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Portfolio Management firms - consolidate or diversify
Old 02-14-2018, 04:22 PM   #1
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Portfolio Management firms - consolidate or diversify

We currently have the bulk of our money in Fidelity, Vanguard, Merrill Lynch and a couple of others, in the form of after tax investments, IRA's and 401k's. After retirement, does it makes sense to consolidate to one firm, either Fidelity or Vanguard, or both? My personal thought is to consolidate down to Fidelity (all rollover money from our 401k's) and Vanguard (all of our "after tax" investments).

But the ability to have it all in one firm, say Fidelity, so as to have one place to manage (for instance, to make sure we aren't buying the same stuff in two different places) might make more sense.

Collective thoughts?
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Old 02-14-2018, 05:51 PM   #2
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Consolidate. Either Fidelity or Vanguard. If you want to buy other mutual funds do it through one brokerage house. Most will only charge small fee or nothing depending on your assets. Plus if you want to download information makes sense to have only one brokerage house. A lot easier.
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Old 02-14-2018, 05:59 PM   #3
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Consolidate. Either Fidelity or Vanguard. If you want to buy other mutual funds do it through one brokerage house. Most will only charge small fee or nothing depending on your assets. Plus if you want to download information makes sense to have only one brokerage house. A lot easier.
+1

Pick based on your future needs, like new/different funds and/or services you will use, as your current holdings can bet transferred in-kind without tax implications.
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Old 02-14-2018, 06:29 PM   #4
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I will always use at least two providers with different systems' of record. This is based on how a provider might choose to do disaster recovery. Been there done that! (It was part of my career)

I expect long periods of outage if a major datacenter is physically destroyed(okay after the folks I worked with retired, who's going to fix it?). That means two, or more, different accounts directly with the providers.

Today that requirement is met with Fidelity and Vanguard, I could substitute Schwab.

There's no use to over do it. If you play elsewhere you might end up in the same datacenter with funds arguing over who gets fixed first.
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Old 02-14-2018, 06:47 PM   #5
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I expect long periods of outage if a major datacenter is physically destroyed.
Most of these datacenters have their own backups in remote locations.
At least every one I worked with did.

Disaster recovery is a big deal with these institutions. I can tell you from personal experience that they spend a lot of time and money specifically to avoid "long periods of outage". Most have Active-Active systems. If one went down, you may not even notice the difference.

If you feel you need to do your own sort of "disaster recovery planning" on behalf of the institution, you have probably chosen the wrong one.
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Old 02-14-2018, 06:59 PM   #6
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I have both Fidelity and Vanguard. I wouldn't have a problem only having one but since I ended up with two I don't see any rush to consolidate. I use mostly Vanguard but I do like the free bill pay service that Fidelity offers.
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Old 02-14-2018, 11:00 PM   #7
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Most of these datacenters have their own backups in remote locations.
At least every one I worked with did.

Disaster recovery is a big deal with these institutions. I can tell you from personal experience that they spend a lot of time and money specifically to avoid "long periods of outage". Most have Active-Active systems. If one went down, you may not even notice the difference.

If you feel you need to do your own sort of "disaster recovery planning" on behalf of the institution, you have probably chosen the wrong one.
I did this for a living. I know where many dead dogs are buried.

Been there when active-> active failed and nobody could put humpty dumpty back together again.

Do what's right for you.
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Old 02-15-2018, 05:49 AM   #8
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After RE I consolidated to Fidelity and Megacorp's 401K manager (ML).
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Old 02-15-2018, 05:52 AM   #9
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But the ability to have it all in one firm, say Fidelity, so as to have one place to manage (for instance, to make sure we aren't buying the same stuff in two different places) might make more sense.
Sure
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Old 02-15-2018, 07:27 AM   #10
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We are currently about half at Vanguard in VG index funds and about half at DW's 401K manager (Mas Mutual) where many of the funds are VG indexes. Is there any outage advantage to such a split? I assume Mass Mutual would be unable to resolve any VG index sales/exchanges during a prolonged outage at VG.
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Old 02-15-2018, 07:57 AM   #11
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OK, well for the short term, I will consolidate all the 401k rollovers to Fidelity and leave the VG stuff as is.

