow banks — leaving regulators blind to those risks.
    The tone of lawmakers’ questioning during the three-hour hearing mostly hewed to partisan lines, with Democrats more skeptical of the executives and Republicans inquiring about potential harms to everyday Americans.
    Sen. Sherrod Brown, an Ohio Democrat, opened the event by lambasting banks’ lobbying efforts against the Basel 3 endgame.
    “You’re going to say that cracking down on Wall Street is going to hurt working families, you’re really going to claim that?” said Brown, who chairs the Senate Banking Committee. “The economic devastation of 2008 is what hurt working families, the uncertainty and the turmoil from the failure of Silicon Valley Bank hurt working families.” More

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    Goldman Sachs is betting on the small cap rally. Here’s how.

    Small cap stocks are undergoing a resurgence, and Goldman Sachs Asset Management is looking to capitalize on it through the exchange-traded fund space.
    “In the last five weeks, we’ve launched three new active products. Two are the premium income. One, believe it or not, is small cap core,” Brendan McCarthy, the firm’s managing director of exchange traded funds, told CNBC’s “ETF Edge” on Monday. “This is our first active small cap ETF, and that’s very much on the back of investor demand.”

    It’s called the Goldman Sachs Small Cap Core Equity ETF and it’s up almost 8% since its early October launch date. Meanwhile, the Russell 2000, which tracks small cap stocks, is up more than 7% in that same time frame as of Tuesday’s market close.
    According to the fund’s website, top holdings include Federal Signal Corp, Meritage Homes and Onto Innovation.
    Despite recent appetite for small caps, the Russell 2000 is still underperforming the broader S&P 500 index by about 13% so far this year.

    Disclaimer More

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    Vietnamese companies eye the U.S. IPO market amid a lull in Chinese listings

    “Something like VinFast puts [Vietnam] on the map,” said Johan Annell, Beijing-based partner at ARC Group. It sends a message that “despite capital controls, which I think is the major formal barrier for companies, it is possible for them to do IPOs.”
    Firms that scour for potential IPO clients years in advance say they are talking to more companies in Vietnam and the surrounding region.
    Vietnam’s gross domestic product surged 3.6 times on a per capita basis between 2002 and 2022, to nearly $3,700, according to the World Bank.

    A VinFast EV car on display at the New York Auto Show, April 13, 2022.
    Scott Mlyn | CNBC

    BEIJING — A new group of Asia-based companies are contemplating initial public offerings in the U.S., where international listings were once driven mostly by Chinese startups.
    Vietnam-based electric car company VinFast broke new ground with its U.S. listing in August, via its merger with the U.S.-listed special purpose acquisition company Black Spade Acquisition.

    While not strictly an IPO, the listing was soon followed by Vietnamese tech unicorn VNG’s filing to list on the Nasdaq. VNG’s products include gaming, fintech and music streaming.
    “Something like VinFast puts the [country] on the map,” said Johan Annell, Beijing-based partner at ARC Group.
    It sends a message that “despite capital controls, which I think is the major formal barrier for companies, it is possible for them to do IPOs,” he said.

    VNG noted in its prospectus that Vietnamese law prevents “foreign investors” from owning more than 49% of the capital used to establish a local company operating in gaming and certain other sectors. As a result, VNG is part of a reorganization which uses a Cayman Islands holding company to list in the U.S., the filing said.
    “Our corporate structure involves unique risks, has not been tested in any court and may be disallowed by Vietnamese regulatory authorities,” the filing said.

    It’s unclear when VNG will go public. But firms that scour for potential IPO clients years in advance say they are talking to more companies in Vietnam and the surrounding region.
    As local companies grow, “they are outgrowing the ability of those markets to provide the capital that they need,” said Drew Bernstein, co-chairman of accounting firm MarcumAsia. “It’s still the very early stages of the game.”
    Bernstein said he attended investing conferences in Malaysia and Vietnam in late October, where many of the attendees were the same people who’d he’d met over the last 10 to 15 years in the China-U.S. IPO circuit.
    Since the fallout over Didi in the summer of 2021, regulation and a tepid U.S. IPO market have stalled most Chinese listing plans. Only one of the 20 China-based companies that listed in the U.S. this year raised more than $50 million, according to Renaissance Capital.
    Investor relations, capital markets advisory and financial media relations firm The Blueshirt Group has also worked with many Chinese companies to list in the U.S.
    But the firm’s managing director, Gary Dvorchak, said Blueshirt organized a seminar in April with 20 to 30 Vietnamese-based companies about the path to a U.S. IPO. Many of the companies were in tech, such as payments, online games and e-commerce, he said.
    “Just in contrast the rest of Asia there’s nothing in Thailand, some in Indonesia,” he said. “So the fact that you see so many in Vietnam is really meaningful.”

