Transferred IRA with Regrets

[ERD50]

My biggest concern with the OP is not the mechanics of a transfer, but what I bolded below...

Hi there, I am new here. Not retirement age yet. I have an IRA and I transferred it recently to a company but have regrets. I believe they are fleecing me for all kinds of fees and I need to move my entire portfolio over, one piece at a time, to Vanguard. I don't know if my IRA has been churned or not, but wonder if that would affect a transfer going smoothly.

If anyone else here has transferred your IRA, how did the transfer process go?

OP should know what kind of fees there are and the amounts.

OP should know if they are being churned.

If OP doesn't know what's going on with the account, how will they know if things are better at wherever they transfer to?

Plus, why do they think it needs to be done "one piece at a time"? I think OP should take a little time to educate themselves. And where is the IRA now (which company?).

-ERD50

 

[oneill225]

Can't churn without your consent

We have transferred accounts twice in the past year; from TD Ameritrade to Vanguard and from Vanguard to Schwab. The big firms (Vanguard, Blackrock, Schwab, etc...) are about the same in terms of process, but vary a little in regards to fees. Vanguard did a little bait and switch with their stock trade fees, so we went to Schwab which has flat pricing per trade (fidelity jacks up the price after 21 trades).

No one should be "churning" your money unless you have an actively managed account. In a world of index funds and ETFs covering all investment sectors and timelines, you do not need a managed account unless you get queasy thinking about money. It is a scam in my opinion. If you have any doubts after learning what you can from the from the web, contact them, directly, to clarify your intent. Beware, however, they will try to convince you that you cannot live without their higher priced services.

 

[Investornew]

It's supposed to be flawless, that's why when it's not flawless that's a problem. Just google it and you'll find plenty of problem out there for Vanguard.

OK. I hear mixed results. Some have no problem transferring to vanguard, others say it's a big problem.

If it's that bad, I may consider an IRA with Fidelity instead.

I had Vanguard years ago and there were customer service problems. I felt like a number, not a person with them.

Yes, their index funds and all that are great. It's just that when I call in I get passed around and disconnected.

 

[Investornew]

My biggest concern with the OP is not the mechanics of a transfer, but what I bolded below...



OP should know what kind of fees there are and the amounts.

OP should know if they are being churned.

If OP doesn't know what's going on with the account, how will they know if things are better at wherever they transfer to?


-ERD50

This place, I've heard, they churn funds here. It's a rumor. They put me into an "aggressive" portfolio and I've heard that's a red flag for churning. It's only a suspicion at this point.

There was one disclosure on one of their investors. I looked it up online. It was resolved, but it still concerns me. They gave me paperwork that included the names of investors with their office, their backgrounds, disclosures, etc. but left this one person out of it. But I know he works there, because he answers the phone sometimes and I found him online at that office location. I just found that odd. Why was he left out? He's the one with the disclosure.

 

[Investornew]

I moved a set of active mutual funds to Vanguard about 12 years ago. I didn't want to liquidate everything but rather move it intact and liquidate carefully over time. It wasn't bad but would have been simpler if I was willing to liquidate everything and go directly into index funds. If your current firm has you in back loaded mutual funds (I was in a couple) you may want to consider transferring in kind and exiting as the loads tail off. Also, make sure you stop having distributions reinvested.

I'm pretty sure there are no back end loads. Thanks. Would you recommend going directly into index funds to do the transfer more easily?

 

[Bestwifeever]

This place, I've heard, they churn funds here. It's a rumor. They put me into an "aggressive" portfolio and I've heard that's a red flag for churning. It's only a suspicion at this point.

There was one disclosure on one of their investors. I looked it up online. It was resolved, but it still concerns me. They gave me paperwork that included the names of investors with their office, their backgrounds, disclosures, etc. but left this one person out of it. But I know he works there, because he answers the phone sometimes and I found him online at that office location. I just found that odd. Why was he left out? He's the one with the disclosure.

"They" put you into an aggressive portfolio? You didn't sign off on it (and maybe are now having buyers regret)?

 

[nwsteve]

Vanguard did a little bait and switch with their stock trade fees, so we went to Schwab which has flat pricing per trade (fidelity jacks up the price after 21 trades).
QUOTE]

I have made way more than 21 trades with Fidelity and the price has always been at the fixed rate advertised--currently $4.95, was 7.95 except when it was free for one of their funds or ETF partners index funds
Nwsteve

 

[MRG]

I've transferred to fidelity and vanguard from outside transfer agents. No problems, always initiate from the receiving transfer agent.

 

[RE2Boys]

. No problems, always initiate from the receiving transfer agent.

+1, always

 

[ERD50]

This place, I've heard, they churn funds here. It's a rumor. They put me into an "aggressive" portfolio and I've heard that's a red flag for churning. It's only a suspicion at this point. ...

