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All Vanguard or Vanguard AND Fidelity?
Old 06-18-2011, 10:08 AM   #1
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All Vanguard or Vanguard AND Fidelity?

Now that DH has retired, we have access to a defined contribution plan that can be rolled over. That balance represents about 35% of our retirement savings. We have about 45% of retirement savings with Vanguard. The rest is in traditional IRA's (10%); and banks and smaller amounts in mutual funds which we will access prior to 59 1/2. (Pension and mostly equal amounts of social security will also fund retirement)

For simplicity, we would prefer to rollover his funds to Vanguard. But my mind says diversification, and therefore thinks it might be better to put his in Fidelity. I know both are solid--but what do the rest of you do with your holdings and/or what would you advise?
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Old 06-18-2011, 10:35 AM   #2
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My opinion placing all or most of your nest egg with Vanguard is it is largely a matter of personal preference and convenience, not a diversification concern.

Here are a couple of other discussions:

Putting all your equity eggs in Vangard
Vanguard for Everything?

Note that Vanguard is structured so that the individual funds own Vanguard, not the other way around:

Quote:
Originally Posted by FD View Post
Vanguard is owned by its funds, and the funds are themselves owned by the people who invest in them. So, each Vanguard fund is a separate entity and even if one were to get in trouble, the other funds should be fine (although funds of funds could still be impacted).
Vanguard touts this arrangement on their website as "Vanguarding", something supposedly unique in the investment world.

With the exception of a few stragglers I've been too lazy to move, all my investments are with Vanguard.
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Old 06-18-2011, 10:39 AM   #3
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My 401(k) is with Fidelity. We have some stuff at Vanguard. But we prefer to use ETFs without commission at WellsFargo and TDAmeritrade. In other words, we diversify across many financial institutions.

I don't buy the idea of simplicity in one vendor because most of my accounts are "set-and-forget" where I do not need to rebalance or make any trades at all. Instead, I use one vendor for all the trades. The other vendors are just kept in the background. Besides, everthing looks the same if you use the same web browser to access all your accounts anyways.

Mutliple vendors lets you avoid restrictions such as "cannot buy back into a fund after selling for 60 or 90 days" as well. You just do the deed at another vendor.

With all our financial institutions, we are using very low expense ratio index funds in the 0.07% to 0.22% range.
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Old 06-18-2011, 11:07 AM   #4
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I use both. Fido has an office near me and it has been useful to have a face to face occasionally on more complicated moves like rollovers.
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Old 06-18-2011, 11:30 AM   #5
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We have about 2/3 at Vanguard (IRA). The other third is in 401ks at Fidelity.
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Old 06-18-2011, 01:54 PM   #6
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I don't see that splitting up your stash between Fido and VG gives you any more protection or diversity. They invest in the same companies, after all. I have no problem with sleeping now that I'm 100% in VG. Pick the one that works best for you and go 100%.
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Old 06-18-2011, 02:06 PM   #7
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I would put it all in Vanguard.

Other than my TSP, all of mine is at Vanguard. I do worry sometimes about what would happen if someone got my password to Vanguard.
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Old 06-18-2011, 02:33 PM   #8
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We have our money spread across several financial service companies partly because of 401ks and qualified accounts. They provide access to some investments (stable value funds) that are not normally available through mutual funds.

I would be reluctant to put all (or most) of our investment assets under the control of one company. If I consider all of our assets, I do not think I would put more than 1/3 under the control of any one organization.

While I think the chances of something really bad happening (at one of the very large mutual fund companies) is low.... If something did happen, we might be in trouble everything wound up in jeopardy, or even a major portion of it.... for that matter, even if our money was tied up for an extended period of time because of some sort of legal problem.

While managing the money at multiple companies is a bit of a hassle, I will probably continue to do it as a precaution.
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Old 06-18-2011, 02:39 PM   #9
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I moved my Fidelity holdings (401K) to Vanguard when I retired. I did it for convenience. It's easier for me to keep track when it's all in one place.
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Old 06-18-2011, 02:47 PM   #10
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Our funds are split between VGD and Fido, but only because Vanguard didn't offer Solo 401Ks when I needed one (now they do). I intend to consolidate everything at Vanguard when I get around to it.

I bank with USAA. I might open a small bank account at a local bank or CU. It's sometimes handy to have an account at a real physical bank (to get a signature guarantee, cash in paper savings bonds, get coin change for a garage sale, rent a safe deposit box, get a cashier's check, etc).
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Old 06-18-2011, 02:54 PM   #11
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Have tax deferred accounts with Fido and after tax accounts with VG.

I would not have a problem with having all my eggs with either of them.
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Old 06-18-2011, 02:58 PM   #12
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I've never dealt with Fideleity, so I cannot give an opinion.

