Considering throwing in the towel and going with a CFP

[MRG]

..snip..
I didn't know it was that simple. When I met with the Fidelity rep he mentioned a department called Fidelity Advisor Financial Services Fund with a fee of 1.2%.

I use Fidelity for all but my existing 401k. Never use their Advisor Financial Services offering. High fees for expensive managed funds that frankly don't perform too well.

I reviewed a plan for myself and my sister both were garbage! Don't get me wrong Fidelity has some great funds both managed and index, the Advisor Financial Services didn't use any of them.

 

[bingybear]

Fidelity has transfers to funds in other companies divided into fee or no fee categories:

• No Transaction Fee (NTF) funds
• Transaction Fee (TF) funds

So when I buy Vanguard REIT for example I am charged $75. I forget if it is per transaction or per $1000, will check, but there is a fee for certain funds.

I just took a quick look on the fido site and used a vanguard fund. It has a $75 fee for purchase. If I read the foot note correctly, it has no fee to sell. There are other TF funds that cost less then $50 to purchase. This has nothing to do with transferring to another brokerage.

I have heard that fidelity does have a fee when transferring an IRA to another brokerages... I think $50, but I have not checked.

I'm sure you can get help setting up an allocation from Schwab, Fidelity or Vanguard for free. This is especially true for $1MM in assets. They may charge more for ongoing advice.

If you have all you assets in Vanguard products, why not more to Vanguard. If you like Fidelity, why not use them and look for NTF funds there. You can always pay a TF for a specific fund. If you hold it for a long time and you put a decent $ in it, the TF becomes minimal as a percentage.

Since you have a fidelity account, do you live near a fidelity office? If so, set an appointment and find out what they offer as far as advice, both free or for a price. I've received free advice from them. For me they advised both fidelity and non-fidelity NTF funds. And at times they advised non-fidelity TF funds. The same with ETFs.
Whatever you do, do your own due diligence. In the end... it is your money.

 

[bingybear]

I use Fidelity for all but my existing 401k. Never use their Advisor Financial Services offering. High fees for expensive managed funds that frankly don't perform too well.

I reviewed a plan for myself and my sister both were garbage! Don't get me wrong Fidelity has some great funds both managed and index, the Advisor Financial Services didn't use any of them.

I agree. I got some good suggesting using the free consultations.

 

[Which Roger]

It just seems to me, when I visit this board, that most of you regular posters are on the Expert level, so what seems a no-brainer to you is hard for folks that don't actively monitor their portfolio and trade, plus suck at math.

It can seem intimidating, since the average poster on this forum knows more about investing than 99% of the general public. On top of that, as you noted, a lot of us think that this stuff is actually fun! So what's "normal" on this forum is far from normal in the real world.

That being said, most of the DIY investors advocate a simple "set it and forget it and tune out the noise" investing approach. Once you set things up, you can pretty much ignore your investments, even go months at a time without looking at them.

 

[thefinancebuff]

I just took a quick look on the fido site and used a vanguard fund. It has a $75 fee for purchase. If I read the foot note correctly, it has no fee to sell.

Exactly. Worst case you pay $75 one-time to put everything into Wellesley and that's the end of it. Dividend reinvestment is free. Selling is free.

 

[mrfeh]

my 1st impression is that you left some info out of your post.
You're gonna pay 15k a year to get 30k income?

^^^^ this

 

[Texas Proud]

Thanks bestwifeever. I just spoke with Fidelity, Wellington is closed, Wellesley is open. There is a $75 fee to transfer funds per transaction. Seems Fidelity has similar funds that can be set for quarterly payout checks with a year end dividend check, called Asset Manager and you pick which AA you prefer, so I will look into that, although Wellesley has a great reputation.

I didn't know it was that simple. When I met with the Fidelity rep he mentioned a department called Fidelity Advisor Financial Services Fund with a fee of 1.2%.

No, they have a $75 fee for you to purchase a Vanguard fund and keep the money at Fidelity.... it is not the same as transferring the money...