"They" put you into an aggressive portfolio? You didn't sign off on it (and maybe are now having buyers regret)?

+1.

Investornew - there's nothing wrong with an "aggressive portfolio" if that is what you want. But churning is bad.

But they are either churning or they are not. What do your statements say? Is stuff being bought/sold a lot? Why give them this buy/sell authority - then it's a judgement call on how much is too much? Or are you in a fund that does a lot of buying and selling internally (high turnover - can mean high cap gains distributions at year end)?

Rather than "suspect" anything - find out. Take control. It's a lot easier to take control and DIY, then try to figure out what someone else is or is not doing.

-ERD50

 

[SevenUp]

Rather than "suspect" anything - find out.

+1

For example, OP, what is in your 1099-B for 2016?

 

[OldShooter]

@Investornew, I am kind of with @ERD50 on this: I think your level of knowledge about investing and about the mechanics of this stuff is very consistent with your chosen screen name.

I would suggest that you transfer to a firm that has a local office and that will assign a rep to you. Your rep can help with the transfer process but, more importantly, help you on a ongoing basis with questions and decisions. I'm definitely not talking about storefront bandits here, though. I know that Schwab can do this for you and, from what I understand, Fidelity can too. Others here may have other suggestions but those two are IMO among the most trusted names.

Depending on how much money you are working with, you might also consider interviewing some Registered Investment Advisors who have access to DFA funds. (https://us.dimensional.com/individuals) Access to DFA funds involves a fairly complex screening process that I believe increases the likelihood that you will find a good advisor even if he does not necessarily advise 100% in DFA funds. You will pay for this, of course, but in the end you will probably make more additional money than you pay.

Again depending on how much money you are working with, Schwab (and others) offer tiers of service. I've lost track of what Schwab calls their heavy hitter program but IIRC the first threshold step was $1M in assets at Schwab. With the higher tiers you get more responsiveness, better service, and things like dedicated account service phone numbers that get answered much more promptly than the public ones. So ask about this, too.

Finally, be sure you understand the difference between Series 7 licensed brokers and Series 65/66 Registered Investment Advisors (fiduciaries) and understand which type you are dealing with. With the new fiduciary standard law, this will b slightly less of a concern, but IMO a tiger can't change his stripes overnight no matter how much the Feds would like him to. So I would still recommend RIAs over guys with vanilla Series 7 licenses.

You've probably shopped hard for cars in the past, talking to multiple dealers and studying on the internet. Deciding where to put your investments is far more important than any car, so take your time and be thorough. Good luck!

 

[Investornew]

Does Vanguard have local offices?

 

[Investornew]

"They" put you into an aggressive portfolio? You didn't sign off on it (and maybe are now having buyers regret)?

Yes, he put me in aggressive. I didn't say I wanted that.

 

[Fedup]

OK. I hear mixed results. Some have no problem transferring to vanguard, others say it's a big problem.

If it's that bad, I may consider an IRA with Fidelity instead.

I had Vanguard years ago and there were customer service problems. I felt like a number, not a person with them.

Yes, their index funds and all that are great. It's just that when I call in I get passed around and disconnected.

Interesting, I had them years ago and I had no problem with them. That goes to show that I'm not biased. And I watched my transfer, I had to call for status every so often, I'm not a patient person so I did call once a week, and got all kind of wrong answers. So many things were wrong that It was unbelievable. What I told them NOT to do they did it anyway. It was a little better with my husband's transfer, but still awfully slow. They screwed up with my secretary's account too. I think it took more like 6 months before they sorted it out.

 

[redduck]

Does Vanguard have local offices?

Yes, they certainly do have local offices (four of them)
but it might help if you lived near where they are located:

Charlotte, North Carolina
Scottsdale, Arizona
Valley Forge, Pennsylvania
Washington, D.C

I think they also have a local office in the Netherlands (which, of course would be local to the Netherlandians).

 

[sengsational]

I've done six transfers to Vanguard in the last 12 months. Except for the fact that the time they took was variable, each transfer worked exactly the same and flawlessly.

I initiated the transaction online, and mailed the forms that day. Not counting the mailing day, the number of days the transfer stayed in "waiting for paperwork" varied from 2 to 7 business days [4,6,2,5,7,5]. All except the 2 spanned a weekend, so add 2 to get calendar days. Consistently 4 additional days were required from when Vanguard sent the request to the other institution and when it was "done, done". It kind of looked done after 3 days, but the funds were there, but not there, so needed another day for being absolutely ready.

 

[oneill225]

Vanguard did a little bait and switch with their stock trade fees, so we went to Schwab which has flat pricing per trade (fidelity jacks up the price after 21 trades).
QUOTE]

I have made way more than 21 trades with Fidelity and the price has always been at the fixed rate advertised--currently $4.95, was 7.95 except when it was free for one of their funds or ETF partners index funds
Nwsteve

Not sure why I said Fidelity, I meant Vanguard. Thanks for catching that.