    A growing startup ecosystem

    CNBC reached out to about two dozen startups with headquarters or a major office in Vietnam to ask about their U.S. IPO plans. Most of those who responded indicated any listing was still a ways off, but noted rapid growth in local startups over the last 15 years.
    “Capital available to Vietnamese startups has increased tremendously compared to 10 years ago,” said Nguyen Nguyen, CEO of fintech startup Trusting Social, whose offices in the region include Singapore and Vietnam.
    He added the growing startup ecosystem has attracted many people of Vietnamese heritage to return to their home country, while domestic economic growth has increased the market size for local players.
    Vietnam’s gross domestic product surged 3.6 times on a per capita basis between 2002 and 2022, to nearly $3,700, according to the World Bank.
    ELSA, which uses artificial intelligence to help people learn English, is based in the U.S. while co-founder and CEO Vu Van hails from Vietnam. She said given the success of Southeast Asian ride-hailing company Grab, more Vietnamese companies are starting to look beyond the domestic market to regional business.
    For ELSA, “when we started the company our aspiration has always been a global business with a global footprint,” Van said, adding that a “U.S. IPO would help us with that global footprint.”
    Out of 103 U.S. IPOs this year, 10 were from companies based in Southeast Asia — split between Singapore and Malaysia, according to Renaissance Capital data as of Nov. 29.
    “It is unusual to see this many listings from Asian companies outside of China,” the firm said. “However, none of these are of a significant size.”
    George Chan, global IPO leader at EY, expects “a lot” of companies from Southeast Asia will reach the IPO stage in the next 12 to 18 months, and might also consider the Hong Kong exchange.

    Read more about China from CNBC Pro

    The trend is not replacing Chinese IPOs in the U.S., Bernstein said, but rather creating new opportunities. MarcumAsia is expanding its offices in Beijing, Tianjin, Guangzhou and Shanghai, and opened an office in Hong Kong this fall.
    MarcumAsia opened an office in Singapore in May 2022 and doesn’t have plans for other offices in Southeast Asia right now, he said. “There haven’t been enough large deals done in the markets outside of China to give people the sense of security that they can get the deal done.”
    Ultimately, global IPO markets need to recover before any company can make serious plans.
    “There is definitely a very robust pipeline of companies from Southeast Asia who are evaluating the U.S. markets,” Bob McCooey, a vice chairman at Nasdaq, said in a phone interview this fall. He noted that given market conditions, many companies are delaying their listing plans to the first half of next year. More

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    Job data suggests ‘soft landing’ is increasingly likely, economists say

    The U.S. Federal Reserve has raised interest rates to tame high inflation.
    A soft landing would mean it succeeded in reducing inflation while avoiding a recession.
    U.S. Department of Labor data on job openings, quits, hires and layoffs suggest a soft landing may be near.

    Luis Alvarez | Digitalvision | Getty Images

    The U.S. economy inched closer to a so-called “soft landing” after a new batch of labor data, economists said.
    A soft landing is a good thing. It would mean the Federal Reserve has accomplished the difficult task of taming inflation without triggering a recession.

    Job openings, a barometer of employer demand for workers, fell by 617,000 to 8.7 million in October, the lowest since March 2021, the U.S. Department of Labor reported Tuesday in its monthly Job Openings and Labor Turnover Survey.
    “Another key ingredient of a sustainably soft landing is falling into place,” Jason Furman, a professor at Harvard University and former chair of the White House Council of Economic Advisers during the Obama administration, wrote about job openings.

    Why a soft landing is like ‘Goldilocks’ porridge’

    Steaming bowl of oatmeal porridge, made with Irish oats, wheat berries and barley.
    Jon Lovette | Photographer’s Choice Rf | Getty Images

    On its face, a weakening labor market may sound like bad news — but that trend is by design.
    The Fed started raising borrowing costs aggressively in early 2022 to tame stubbornly high inflation. By raising interest rates to their highest level since 2001, the central bank has aimed to cool the economy and the labor market.
    The Fed has been walking a tightrope: bringing down inflation from four-decade highs without causing an economic downturn. The opposite — a hard landing — would mean a recession.

    A soft landing is like “‘Goldilocks’ porridge’ for central bankers,” Brookings Institution economists wrote recently. In this scenario, the economy is “just right — neither too hot (inflationary) nor too cold (in a recession),” they said.

