Fidelity Instead...

[StillHacking]

Greetings all. I have done far more reading and lurking than actively participating here. Thank you all for your contributions, insight, and sharing.

My current "stockbroker" and advisor has moved on to a fee-based company and platform. I had been paying commissions on trades and appreciated the advice for over 25 years. His current lowest management fee at the new place is .25% plus an additional advisory fee detailed in their WMA. Whatever that means. I cannot swallow this.

I'm planning on opening a Fidelity account and creating some new investments there while I decide if I want to move my entire holdings to Fidelity or leave them at Stifel.

Would it be irresponsible for me to move everything to Fidelity? I'm very fortunate to manage 8 figures and not do anything too stupid over the years. There was that tech bubble thing though.

Does an account this size really need "professional" management? I think I've made my decision I just would appreciate confirmation and encouragement.

Thanks!

 

[jazz4cash]

I really love Fido and I do feel strongly it would be worth it to open a modest account and kick the tires with a few free advisors. You should qualify for a bonus if you move enough $. OTOH if you are happy with current brokerage maybe stick around to seehow you like the new rep. It’s not a bad plan to use two brokers with a portfolio that size

 

[Onda]

Does an account this size really need "professional" management? I think I've made my decision I just would appreciate confirmation and encouragement.

Thanks!

Depends on what is in your account right now. If it is 80% VTI 20% VXUS than no. If it is 90% individual stocks than probably yes.

The above are extreme examples.

 

[Qs Laptop]

Greetings all. I have done far more reading and lurking than actively participating here. Thank you all for your contributions, insight, and sharing.

My current "stockbroker" and advisor has moved on to a fee-based company and platform. I had been paying commissions on trades and appreciated the advice for over 25 years. His current lowest management fee at the new place is .25% plus an additional advisory fee detailed in their WMA. Whatever that means. I cannot swallow this.

I'm planning on opening a Fidelity account and creating some new investments there while I decide if I want to move my entire holdings to Fidelity or leave them at Stifel.

Would it be irresponsible for me to move everything to Fidelity? I'm very fortunate to manage 8 figures and not do anything too stupid over the years. There was that tech bubble thing though.

Does an account this size really need "professional" management? I think I've made my decision I just would appreciate confirmation and encouragement.

Thanks!

I was at Edward Jones for about 10 years, starting in 2007. A taxable account and two IRA accounts. Going into 2017 they announced they were starting a 1.35% annual fee on managing IRA's. That was the kick in the butt I needed to leave. I wasn't going to give them piles of money to collect fees on top of the fees for front-load mutual funds.

I moved everything to Fidelity. Fidelity has a cash bonus payment for moving accounts there. I did not say a word to Edward Jones about it (there is no need to do this, Fidelity will handle everything.)

I moved all my assets at Edward Jones to Fidelity "in kind", meaning I moved the holdings over as they were, retaining the same investments. In other words, I didn't cash them out at Edward Jones, then move the cash to Fidelity and start over. Once everything was transferred I began the process of switching investments into something else at Fidelity, with an eye on tax consequences.

I also had an two accounts at TD Ameritrade--one was a small account, maybe $12,000, mostly stocks that I played with and the other was my mother's account that was invested in safe stuff. I also managed my sister's account at E*Trade. Having been exposed to three different brokerage firm's websites I can say that Fidelity's is the most comprehensive and easiest to use. Also, they have stellar support via phone and in most large cities they have offices you can go to for free help and advice.

I eventually moved my sister's account to Fidelity, and I also moved my TD Ameritrade money to Fidelity. (My mom passed away in 2019.)

Overall, the best thing I've done in my investing career was moving my accounts to Fidelity. Do it, you won't regret it!

 

[Qs Laptop]

Depends on what is in your account right now. If it is 80% VTI 20% VXUS than no. If it is 90% individual stocks than probably yes.

The above are extreme examples.

Why does it make a difference what he's invested in right now?

From the OP:

His current lowest management fee at the new place is .25% plus an additional advisory fee detailed in their WMA.

Why give someone .25% in fees to manage an index fund??!!

 

[Midpack]

Depends on what is in your account right now. If it is 80% VTI 20% VXUS than no. If it is 90% individual stocks than probably yes.

The above are extreme examples.

Why does it make a difference what he's invested in right now?

From the OP:

His current lowest management fee at the new place is .25% plus an additional advisory fee detailed in their WMA.

Why give someone .25% in fees to manage an index fund??!!

Congrats, you're in heated agreement - he's saying the same thing you are...

 

[Midpack]

Greetings all. I have done far more reading and lurking than actively participating here. Thank you all for your contributions, insight, and sharing.

My current "stockbroker" and advisor has moved on to a fee-based company and platform. I had been paying commissions on trades and appreciated the advice for over 25 years. His current lowest management fee at the new place is .25% plus an additional advisory fee detailed in their WMA. Whatever that means. I cannot swallow this.

I'm planning on opening a Fidelity account and creating some new investments there while I decide if I want to move my entire holdings to Fidelity or leave them at Stifel.

Would it be irresponsible for me to move everything to Fidelity? I'm very fortunate to manage 8 figures and not do anything too stupid over the years. There was that tech bubble thing though.

Does an account this size really need "professional" management? I think I've made my decision I just would appreciate confirmation and encouragement.

Thanks!

Doesn't necessarily depend on the size of your account. Depends mostly on your ability to invest, how active you are, and your risk tolerance. If you need advice, you'll have to pay for it...