 

[bw5972]

OK. I hear mixed results. Some have no problem transferring to vanguard, others say it's a big problem.

If it's that bad, I may consider an IRA with Fidelity instead.

I had Vanguard years ago and there were customer service problems. I felt like a number, not a person with them.

Yes, their index funds and all that are great. It's just that when I call in I get passed around and disconnected.

I get very good customer service at E*Trade. At ER I rolled my 401k out of Fidelity into an IRA there. I have with in E*Trade, been able to buy into Vanguard index funds i.e.

VDADX
VFWAX
VTSAX

So from my point of view, I'm getting the best of both worlds.

 

[Investornew]

Thanks all for the replies. I appreciate reading your responses.

The firm I am transferring from is Edward Jones. They have a lot of fees that are, quite frankly, shocking once you find out about them.

When I set up my IRA, they assured me there were no loading fees on the mutual funds, only the 1.35% new standard fee they have now, it is pro-rated throughout the year. So I'm hoping I won't lose chunks of my IRA once I transfer.

I don't feel there are many benefits to EJ, other than having a personal adviser. My IRA has done well so far with EJ but the market's been good recently.

I don't see how this firm can survive into the next decade, though, unless they change their business model, which in my opinion, is old fashioned. People nowadays get their information online and they will see negative reviews and learn that other companies don't charge the same excessive fees. They won't care about the yearly birthday card that EJ sends out. They would rather invest online (even if they're not good at it or don't know what they're doing).

 

[Investornew]

There is also something I should add.

I have 529 plans with EJ now, that I started up two years ago. I plan to transfer those also.

However, I was going to put $700 in them, while they were still at EJ, this month. I asked my adviser if there is a transfer fee. I thought, there's probably a small one.

Well guess what? The "fee" to transfer $700 into my 529 plans, would be $90. Ninety dollars. No, I'm not making this up. He got his calculator out and told me that's what it would cost. So I'll hang on to that $700 and wait until I set up new 529 plans with Vanguard, to transfer the money.

Just to add money to the 529 plans. And I already paid a hefty loading fee when I opened these up two years ago.

So when I say, I can't see this business surviving into the next decade, this is why.

 

[euro]

There is also something I should add.

I have 529 plans with EJ now, that I started up two years ago. I plan to transfer those also.

However, I was going to put $700 in them, while they were still at EJ, this month. I asked my adviser if there is a transfer fee. I thought, there's probably a small one.

Well guess what? The "fee" to transfer $700 into my 529 plans, would be $90. Ninety dollars. No, I'm not making this up. He got his calculator out and told me that's what it would cost. So I'll hang on to that $700 and wait until I set up new 529 plans with Vanguard, to transfer the money.

Just to add money to the 529 plans. And I already paid a hefty loading fee when I opened these up two years ago.

So when I say, I can't see this business surviving into the next decade, this is why.

That's crazy - so many better choices.

 

[MRG]

Best advice is to run(far and fast) away from ED Jones. You won't find many negative reviews about them as they do a great job of hiding them(they have a great IT staff).

Here's a parody that's sadly very true. Think it's R rated:


https://youtu.be/LDyDDBv2HzE

 

[Investornew]

Best advice is to run(far and fast) away from ED Jones. You won't find many negative reviews about them as they do a great job of hiding them(they have a great IT staff).

Here's a parody that's sadly very true. Think it's R rated:


https://youtu.be/LDyDDBv2HzE

Watched that, it's hysterically funny.

EJ and their IT department can hide some of their reviews, but not all. I've seen quite a few of them!

 

[OldShooter]

... The firm I am transferring from is Edward Jones. ...

Sigh. That's exactly who I had in mind when I said to avoid the "store front brokers."

We have a good friend with a great heart and soul but little financial acumen. We recently found that Eddie Jones has their hooks into him and have sold him "five or six" annuities that he does not understand. He is also paying some kind of annual account fee @ $450. We are trying to gently guide him to escape velocity. I will also watch for an opportunity to call the compliance police re the "suitability" of this rape.

Re your 529 plans, can you not buy index ETFs or Vanguard funds? That will keep Eddies paws off your money once the transaction fee is paid. Don't let them put you into funds with 12b-1 fees or loads of any kind.

Re continuing in business I have read that the new fiduciary rule is expected to hurt them significantly. Expect them, though, to follow the letter of the fiduciary rule, which applies only to retirement funds, and continue to rape and pillage cash accounts and things like 529s. I also read that they plan to ask clients to sign some kind of disclaimer that will let them off the fiduciary hook. True or not, I don't know.