    “It’s absolutely the best possible outcome,” said Julia Pollak, chief economist at ZipRecruiter. “And I think the chances [for it] get higher and higher all the time. We are very, very close.”
    There is no official definition for a soft landing. According to conventional wisdom, it has only been achieved once — in 1994-95 — in the history of 11 Fed monetary-policy-tightening cycles dating to 1965, the American Economic Association wrote.

    How the labor market fits in

    Why the job market is already ‘back into balance’

    The latest labor data added to encouraging news about a likely soft landing, economists said.
    A big pullback in job openings didn’t coincide with weakness elsewhere. Quits and hires held steady around their respective pre-pandemic levels. Layoffs remain low and are about 17% below their pre-pandemic baseline, suggesting employers want to hold on to workers, Pollak said.  
    Despite the large monthly decline, job openings are still 25% above their February 2020 level, she added.

    It’s absolutely the best possible outcome. And I think the chances [for it] get higher and higher all the time.

    Julia Pollak
    chief economist at ZipRecruiter

    The ratio of job openings to unemployed workers fell to 1.3 in October, down from a pandemic-era high of 2.0 and near the pre-pandemic level of 1.2.
    “This [JOLTS] report should bring abundant holiday cheer as the probability of a soft landing continues to rise,” Nick Bunker, director of economic research at the Indeed Hiring Lab, wrote Tuesday.
    “The current state of the labor market suggests no further recalibration is necessary to bring [it] back into balance,” he added. “It’s already there.”

    In short: The labor market has cooled while layoffs haven’t spiked and workers still enjoy relatively good job security and prospects, economists said.
    “It’s still a favorable labor market,” Pollak said.
    However, workers have lost leverage relative to 2021 and 2022. Big pay increases aren’t as prevalent, nor are signing bonuses. While there remain ample job opportunities, they are harder to get, Pollak said. Outside of industries such as health care, in which there’s an acute labor shortage, the opportunities “aren’t quite as attractive,” she added.Don’t miss these stories from CNBC PRO: More

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    Wells Fargo CEO warns of severance costs of nearly $1 billion in fourth quarter as layoffs loom

    Wells Fargo CEO Charlie Scharf said low staff turnover means the company would likely book a big severance expense in the fourth quarter.
    “We’re looking at something like $750 million to a little less than a billion dollars of severance in the fourth quarter that we weren’t anticipating,” Scharf told investors.
    That expense is an accrual for worker layoffs that Wells Fargo expects to make next year, according to a spokeswoman for the bank.

    Charlie Scharf, CEO, Wells Fargo, speaks during the Milken Institute Global Conference in Beverly Hills, California on May 2, 2023. speaks during the Milken Institute Global Conference in Beverly Hills, California on May 2, 2023. 
    Patrick T. Fallon | Afp | Getty Images

    Wells Fargo CEO Charlie Scharf said Tuesday that low staff turnover means the company will likely book a large severance expense in the fourth quarter.
    “We’re looking at something like $750 million to a little less than a billion dollars of severance in the fourth quarter that we weren’t anticipating, just because we want to continue to focus on efficiency,” Scharf told investors during a Goldman Sachs conference in New York.

    That expense is an accrual for worker layoffs that Wells Fargo expects to make next year, according to a bank spokeswoman. The company declined to say how many jobs it will cut.
    Wells Fargo needs to get “more aggressive” managing headcount because employee attrition has slowed this year, Scharf added.
    Wall Street leaders including Scharf and Morgan Stanley CEO James Gorman have said that unusually low attrition among their workers has left them bloated. The industry has been cutting jobs in the past year as it deals with rising funding costs, a prolonged slump in Wall Street deals and concern over loan losses.
    Read more: Big banks are quietly cutting thousands of employees, and more layoffs are coming
    Wells Fargo, the fourth-biggest U.S. bank by assets, was already among the most active in laying off workers this year, thanks in part to its retrenchment from the mortgage arena. The bank has cut about 11,300 jobs so far in 2023, or 4.7% of its workforce, and had 227,363 employees as of September.

    Scharf spoke of needing to both get more efficient, while continuing to invest in revenue-generating areas including credit cards and capital markets.
    The bank is “is not even close” to where it should be on efficiency, Scharf said.
    Under previous leadership, employees had fanned out across the country. Now, Scharf wants them near one of the bank’s office hubs. Some workers will be offered paid relocations, while others will only be offered severance. Workers who don’t opt to move may lose their roles, according to a person with knowledge of the situation.
    While his actions point to caution for next year, Scharf said Tuesday that both consumers and businesses were holding up well, and that his base case for next year is “closer to a soft landing” for the U.S. economy.
    Wells Fargo shares fell more than 1% on Tuesday.

