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Having ALL one's Eggs in one Basket, VG or FIDO?
Old 12-03-2018, 10:42 AM   #1
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Having ALL one's Eggs in one Basket, VG or FIDO?

We are considering re-aligning all our retirement assets to a single institution. We currently have them spread out over 3 Credit Unions and Vanguard. I am considering Consolidating them all to Fidelity, as they also offer banking services.

Obviously it is quite a lot of money and FDIC or NCUA becomes a bit moot until one purchases insurable investments through them.

I was wondering if anyone else does this, or does the smart money supporting spreading it about for security?

Thanks in advance for you comments, opinions and advice as usual
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Old 12-03-2018, 10:51 AM   #2
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Fido would be better, in my mind... local office if needed

we’ve gone with schwab.... again local office, can easily make deposits, etc. account is able to get VG products w/o the costs (due to size, S allows individuals to name certain providers to be low cost if accounts are high enough). we still use separate CU for checking... can easily transfer funds into it if needed

some people prefer some in both Fido and S (or VG), so should something happen to temporarily freeze one account the other isn’t affected
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Old 12-03-2018, 11:00 AM   #3
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I keep most everything at Fido, but have checking and a small cash reserve at the local CU.
Local Fido office is a 90 mile drive. Want something local just in case.
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Old 12-03-2018, 11:04 AM   #4
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We have most assets at Fido, plus one small account at a bank where we also have a line of credit with a zero balance. Fido is local but the bank is walking distance. We use the bank occasionally for their safe deposit box, getting different denominations of cash than the ATM spits out, cashing in change, etc.

Very happy with Fido and see no reason to have different accounts at other brokerages. We own several VG ETF’s in our Fido account.
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Old 12-03-2018, 11:10 AM   #5
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Here everything is at Vanguard other than that pesky 3% PenFed CD and our HSAs which Vanguard doesn't offer and an online savings account at DiscoverBank (though our HSAs were invested in Vanguard funds).

We are currently moving our HSAs to Fido, and when the Penfed CDs mature I may move that money to Fido too. The online savings account was from when traditional brokerage MMs didn't pay squat... now that VMMXX is paying a more respectable yield I could move that online savings account money back to Vanguard... something I am pondering.

In addition to the above we have a local CU account that I use to pay bills but I don't keep much in there.
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Old 12-03-2018, 11:12 AM   #6
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I moved DW's account from UBS to Fido. I was sick and tired of their handling of her accounts. I also moved her out of some funds with high expense ratios to ones with lower ones.
I already had accounts with Fido
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Old 12-03-2018, 11:15 AM   #7
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I got started with Schwab maybe 20 years ago and have seen no reason to change. DW, a former megabank SVP, just moved her IRA from the megabank to Schwab because she was so exasperated with the megabank's poor service. For example, she tried to buy T-bills on the auction and they did not understand, so sold her the bills as principal.

From her public statements, it appears that Abigail Johnson of Fidelity does not understand passive investing. IMO this is a major strike against Fidelity, but overall I think the company is pretty similar to Schwab in its operations.

If you can get face-to-face service from either, I would interview a few reps and pick the house based on the best rep you find.

Re banking, I use the Schwab Bank checking and it is very convenient. We have decided to leave DW's checking at megabank, however, so we will be carrying two different debit cards when we travel. We have had experiences, though not recently, where one of our cards would not work and we were able to use the other as a backup.

I also keep a small checking account with megabank; I can transfer money to it and pick up cash at the local megabank branches. I have no idea how I would go about getting cash directly from Schwab's internet bank.
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Old 12-03-2018, 11:18 AM   #8
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We have everything at VG with the exception of a small amount in a B&M local bank and DW's 401K from work. We'll move over her 401K when she finally retires.

We keep the local bank for paying bills, safe deposit box, notary, medallion signatures, etc. I've also kept $10 in Ally just in case they have some great year end CD offer. The rest of our cash sits in VG Prime Money Market (2.3%).

So, to answer your question a good 95% of our investable assets are in one place at VG. I wish VG had a local office, but I'm not sure what I'd use it for.
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Old 12-03-2018, 11:19 AM   #9
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so we will be carrying two different debit cards when we travel. We have had experiences, though not recently, where one of our cards would not work and we were able to use the other as a backup.
You use debit cards when you travel (or at all)? Wow...you are a brave, BRAVE soul.
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Old 12-03-2018, 11:35 AM   #10
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You use debit cards when you travel (or at all)? Wow...you are a brave, BRAVE soul.
Yeah a little scared myself. Only use debit card for ATM withdrawals.
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Old 12-03-2018, 11:38 AM   #11
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You use debit cards when you travel (or at all)? Wow...you are a brave, BRAVE soul.
Huh? We have always used debit cards to access cash machines when we travel. While it is true that debit cards do not have the statutory protection that credit cards do, it is our experience that the issuers indemnify us to pretty much the same degree that we would have with credit cards. See below.

We do use our credit cards for most purchases when traveling simply because the statements are a good record of what we were charged. We can check that against our slips if there are any questions.

Schwab: "We want you to have the highest level of confidence when you do business with Schwab. So we offer you this simple guarantee: Schwab will cover 100% of any losses in any of your Schwab accounts due to unauthorized activity." I believe that Fido has a similar guarantee.

