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Rollover IRA - Please Advise
Old 02-19-2015, 04:45 PM   #1
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Rollover IRA - Please Advise

I have a 401k with a former employer that I'd like to convert into a self-directed IRA. The 401k account is with Fidelity.

Seeing the love for Vanguard funds on this forum I'm leaning towards creating an IRA directly with Vanguard and moving the funds there.

Fidelity assures me that if I roll the funds into an IRA with them, they have funds that match Vanguard in terms of performance and fees.

Another option would be to roll the funds into an account with a "neutral" entity (say Schwab or Scottrade) so I have access to funds from many institutions.

Advice on these options or suggestions for alternatives are welcome.

Thanks all!
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Old 02-19-2015, 04:55 PM   #2
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Quote:
Originally Posted by goneboarding View Post
I have a 401k with a former employer that I'd like to convert into a self-directed IRA. The 401k account is with Fidelity.

Seeing the love for Vanguard funds on this forum I'm leaning towards creating an IRA directly with Vanguard and moving the funds there.

Fidelity assures me that if I roll the funds into an IRA with them, they have funds that match Vanguard in terms of performance and fees.

Another option would be to roll the funds into an account with a "neutral" entity (say Schwab or Scottrade) so I have access to funds from many institutions.

Advice on these options or suggestions for alternatives are welcome.

Thanks all!
I considered Fidelity when rolling over from TIAA-CREF to VG. Went with VG and have not looked back. Very happy and also like the ownership structure of VG.

Also see this:

Bogleheads • View topic - Fidelity vs Vanguard
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Old 02-19-2015, 05:07 PM   #3
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While my preference is Vanguard because of its low fees and ownership structure, it is really a matter of personal preference. Fido had many fans as well as does Schwab and others.
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Old 02-19-2015, 05:22 PM   #4
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I don't know how the fees would compare, but an IRA with a broker such as Charles Schwab should allow you to pretty much put some money into any "family" of mutual funds you might want.
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Old 02-19-2015, 06:18 PM   #5
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Same with Vanguard with a brokerage account.
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Old 02-19-2015, 06:38 PM   #6
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Fidelity still charges 7.95 a trade on Vanguard funds. Vanguard does not charge for any buy/sell of its own funds/etfs
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Old 02-19-2015, 06:49 PM   #7
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Fidelity handled my 401(k) and was very helpful in rolling it over to an IRA. I left half my money at Fidelity, invested in their Spartan funds and moved half to Vanguard.
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Old 02-19-2015, 06:54 PM   #8
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I considered Vanguard, but ultimately went with Fidelity for everything. They have their Spartan series of funds that match up almost exactly with Vanguard's offerings (index funds with low expense ratios). As long as you select out of those and avoid the sales pitches and managed funds (I use Spartan index mutual funds and self-manage exclusively - there are no trade fees at all), you can do just as well at Fido.

Fidelity - Bogleheads

I personally like Fidelity better due to their website interface, their customer service and their ease of use and their calculators and simulators are pretty nifty. But there is absolutely nothing wrong with Vanguard.
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Old 02-19-2015, 07:03 PM   #9
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Fidelity still charges 7.95 a trade on Vanguard funds. Vanguard does not charge for any buy/sell of its own funds/etfs
Fidelity charges $7.95 to trade Vanguard ETFs. Fidelity charges $0.00 for Fidelity ETFs or 70 different IShares ETFs. Fidelity changes $0.00 for it's own funds or other NTF funds, as Vanguard does. I'm sure their NTFs networks are different. If we're going to compare, let's get the facts straight. No offense intended.
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Old 02-19-2015, 07:06 PM   #10
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I have a rolled 401k/IRA at Fidelity. I have funds at Schwab. And I just set up a rollover/IRA at Vanguard for my husband.

All have their pluses and minuses. I like Fidelity's spartan funds - that's what I have there.

They're all a little different. But all good choices.
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Old 02-19-2015, 07:25 PM   #11
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If you go to Schwab and want to buy VG mutual funds, you will pay an extra fee. I think it's $85/transaction.

Some have said they've had this fee waived. I didn't ask but just opened a VG account for mutual fund investing.

Schwab may charge similar funds for Fidelity.

You can buy VG ETFs, however, for $8.95/trade.
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Old 02-19-2015, 09:38 PM   #12
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I use FUSVX, FSEVX, FSDGX, and FSITX at Fidelity for my mom. Very comparable to Vanguard. You can get some Vanguard funds at Fidelity as well, for a one-time buy fee. And of course Vanguard ETF's. If you have retail funds you like in the 401k, Fidelity should be able to transfer them in-kind to an IRA, avoiding disruption of your AA during the transfer. Other than that, it won't be much more difficult to move to Vanguard if you like their fund selection better.
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Old 02-19-2015, 11:19 PM   #13
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If you have a lot, some of these normal brokerages will pay you a bonus to transfer to them, up to $2,000 bonus. You have to keep the funds there for a year, but after that can transfer them somewhere else if you like.
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Old 02-20-2015, 07:09 AM   #14
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Fidelity charges $7.95 to trade Vanguard ETFs. Fidelity charges $0.00 for Fidelity ETFs or 70 different IShares ETFs. Fidelity changes $0.00 for it's own funds or other NTF funds, as Vanguard does. I'm sure their NTFs networks are different. If we're going to compare, let's get the facts straight. No offense intended.
Sorry, I was unaware. Thanks for the clarification.
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Old 02-20-2015, 08:38 AM   #15
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Originally Posted by goneboarding View Post
Seeing the love for Vanguard funds on this forum I'm leaning towards creating an IRA directly with Vanguard and moving the funds there.

Fidelity assures me that if I roll the funds into an IRA with them, they have funds that match Vanguard in terms of performance and fees.

Another option would be to roll the funds into an account with a "neutral" entity (say Schwab or Scottrade) so I have access to funds from many institutions.!
You can own anything you want at Vanguard or Fidelity. You don't necessarily need to go with Schwab, etc to have access to the entire universe of investment holdings, although Schwab is a fine option.

We have all our accounts at Fidelity, but the portfolio consists entirely of Vanguard and iShares low-ER index ETFs. I like to think it's the best of both worlds. We don't own any Fidelity mutual funds. We pay no fees of any kind except the rare $7.95 commission to trade a Vanguard ETF. iShares trade commission-free at Fidelity.

The decision of where to house one's money is completely separate from what to own, and should be based on completely separate criteria. However, if you plan to own mainly Vanguard mutual funds, I'd open the IRA at Vanguard. Other brokerages charge fairly steep fees to trade Vanguard mutual funds. If you want to own ETFs (better choice IMO) and/or stay open to other investment options, then Vanguard is still a fine option; but generally, Fidelity, Schwab, and E-Trade will offer a more complete suite of financial services and their brokerages and online capabilities generally rank higher than Vanguard.
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Old 02-20-2015, 08:51 AM   #16
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This Helps!

Thanks for the advice and the links, everybody. I have the input I need to come to a decision.

Sunset you brought something up that merits checking into... cash incentives to transfer. Nice side effect to have, other things being equal.
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