This thread is getting complicated again. Keep it simple my friend.
1. Open an IRA account at Etrade. You can buy virtually any mutual fund you want for free, from any fund family (fidelity, vanguard, american, troweprice, etc)
2. Submit an account transfer to them. You can request that they liquidate everything and send cash.
3. There are no taxes to pay when transferring from IRA to IRA.
4. The "surrender" fee your broker mentioned usually refer to an Annuity investment. That's way too complicated, and fee'd to holy hell. Ask him what the fee is, and if it is small, pay it and move on before that guy milks any more money from you.
5. Once the money arrives, invest in simple mutual funds to start. The beauty of an IRA is that there are no tax consequences! If you want all equity exposure, put all the money into the S&P 500 first, then as you get more comfortable you can switch some of the money to something else. Even stocks if you're feeling frisky, but do yourself a favor and don't buy any stocks that are less than $10. Trust me. Seriously.
6. So how do I put it into the S&P 500? Use a mutual fund (rather than an ETF) since there are no commissions to buy or sell, and you can set it to automatically reinvest the dividends. If you are investing $10,000 or more, Vanguard 500 Index Fund Admiral Shares (VFIAX) is the best one, only charges 0.05% per year. If you are investing less, then Vanguard 500 Index Fund Investor Shares (VFINX) charges 0.17% and has a $3,000 minimum.
7. Don't get bogged down with much of the other nonsense in this thread.