Think of the Vanguard fund as a stock.... you use your Fidelity account to buy the stock (Vanguard fund).... your Fidelity account shows you have an investment in that stock.... if you called Vanguard, they have no record of your investment..... no money was transferred to Vanguard...

If you want to transfer money to Vanguard, you would get in touch with them... open and account... ask Fidelity to liquidate some or all of your money.... have them send either your or Vanguard a check.... deposit that into Vanguard and buy a fund at Vanguard.... Fidelity no longer has that money on their account stmt.... if you call Vanguard, they know who you are.... you can move the money around in Vanguard without a $75 fee....


There is a big difference in the two methods...

 

[Texas Proud]

Thanks bestwifeever. I just spoke with Fidelity, Wellington is closed, Wellesley is open. There is a $75 fee to transfer funds per transaction. Seems Fidelity has similar funds that can be set for quarterly payout checks with a year end dividend check, called Asset Manager and you pick which AA you prefer, so I will look into that, although Wellesley has a great reputation.

I didn't know it was that simple. When I met with the Fidelity rep he mentioned a department called Fidelity Advisor Financial Services Fund with a fee of 1.2%.

That fee is also too high...

I know that Fidelity has FA for free.... there was a co-worker who used to talk about hers all the time.... they even gave advice for funds that were not at Fidelity if they were in an account that could not be moved there such as a 401(k).... again FOR FREE....



Now, if your really think you need to pay someone to do the same job... I would go with Vanguard.... they only charge .3%.... not sure if this is free when you get to $1 mill.... but I know some things are....


https://investor.vanguard.com/financial-advisor/financial-advice

 

[FUEGO]

Check out Vanguard before you do anything. With your asset level, you can get a free/cheap meeting with a CFP to do some serious planning, and some major handholding for free.

+1 what Texas Proud said. If you still need personalized service from a CFP, they now offer advisory services for only 0.30% per year ($3,000 for them to get you $30,000 per year plus the underlying 0.1-0.15% fees on the funds they would have you in (which you'll pay almost everywhere).

 

[kcowan]

@Cheesehead
You already know how much you need - $30K/year. With your $1M portfolio, that's 1% less than the oft-used 4% SWR. I don't think there's much point in having a CFP to set up your withdrawals. By end of year, look at your portfolio. Portfolio returns are good? Give yourself a "raise". The portfolio did badly? Maybe keep withdrawals the same or take a 5-10% haircut.

Or do what I do and "bank" any excess earnings to spend on a rainy day if the fund underperforms. Watch that "excess" account grow and consider how much you are saving by not spending $15k.

 

[hnzw_rui]

The $75 transaction fee for Vanguard funds was kinda bugging me so I checked the Fidelity Puritan FPURX fund that has been suggested as well as other no transaction fee balanced funds. Also, I can't seem to find where it says you only pay when you buy and it's free to sell.

FPURX expense ratio is 0.56%. Meanwhile, Wellesley Investor Shares (VWINX) is just 0.25% (can you get Vanguard admiral shares at Fidelity?). With a $1M portfolio, that's $5,600 fund expense for the Puritan fund versus just $2,500 for Wellesley. Even if you have 12 transaction fees a year (e.g. for 12 monthly "pension direct deposit" withdrawals), that's still just $900 for $3,400 total expense so you still come out ahead with the Vanguard fund.

Also, fund turnover for Puritan is 110%! You better not have that in a taxable account or the taxes might just kill you.

 

[travelover]

.......
This CFP takes a holistic approach, basically manages the total financial part of your life with estate planning, taxes, insurance such as LTC, etc. ..........

P.T. Barnum was right.

 

[Ian S]

The $75 transaction fee for Vanguard funds was kinda bugging me so I checked the Fidelity Puritan FPURX fund that has been suggested as well as other no transaction fee balanced funds. Also, I can't seem to find where it says you only pay when you buy and it's free to sell.