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    Who made millions trading the October 7th attacks?

    In the run-up to its attack on Israel on October 7th, Hamas maintained tight operational security. The timing of the assault blindsided Israel’s army and intelligence services, and appears to have surprised even some of Hamas’s political leaders. However, a new working paper by Robert Jackson Jr, a former commissioner of America’s Securities and Exchange Commission, and Joshua Mitts of Columbia University suggests that someone had enough advance knowledge of the plan to make a small fortune profiting from a crash in the Israeli stockmarket.The authors analysed trading patterns in Israeli shares in the weeks before the attack, and found anomalies consistent with a grim form of informed trading. Perhaps the most striking example is a surge in short sales—bets that a security’s price will fall—of a relatively illiquid exchange-traded fund (etf), which is listed on the New York Stock Exchange under the ticker eis, and tracks an index of Israeli share prices.image: The EconomistIn September an average of 1,581 shares per day of EIS (together worth $85,000 or so) were sold short, representing 17% of the daily total trading volume in the ETF. But on October 2nd, five days before the attacks, a whopping 227,820 shares were shorted, accounting for 99% of EIS’s volume that day (see chart). Moreover, rather than reflecting a souring of market sentiment on Israeli equities, the entire increase in activity appears to have come from two transactions: one sale of 50,733 shares just before 3pm, and another for 174,869 shares 35 minutes later. Whoever made these trades could have made a $1m profit within a week, and a further $1m during the following three weeks.Other securities tied to Israeli shares also showed suspicious patterns. During the three weeks before the attacks, the number of outstanding options contracts expiring on October 13th on American-traded shares of Israeli firms—the derivatives that would yield the greatest returns if prices moved sharply in the direction a trader expected, and expire worthless otherwise—rose eightfold. In contrast, the number of longer-dated options on such shares, whose value depended on events beyond mid-October, barely changed.Could there have been another cause? The shorting of airline stocks ahead of the attacks of September 11th may have been prompted by forthcoming earnings announcements. Yet there seems no such alternative in this case, notes Eric Zitzewitz of Dartmouth College. The paper’s authors examined other recent periods of turmoil in Israel, such as that prompted by the government’s attempted judicial reform earlier this year, and did not detect similar behaviour. The only match for the anomalies was in early April—two days before the Jewish holiday of Passover, which according to reporting by Channel 12, an Israeli tv station, was the date originally scheduled for Hamas to launch its attack.The study has prompted an investigation by Israel’s securities authority. Given the secrecy around the attacks, news is unlikely to have leaked to a short-seller on Wall Street. Unless it was dumb luck, whoever placed the trades was probably inside Hamas, or close enough to know its military secrets. In the past two months, America has banned just one trading firm for its ties to Hamas—a crypto exchange in Gaza that was linked to illicit transactions worth a mere $2,000. Somebody has managed to pull off a far bigger coup. Mr Mitts reckons that the trades he and his co-author have detected are “just the tip of the iceberg”. ■ More

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    A 401(k) rollover is ‘the single largest transaction’ many investors make, expert says. What to know before doing it

    A rollover from a 401(k) plan to IRA is common for workers when they retire or change jobs.
    More than 5.6 million people rolled money to an IRA in 2020, according to IRS data.
    There are pros and cons to consider before moving your money.

    D3sign | Moment | Getty Images

    Millions of people move money from a workplace 401(k) plan to an individual retirement account each year.
    Such “rollovers” are common when workers retire or take new jobs at different employers. More than 5.6 million people rolled a combined $618 billion into IRAs in 2020, according to the latest available IRS data.

    A rollover may be “the single largest transaction” many people make in their life, Fred Reish, a retirement expert and partner at law firm Faegre Drinker Biddle & Reath, recently told CNBC.
    But deciding whether a rollover makes sense isn’t always straightforward: There are many factors to consider before moving the money. The Department of Labor recently proposed a regulation to improve the rollover advice investors get from brokers, insurance agents and others.
    More from Personal Finance:Not saving in your 401(k)? Your employer may re-enroll youWhy working longer is a bad retirement planMore employers offering a Roth 401(k)
    Of course, not all savers will have a choice: Some 401(k) plans don’t allow former employees to keep their money in the workplace plan, especially if they have a small balance.
    Here are some key details to weigh when choosing to keep money in your 401(k) or move it to an IRA.