After years of fixing my beginner's mistake of dealing with individual MF companies and opening way too many fund accounts , I have all of my portfolio investments and Roth IRA accounts with Vanguard. I have 1 non-VG fund left over in my Roth brokerage account. I'll deal with that when I turn 59 1/2.
It is simple to keep track of everything under 1 roof, with extremely good service, and no problems whatsoever.
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Old 06-18-2011, 03:09 PM   #13
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Fidelity guy here and completely happy with their service. But if your pro VG, I would just roll everything there. Having it all under one roof is convenient.
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Old 06-18-2011, 07:59 PM   #14
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I'd make sure you have some funds accessible from somewhere besides Vanguard. You never know when their computer system may go down for a week, not that it ever has.

There will be some differences in the available funds, with and without transaction fees, and minimum balances. I like the commission-free ETF's at Fidelity, and holding mutual funds and ETF's/stocks in the same account. I can also trade specific shares of mutual funds, which can help taxes.
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Old 06-18-2011, 09:41 PM   #15
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My Megacorp's 401K was with Fidelity. When I retired, Fidelity and Megacorp greased the skids to roll my lump sum pension into Fidelity. They would handle everything with blinding electronic speed. Instead I opted to do a rollover IRA to Vanguard. DW and I already had Roth IRA's and an after tax joint account at Vanguard. So, even though I pre-arranged the lump sum pension rollover to Vanguard, Megacorp mailed me a paper check via USPS which I had to forward to Vanguard. I also mailed my severance check to our Vanguard joint after tax account. Back then (2007) the Vanguard MM account was paying a worthwhile return.

I rolled over my 401K to an IRA which remains at Fidelity. Our retirement accounts are now about 50-50 Fidelity-Vanguard. The fact is I compare Fidelity and Vanguard often and, so far, I am happy with this arrangement.
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Old 06-19-2011, 07:41 AM   #16
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Quote:
Originally Posted by W2R View Post
Other than my TSP, all of mine is at Vanguard. I do worry sometimes about what would happen if someone got my password to Vanguard.
Exactly, does anybody know what would happen if your account was drained and how long it would take to get your money back if you could. At the very least, I would keep enough cash in the local bank for 6 months expenses, just in case...
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Old 06-19-2011, 07:51 AM   #17
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Before I retired, my 401K was in Fidelity. When I retired, I moved it all into my Vanguard IRA. Nothing against Fidelity, but I like the simplicity of one place. I trust that the odds are that Vanguard will be around longer than I will, so I'm comfortable with my choice.
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Old 06-19-2011, 07:54 AM   #18
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Quote:
Originally Posted by freebird5825 View Post
I've never dealt with Fideleity, so I cannot give an opinion.

After years of fixing my beginner's mistake of dealing with individual MF companies and opening way too many fund accounts , I have all of my portfolio investments and Roth IRA accounts with Vanguard. I have 1 non-VG fund left over in my Roth brokerage account. I'll deal with that when I turn 59 1/2.
It is simple to keep track of everything under 1 roof, with extremely good service, and no problems whatsoever.

Ah..brings back memories. Been there, done that too early on about opening way too many fund accounts .
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Old 06-19-2011, 08:06 AM   #19
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I'm retired (DW will soon be). We have a current ratio of around 60% FIDO 40% VG.

There are a lot of reasons why we stay with FIDO, and I won't debate anything on cost alone (which is what VG advertises). If you feel you need to be exclusively with them (or FIDO) so be it; it's your decision.

However, our combined slice/dice retirement portfolio, along with a cost of around .45 (combined for both companies), in addition to the superior tools (IMHO) of FIDO over VG keep us there.

We're Private Client with FIDO, Flagship status with VG. I guess you can say that we've "voted with our money" (although we've found that either company's "preimum service" is really of little value in our specific situation since we don't need "hand holding"), and we are not frequent traders so the free trades we could make don't make any financial sense, in our situation.

Also, since I withdraw monthly to fund my retirement expenses, from FIDO (and transfer from VG, to "restock" our retirement income cash buckets, held on the FIDO side), I'm more familiar with their monthly withdrawl tools (where taxes are paid, and my personal checking/savings accounts are updated). Why learn two different "systems" on the withdrawl side (something else, you will learn when you are retired).

Like our investments, our selected investment companies are "diversified". Why does it need to be all or nothing?

BTW, we also hold an SPIA through FIDO based upon our contract requirements and return rates based upon the decision, back in 2007. They met our "needs", along with offering the best monthly payment at the time over other companies (including VG).

I/DW like having "options". Having more than one company suits our specific need/desire. If you feel differently? So be it...

Just our story...
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Old 06-19-2011, 11:53 AM   #20
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I'm about 50/50. I don't know how much risk there is in not diversifiying, but it's really no big deal from a simplicity standpoint to deal with two sets of statements and a little extra work at tax time. I like vangards index fund selection, but fidelity also has some low fee index funds.

I've actually had much better customer service from Fidelity and plan to eventually most all my 401k with them and much of my personal accounts with vangard.
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