FPURX expense ratio is 0.56%. Meanwhile, Wellesley Investor Shares (VWINX) is just 0.25% (can you get Vanguard admiral shares at Fidelity?). With a $1M portfolio, that's $5,600 fund expense for the Puritan fund versus just $2,500 for Wellesley. Even if you have 12 transaction fees a year (e.g. for 12 monthly "pension direct deposit" withdrawals), that's still just $900 for $3,400 total expense so you still come out ahead with the Vanguard fund.

Also, fund turnover for Puritan is 110%! You better not have that in a taxable account or the taxes might just kill you.

A couple of points here. First, selecting a fund based solely on expense ratio is not necessarily the wisest choice especially when it comes to actively managed stock funds. If you're really hung up on expense ratios, an index fund(s) might be a better choice since it offers the lowest expenses and the lowest turnover. Get a broad stock index fund and a broad bond index fund and choose the ratio based on your comfort level.

Second, IMHO, there's a definite advantage to having a local bricks and mortar presence especially for those who appreciate a little hand-holding at times. I think all of the big names also offer some amount of free personal financial planning for accounts in the seven figures such as the O.P. appears to have. I prefer face to face meetings for that sort of thing but YMMV.

 

[Sunset]

OP - you have confused yourself.

You need to change brokerages, not change which fund you own at the same old brokerage, its like moving your money to a new bank.

You need to transfer your account or part of it "IN KIND" to vanguard.com
You do that by phoning up vanguard.com and tell them you want to open an account and transfer your assets "IN KIND".
They will do all the work, Fidelity might phone you to confirm its true in a few days.
Then you can buy/sell Wellington etc funds for free at vanguard.
And you can set up a withdrawal amount as others have said.

 

[hnzw_rui]

A couple of points here. First, selecting a fund based solely on expense ratio is not necessarily the wisest choice especially when it comes to actively managed stock funds. If you're really hung up on expense ratios, an index fund(s) might be a better choice since it offers the lowest expenses and the lowest turnover. Get a broad stock index fund and a broad bond index fund and choose the ratio based on your comfort level.

Second, IMHO, there's a definite advantage to having a local bricks and mortar presence especially for those who appreciate a little hand-holding at times. I think all of the big names also offer some amount of free personal financial planning for accounts in the seven figures such as the O.P. appears to have. I prefer face to face meetings for that sort of thing but YMMV.

Note, I didn't tell the OP to move the money to Vanguard in the last post since it's clear the OP may want more hand-holding. I was investigating the costs of using Vanguard funds with transaction fees at Fidelity brokerage versus just using a no-transaction fee Fidelity fund. I do realize there's value in having local brick and mortar branches where you can have face-to-face meetings.

As for performance, I actually backtested Puritan vs Wellington vs Wellesley first using Portfolio Visualizer ($900K starting portfolio, fixed withdrawals of $3000/mo for 4% SWR). I'm not really seeing the Puritan fund consistently doing better than Wellington or Wellesley. In fact, Wellington has it beat in all the time horizons I tried. Puritan did better than Wellesley long-term (kinda expected given Puritan is more stock heavy). The Wellesley, however, made for a much smoother ride.

 

[jazz4cash]

OP - you have confused yourself.

You need to change brokerages, not change which fund you own at the same old brokerage, its like moving your money to a new bank.

You need to transfer your account or part of it "IN KIND" to vanguard.com
You do that by phoning up vanguard.com and tell them you want to open an account and transfer your assets "IN KIND".
They will do all the work, Fidelity might phone you to confirm its true in a few days.
Then you can buy/sell Wellington etc funds for free at vanguard.
And you can set up a withdrawal amount as others have said.

I don't agree with this at all...at least not until OP is certain that Fido cannot satisfy his needs. At this point it looks like Fido may be able to do this.
No need to rush into anything, and I favor Vanguard but Fido has done an excellent job with my workplace savings and they do have plenty of investor centers in my area. Also, since these are 401k funds, I do not believe the "IN KIND" transfer would apply.

 

[rbmrtn]

The $75 transaction fee for Vanguard funds was kinda bugging me so I checked the Fidelity Puritan FPURX fund that has been suggested as well as other no transaction fee balanced funds. Also, I can't seem to find where it says you only pay when you buy and it's free to sell.