    1. Investment fees

    Investment fees are a big consideration for rollovers, financial advisors said.
    Investment funds held in 401(k) plans are generally less costly than their IRA counterparts.
    That’s largely because IRA investors are “retail” investors while 401(k) savers often get access to more favorable “institutional” pricing. Employers pool workers into one retirement plan and have more buying power; those economies of scale generally yield cheaper annual investment fees.
    Rollovers to an IRA made in 2018 will cost investors an aggregate $45.5 billion over a 25-year period due to higher fund fees, according to an estimate by c.

    Of course, not all 401(k) plans are created equal. Some employers more rigorously oversee their plans than others, and fees are generally cheaper for retirement plans sponsored by large companies rather than small businesses.
    “Are you able to pay less by staying in your 401(k) plan?” said Ellen Lander, founder of Renaissance Benefit Advisors Group. “The larger the plan, the more resounding that ‘yes’ will be.”
    The bottom line: Compare annual 401(k) fees — like investment “expense ratios” and administrative costs — to those of an IRA.

    2. Investment options

    Savers may benefit from leaving money in a 401(k) if they’re happy with their investments.
    Certain investments — like guaranteed funds or stable value funds, which are kind of like high-earning cash or money market funds — aren’t available in IRAs, Lander said.
    But 401(k) options are limited to those selected by your employer. With an IRA, the menu is often much broader.
    “You’ll want to look at whether your 401(k) is a good plan with diverse, low-cost investment choices and fees,” said Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida. She is also a member of CNBC’s FA Council. “If it isn’t a good plan, we encourage rolling it into a new 401(k) or IRA.”

    Certain retirement investments like annuities, physical real estate or private company stock are generally unavailable to 401(k) savers, said Ted Jenkin, a certified financial planner based in Atlanta and founder of oXYGen Financial.
    Another consideration: While the investment options may be fewer in a 401(k), employers have a legal obligation — known as a “fiduciary” duty — to curate and continually monitor a list of funds that’s best suited to their workers.
    Unless you’re working with a financial advisor who acts as a fiduciary and helps vet your investments, you may not be putting money into an IRA fund best suited for you. Too many choices in an IRA may also lead to choice paralysis and adverse decision-making, advisors said.

    3. Convenience

    Sturti | E+ | Getty Images

    Having multiple 401(k) accounts scattered among multiple employers may be a challenge to manage, said Jenkin, a member of CNBC’s FA Council. And your current employer may not accept rollovers into your 401(k) from a previous employer’s plan.
    Aggregating assets in one IRA may simplify management of your nest egg relative to factors like asset allocation, fund choice, account beneficiaries and annual required minimum distributions, he said.
    “If you’re babysitting three kids in three different backyards, it would be tough to keep your eye on all three,” Jenkin said. “By getting them in one, it’s a lot easier to watch them all.”

    4. Creditor protection

    Investors generally get stronger creditor protections in a 401(k) than an IRA, courtesy of federal law, advisors said.
    Your 401(k) money would generally be protected from seizure in the event of bankruptcy or if you faced a civil suit from someone who, for example, fell and got injured in your home, Lander said.
    IRA assets may not be protected, depending on the strength of state laws.
    Exceptions to 401(k) protection may occur during divorce proceedings or for taxpayers who owe a debt to the IRS, Lander said.

    5. Flexibility

    IRAs generally offer investors control over the amount and frequency of their withdrawals. Many 401(k) plans may not allow retirees as much flexibility.
    For example, just 61% of 401(k) plans allowed periodic or partial withdrawals by retirees in 2022, and 55% allowed installment payments, according to the Plan Sponsor Council of America, a trade group.

    If this is the case, Lander advises workers to ask their employer’s human resources department about the policy and whether it can be amended.
    “That’s a quick fix,” she said.  

    6. Company stock

    Workers who own company stock in their 401(k) can get a tax benefit for keeping those holdings in-plan rather than rolling them to an IRA, Jenkin said.
    The tax move is known as “net unrealized appreciation.” Basically, by keeping stock in your 401(k), you’d ultimately pay preferential, capital gains tax rates on any investment growth (rather than ordinary income tax rates) withdrawn in retirement. This tactic isn’t an option if you roll the money into an IRA.
    “That’s a big advantage for people who believe in their company stock and leave it in for a long period of time,” Jenkin said.

    7. Loans

    There’s sometimes an ability for 401(k) savers who part from an employer to keep taking loans from the 401(k) account they left behind, advisors said. You can’t borrow money or take a loan from an IRA.
    The 401(k) provision is generally rare: About 1% of plans allow people to take new loans after separation from service, according to PSCA data.
    However, investors who have access to that provision and find themselves in a financial pinch can take a 401(k) loan; assuming they follow the repayment rules, such people would pay themselves back with interest and wouldn’t suffer adverse tax consequences, Lander said.
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