Megabank: "Your Debit Card comes with Zero Liability protection at no extra cost. You will be reimbursed for promptly reported unauthorized card transactions."
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Old 12-03-2018, 11:42 AM   #12
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Besides the 401k, have all non cash investments at Fidelity. I am very happy with their service. They provide FREE advice when needed and never push products on me. I meet yearly with them, plus any rep can answer the random questions that pop up.
SWR - based on your other postings, you would qualify for the Private Client service at 1mm plus.
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Old 12-03-2018, 11:49 AM   #13
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I wish VG had a local office, but I'm not sure what I'd use it for.
+1 We've been with VG for over 30 years and never needed a local office. We are moving our HSAs, and possibly our PendFed IRA money, to Fido so we'l get to see.
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Old 12-03-2018, 11:58 AM   #14
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I believe in splitting between 2 for investment money for security reasons. Currently we have IRAs at Vanguard and I have my 401(k) at Fidelity. At this time I don't need the money at Fidelity so it is sitting there. When I do want to access any of it I will need to roll all of it over to an IRA. At that point I will probably roll it to a Fidelity IRA although I might end up sending some of it to Vanguard in an IRA.

We do have bank accounts and have a small IRA at our bank although we will probably get rid of that IRA soon. We have a small CD at Penfed that is maturing at the end of January and DH will either take as a distribution or send back to Vanguard.
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Old 12-03-2018, 12:09 PM   #15
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My taxable investments and Roth IRA have always been at Vanguard, and I am very pleased with that arrangement so no reason to move anything.

My TSP is still at the TSP, so in that sense my investments are already split between institutions. I have no intention of rolling it over because I am a big fan of the G Fund.
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Old 12-03-2018, 12:12 PM   #16
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Besides the 401k, have all non cash investments at Fidelity. I am very happy with their service. They provide FREE advice when needed and never push products on me. I meet yearly with them, plus any rep can answer the random questions that pop up.
SWR - based on your other postings, you would qualify for the Private Client service at 1mm plus.
We have everything except DW's 457B and living cash with an On Line Credit Union at the moment in 3+% CDs that are all maturing in December 2018 and February 2019. I want to consolidate to a single brokerage, which is why I started this thread. Then I can see all assets in a single location. Living cash is in VMMXX at VG as it pays the highest and is just transferred to our local Brick & Mortar CU when needed where all the bills are paid.

What I am thinking of is consolidating to Fidelity with all maturing CDs and DW's 427B and leaving working cash in VMMXX for now and of course having the CU for daily expenses.
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Old 12-03-2018, 12:18 PM   #17
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+1 We've been with VG for over 30 years and never needed a local office. We are moving our HSAs, and possibly our PendFed IRA money, to Fido so we'l get to see.
The only reason I can see to move my money from VG to Fido (or Schwab) is once I'm gone it might be better for DW to have an office to visit. She's pretty much "hands off" on everything financial. On the downside, I also worry that some Fidelity advisor might convince her into some AUM fee or put her in high cost funds. I'm not sure the advantage (for her) of being able to go to an office outweighs the risks.
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Old 12-03-2018, 12:23 PM   #18
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Maybe I am paranoid. I would never have all of my money in a single institution. Never. This is coming from someone who spent the last 10 years of their career with large scale financial services clients.

Just a few of the potential reasons:
1) Hacking of account/institution. Even if they make good there can still be substantial wait time until the make good occurs.
2) Dispute with the institution.
3) IRS attaches assets at the institution.
4) Technical issues at the institution. (Yes, I know they have disaster recovery plans - however I have personally seen that they are very reluctant to actually execute those plans).

and many, many other issues that I can't even think of. All I know is that I want multiple choices when it comes to some crisis. I even have multiple stock trading accounts for that same reason.
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Old 12-03-2018, 12:24 PM   #19
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We have everything except DW's 457B and living cash with an On Line Credit Union at the moment in 3+% CDs that are all maturing in December 2018 and February 2019. I want to consolidate to a single brokerage, which is why I started this thread. Then I can see all assets in a single location. Living cash is in VMMXX at VG as it pays the highest and is just transferred to our local Brick & Mortar CU when needed where all the bills are paid.

What I am thinking of is consolidating to Fidelity with all maturing CDs and DW's 427B and leaving working cash in VMMXX for now and of course having the CU for daily expenses.
That makes sense. I have working cash at Ally to transfer into BOA for daily expenses, plus over FDIC limit cash at FZDXX at Fidelity which is as you probably know is still/always below VMMXX.
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Old 12-03-2018, 12:33 PM   #20
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Maybe I am paranoid. I would never have all of my money in a single institution. Never. This is coming from someone who spent the last 10 years of their career with large scale financial services clients.

Just a few of the potential reasons:
1) Hacking of account/institution. Even if they make good there can still be substantial wait time until the make good occurs.
2) Dispute with the institution.
3) IRS attaches assets at the institution.
4) Technical issues at the institution. (Yes, I know they have disaster recovery plans - however I have personally seen that they are very reluctant to actually execute those plans).

and many, many other issues that I can't even think of. All I know is that I want multiple choices when it comes to some crisis. I even have multiple stock trading accounts for that same reason.
+1
I've written before how the state of PA locked my brokerage account after DF's TOD was executed targeting that account. Six long months totally out of my control, while PA reviewed his paperwork so the could collect their 4.5%. I could trade in the account just not withdraw any of the assets.

I spent my career in this industry and have had my share of DR's, not the practice kind. These were real live disasters and I still know where some dead dogs are buried.

I use Fidelity and Vanguard. Both are great choices but I'll keep them separate.


ETA: Don't forget about the market closing for a week after 911. You couldn't get to your brokerage assets then.
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