It's in their fee schedule here, https://www.fidelity.com/bin-public...uments/Brokerage_Commissions_Fee_Schedule.pdf

 

[FANOFJESUS]

I think the wellington is open if you buy it at vanguard.

 

[Bestwifeever]

OP - you have confused yourself.

You need to change brokerages, not change which fund you own at the same old brokerage, its like moving your money to a new bank.

You need to transfer your account or part of it "IN KIND" to vanguard.com
You do that by phoning up vanguard.com and tell them you want to open an account and transfer your assets "IN KIND".
They will do all the work, Fidelity might phone you to confirm its true in a few days.
Then you can buy/sell Wellington etc funds for free at vanguard.
And you can set up a withdrawal amount as others have said.

This is exactly what we did when DH rolled his 401k over into an IRA--called Vanguard and they took care of it. DH rolled the entire amount to Vanguard but you can just do part of it. And one of my two rebalancing moves was a few months ago to Wellington Admiral so I agree that it apparently is open to Vanguard accounts. Not that Vanguard or its funds are necessarily better or worse than Fidelity etc., they just work simply and nicely for us. We pay no fees beyond what the funds themselves carry.

 

[Cheesehead]

The Expense Ratio difference between Wellesley and a similar fund at Fidelity such as the Asset Manager 40 is a quarter of one percent, so for $1 mil that would be a savings of $2500 a year.

What I am starting to understand is that it would be better to transfer my 401K and IRA to Vanguard? I do like the brick and mortar aspect of Fidelity, we have a local office and the free FA person is great. But as I look into it I would like to also have access to Wellington and make sure I can get monthly or quarterly checks from Vanguard without it passing through, or being charged by Fidelity.

Thanks all for your advice!

 

[braumeister]

What I am starting to understand is that it would be better to transfer my 401K and IRA to Vanguard? I do like the brick and mortar aspect of Fidelity, we have a local office and the free FA person is great. But as I look into it I would like to also have access to Wellington and make sure I can get monthly or quarterly checks from Vanguard without it passing through, or being charged by Fidelity.

It doesn't have to be all or nothing. Transfer whatever you like to Vanguard and use their funds and services. But also keep whatever you like at Fidelity and take advantage of their local building and people.

 

[Another Reader]

First, there may be a transfer fee for each account you transfer, not for each $1,000.

Second, there are many low cost options at Fidelity that are competitive with Vanguard. I find the customer service at Fidelity to be far superior. If you want to buy Vanguard Wellington, you can do it through Fidelity, although there would be a one-time fee of $75 for the one purchase.

For estate planning, you are far better off with a qualified estate planning attorney than a financial planner. Fidelity offers some estate planning assistance, but the planning is too important not to use the most competent professional available, in my view.

I would never use a CFP to run my money. I tried that route once, got generic planning advice, mediocre investments, and high fees. Haven't looked back since I fired the guy.

 

[dand76]

OP - if interested, here is the link to setting up automatic withdrawals at Fidelity:
https://www.fidelity.com/cash-management/automatic-withdrawals


and a link to their target date funds
https://www.fidelity.com/mutual-funds/fidelity-fund-portfolios/freedom-funds


You should have an advisor assigned to your account that will assist with a lot of things as no cost.

 

[Walt34]

Yet another Vanguard suggestion:

https://personal.vanguard.com/us/funds/snapshot?FundId=1498&FundIntExt=INT

The managed payout fund has a fee of 0.42% which for them I think is a bit high (maybe I'm spoiled by the index fund fees) but it is a set-it-and-forget-it solution.

Quite a bit better than 1.5%.

 

[NanoSour]

To the OP, you are about to venture in to what is really a set it and forget it adventure. Think about this, you finished high school, maybe college, worked an entire life, AND saved $1M to boot. Setting up your distribution of these assets is a piece of cake compared to what you've already accomplished in life.

I'm wondering if you forgot to take your medication…. JK