Scottrade to Vanguard

[columbus]

After reading on here I am planning to dump my higher cost funds in scottrade and transfer to low cost vanguard index funds. Roth $85k...holds 17 different funds and vanguard said they could cost up to $35 each to sell.

Should I liquidate in scottrade first? Should I buy one etf or something to stay in the market during transfer? Does it make sense to move? Any other thoughts/advice?

I think my new long term plan is low cost index/etfs and maybe some individual stocks I really like. Any advice on crafting new portfolio?

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[travelover]

Are these investments in an tax deferred account or a taxable account?

[2B]

17 different funds? Good grief.

$35 seems high for this sort of transaction unless there is some sort of rear end load. Vanguard doesn't charge $35 and neither does Scottrade. Something seems amiss to me.

An alternative is to convert to Vanguard ETFs in Scottrade if you are worried about being out of the market during the transfer period. For simplicity I'd put it all into VTI. Vanguard does not charge to sell their ETFs. You will not be able to avoid the transaction fees for these trades and the account transfer fee Scottrade surely charges - probably around $60.

[columbus]

Tax defered roth its and rollover ira. The Roth is the largest with most high expense funds. I also have a small taxable account with a few stocks but that could just transfer over as is. I'm not sure what to do...if I just liquidate my luck the market will bounce back then.

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[NgineER]

I'd liquidate in scottrade first if all is in a Roth IRA as I think you are saying and then bring over to Vanguard.
Did a similar move from ML a couple of years ago, but don't remember paying any fees on it.

Talk to Vanguard about what you want to do and ask them how to best handle it to minimize costs.

They should be well aware.

[Cobra9777]

Why not just hold Vanguard ETFs at Scottrade? Is there some other dissatisfaction with Scottrade, other than the high-cost funds you currently own?

I use Fidelity to house my portfolio, which is primarily composed of low-cost Vanguard index ETFs. I prefer Fidelity's online interface, research tools, cash management tools, cash-back credit cards, plus a better overall brokerage experience. Only disadvantage is I pay $7.95 to trade Vanguard ETFs ($0 for most iShares). But I trade so infrequently that this fee is of no consequence.

[columbus]

I was wondering if staying might be a better option. Are the etfs as good as the funds? I would buy and hold so prob just spend $7 per year?

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[Cobra9777]

Quote:

Originally Posted by columbus I was wondering if staying might be a better option. Are the etfs as good as the funds?

The short answer is yes. The ETFs are just another share class of the corresponding mutual fund, and frequently carry a lower expense ratio. A more complete answer is here.

[seraphim]

One question not addressed is your current ER: how much would you save on annual basis by making the change? Our total ER is about .08 using Vanguard. If your current ER is, say, 1.08, you'd be giving up about 25% of your returns over 25 years.


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[maloney50]

I'd just transfer your account as is to vanguard and then make changes. Vanguard has this down to a science. I bet it will be a lot less to trade with vanguard.


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[catotx]

It really depends on what mutual funds you currently have. Selling the funds at Vanguard could potentially cost more.

For example, for funds not in the NTF ("no-transaction-fee") program, it costs $17 to sell at Scottrade and $35 to sell at Vanguard.

But if you have $50k in Vanguard assets, you would qualify for Voyager status and the cost to sell reduces to $20. However, qualification would be an chicken-and-egg problem because you wouldn't have $50k in Vanguard assets unless you sell the third party funds first.

PS. Only Vanguard mutual funds and Vanguard ETFs count towards Vanguard assets.

[columbus]

My avg er is 1.25 across 20 funds...so paying over $900 per year in fees. I'm just afraid to move it all to vanguard and have to pay up to $700 to sell off. ...and st has a $75 transfer fee I didn't think about too.

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[redduck]

Quote:

Originally Posted by columbus After reading on here I am planning to dump my higher cost funds in scottrade and transfer to low cost vanguard index funds. Roth $85k...holds 17 different funds and vanguard said they could cost up to $35 each to sell. Any advice on crafting new portfolio? Sent from my SPH-L710 using Early Retirement Forum mobile app

Quote:

Originally Posted by columbus My avg er is 1.25 across 20 funds...so paying over $900 per year in fees. I'm just afraid to move it all to vanguard and have to pay up to $700 to sell off. ...and st has a $75 transfer fee I didn't think about too. Sent from my SPH-L710 using Early Retirement Forum mobile app

Did you buy 3 additional funds since yesterday?

I think it costs $17 dollars to sell a mutual fund in Scottrade. It costs $7.00 to sell an ETF or a stock with Scottrade. As others have mentioned, you might consider speaking to Vanguard about the best way to transfer your assets (which may include just turning your assets into cash at Scottrade and then moving the cash over to Vanguard). If you have Vanguard ETF's or Vanguard Mutual funds currently at Scottrade you might want to transfer them to Vanguard and not sell them through Scottrade.

I imagine you will receive sound advice about re-crafting your portfolio from the Forum's members once you get over to Vanguard.

[columbus]

There was a second page I didn't notice pretty messed up. Most should have been zero cost transaction funds in scottrade. I'm wondering if I should just sell and buy vanguard etfs and stay in scottrade to avoid transfer fee?

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[catotx]

What are some of the mutual funds? Can you group them into asset classes like US large caps, small caps or international large caps?

I suggest to group the similar ones together and replace each asset class by a low-cost Vanguard ETF.

[Cobra9777]

Quote:

Originally Posted by redduck I imagine you will receive sound advice about re-crafting your portfolio from the Forum's members once you get over to Vanguard.

Wow. I didn't realize that was a precondition to receive sound advice from the Forum.

Quote:

Originally Posted by columbus I'm wondering if I should just sell and buy vanguard etfs and stay in scottrade to avoid transfer fee?

Bingo.

[redduck]

Quote:

Originally Posted by Cobra9777 Wow. I didn't realize that was a precondition to receive sound advice from the Forum....

Good point.

[columbus]

Well...I funded a vanguard brokerage account today and will try to find the best wsy to leave scottrade. I will have about $50 in sale fees but $300 in account transfer fees if I can't get them waived somehow...there were none when I opened accounts years ago...I don't think it is right to charge now that I have no choice.

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