Since when I retire, part of my new "job" will be to manage the portfolio, I should have plenty of time to scrub that baby....
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Old 02-15-2018, 07:42 PM   #12
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This is timely. DW and I have been interviewing Fidelity and Schwab to consolidate various brokerage and retirement accounts. We initially went with Fidelity, but found out after a 2 hour meeting that Fidelity refuses to accept lots of Vanguard funds (& American too). We would have to take a nearly $100k LTCG hit this year in moving to Fidelity. Our top two crown jewels are VG Admiral and American Europacific. Only if we agreed to sign up for private client services would they agree to take it, but then said we had to liquidate in the next year or two. That was a non-starter for us. Schwab on the hand had no such stupid rule. We cannot buy more Admiral but they won't force us to sell or sign up for their private client service.
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Old 02-15-2018, 07:56 PM   #13
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Originally Posted by tominboise View Post
We currently have the bulk of our money in Fidelity, Vanguard, Merrill Lynch and a couple of others, in the form of after tax investments, IRA's and 401k's. After retirement, does it makes sense to consolidate to one firm, either Fidelity or Vanguard, or both? My personal thought is to consolidate down to Fidelity (all rollover money from our 401k's) and Vanguard (all of our "after tax" investments).

But the ability to have it all in one firm, say Fidelity, so as to have one place to manage (for instance, to make sure we aren't buying the same stuff in two different places) might make more sense.

Collective thoughts?


I also am in a semi-similar situation (Although not retiring yet) Or at least Iím thinking about using multiple brokerages or consolidating into one. I currently have my cash at Citibank, after tax brokerage at Morgan Stanley and 401k with Nationwide.

Iím even thinking of opening another account at Fidelity. Iíve thought about consolidating but itís so easy these days with everything to see each account and manage them all together online. Part of me thinks itís good to have diversity with Finanical firms for different investment options.

Interested to hear and get feedback from the board though.
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Old 02-15-2018, 08:18 PM   #14
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Fidelity, Schwab, Vanguard: I'd pick two out of the three.

Maybe Fidelity or Schwab have a bricks and mortar near-by. So, if that's important to you...

But not just one firm because stuff like this comes up that you don't think about until you face the situation: For example, all three firms offer money market funds, and the mm funds pay all about the same at the three firms--except that Fidelity's mm funds have high expense ratios that make those funds not so appealing. If you were with two firms, you would have a much more appealing choice for a mm fund and wouldn't be stuck with Fidelity's offerings.
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Old 02-15-2018, 08:37 PM   #15
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Fidelity, Schwab, Vanguard: I'd pick two out of the three.

Maybe Fidelity or Schwab have a bricks and mortar near-by. So, if that's important to you...

But not just one firm because stuff like this comes up that you don't think about until you face the situation: For example, all three firms offer money market funds, and the mm funds pay all about the same at the three firms--except that Fidelity's mm funds have high expense ratios that make those funds not so appealing. If you were with two firms, you would have a much more appealing choice for a mm fund and wouldn't be stuck with Fidelity's offerings.
If all three MM funds are paying the same, then the Fidelityís higher expense ratio doesnít matter. The stated yield is net of expense ratio. Is it just on the principle of higher ER?

I usually find that the higher expense ratio means the fund is yielding less. So Iím not so sure about your statement that they are paying about the same.
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Old 02-15-2018, 09:10 PM   #16
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We're going to consolidate all of our tax deferred accounts into Fidelity and leave our after tax accounts at Schwab. It's not 100% clean since we signed up for the Fidelity credit card but generally, that's the way we're going. In that situation, Fidelity will hold about 80% of our total portfolio. Fidelity is where I chose to go for advice. I'm not going to pay for a managed account, but at my level, they provide an assigned person to meet with. She has been very helpful. She's also thrown out a couple ideas that I'd heard of, but didn't know how to implement. They can implement for a reasonable fee (less than 1/2 percent). There's no way I'd pay them the 1% full service management fee.
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Old 02-15-2018, 10:41 PM   #17
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I did this for a living. I know where many dead dogs are buried.

Been there when active-> active failed and nobody could put humpty dumpty back together again.

Do what's right for you.
+1.
Architecting geographically disperse disaster recovery is an "interesting" subject.

Nothing like being on a phone call where a Fed member bank is afraid to go to their DR system during a production outage because they don't trust their ability to successfully go to DR.
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