 

[Winemaker]

I have a rollover tIRA at Stifel since 2008 when the Great Recession hit. I was still w^rking and my 401k did not offer any fixed income choices other than a Stable Value account. It has about 10% of our total portfolio; I have 45% in my 401k at ML, and the DW and I have 45% with Fido. My account with Stifel is self directed and is solely fixed income, however, I call him once I have cash balance and we chew the fat a bit. He may make a suggestion or two, but my cost is a $50 commission maybe 3 or 4 times a year and a $25 record keeping fee. So for $225, I get some good ideas that I may deploy in my Fido accounts, and I may DCA down a position with him that I have with Fido. Win-Win for me, as I see it. My $250k investment has grown to $400k.

 

[Onda]

Why does it make a difference what he's invested in right now?

From the OP:

His current lowest management fee at the new place is .25% plus an additional advisory fee detailed in their WMA.

Why give someone .25% in fees to manage an index fund??!!

I wrote if OP has index funds than paying fees makes no sense.

If OP achieved 8 digit portfolio with individual stocks than he may need that advisor.

 

[Dtail]

All my stock accounts and other stock accounts that I manage are at Fidelity. I have an advisor who speaks with me yearly just to go over stuff with no fees charged. This is in addition to the low cost and can be no cost index fund fees that they offer.
They are professional and get back timely on requests. It works for me.
From comments on this board, it appears many folks also like Schwab.

 

[jollystomper]

Greetings all. I have done far more reading and lurking than actively participating here. Thank you all for your contributions, insight, and sharing.

My current "stockbroker" and advisor has moved on to a fee-based company and platform. I had been paying commissions on trades and appreciated the advice for over 25 years. His current lowest management fee at the new place is .25% plus an additional advisory fee detailed in their WMA. Whatever that means. I cannot swallow this.

I'm planning on opening a Fidelity account and creating some new investments there while I decide if I want to move my entire holdings to Fidelity or leave them at Stifel.

Would it be irresponsible for me to move everything to Fidelity? I'm very fortunate to manage 8 figures and not do anything too stupid over the years. There was that tech bubble thing though.

Does an account this size really need "professional" management? I think I've made my decision I just would appreciate confirmation and encouragement.

Thanks!

Some things to consider:
- How many holdings do you have? Do you understand them and why you own them, or are you trusting your advisor to understand them for you? The fewer number of holdings and the better you understand them, you are less likely to need professional management.
- How frequently do you (or the advisor) trade? If you expect lots of trading to catch returns, professional advisor. If you are "set and forget", then you are less likely to need professional management.
- How do you feel when the market drops 10%, 25%, 50%? If you run screaming to the window ready to sell everything and need someone to talk you off of that ledge and calm you down, professional management. If you can shrug it off and still go about your day content and with a smile on your face, you are less likely to need professional management.
- How much further gains to do you need for the lifestyle you desire? If you feel that you have "won the game" and are really looking more to simplify and preserve what you have, you are less likely to need professional management.

 

[Stormy Kromer]

You can do this yourself.

I found myself in a similar situation. Once I FIRED and took some time to look over the investments my FA had me in and the performance I was getting a light bulb went off and I rolled everything to VG.

Its that easy and will save you a ton of fees that have silently been slipping away from you.

My "Aw ha" moment was when I stopped contributing new money to my Roth IRA. During the accumulation years my FA was putting these contributions into a fund with a 5% front end load. So 95% of my contributions went to work for me instead of 100%. Once I stopped contributing new money the FA decided "my best option" was a wrap account with a 1.5% AUM fee. So I sold the funds that I had already paid a 5% commission on and started paying 1.5% a year on what was left. I told him my goal was to match the performance of the SP500. FA said "we've been beating it for years with this portfolio" After seeing this bunch of funds/stocks churn around a lag behind my goal (SP500) for many years I decided "Why don't I just take the money and invest it in the SP500 index ? The FA said the 1.5% annual fee would still apply.

I rolled the whole thing to VG in kind. Sold the 90+ holdings and bought Vanguard Total Stock Index. I'm still years from drawing on this account, if I were to anticipate drawing I would adjust accordingly a couple years ahead of time. Til then I'll keep it this simple. And inexpensive.

Good luck to you.

 

[OldShooter]

@StillHacking, your logic is just fine. One thing I would suggest though, is to contact both Fido and Schwab before you make a decision. In both cases they would look at your account as a very attractive prospect and they will have goodies to offer. Goodie #1 will probably be a cash reward for making the move. Goodie #2, probably more valuable in the big picture, will be a dedicated rep and some perks. Reps are not useful IMO for investment advice but very useful for getting problems solved and answering "How do I do this?" type questions. Those services are tiered based on your assets. IIRC the top tier at Schwab begins at $10M assets and gets you handled out of a dedicated office in NY. Fido, I don't know, but I'm sure they have something similar.

Interview several candidate reps to find your best fit and always run a check here: https://brokercheck.finra.org/ Really, it is the rep that matters, not the name over the door.

Don't worry about the logistics of moving the assets. Your new broker will take care of that after you fill out one form. The new broker will almost certainly pay any fees that the former broker might charge for account closings.

Neither Schwab nor Fido charge commissions on trades, so (as others have mentioned) transfer in kind and clean up positions as necessary after the move.

 

[Qs Laptop]

I wrote if OP has index funds than paying fees makes no sense.

If OP achieved 8 digit portfolio with individual stocks than he may need that advisor.

Got it. Sorry for my confusion.

 

[Al18]

Fidelity sounds like a good choice. Fidelity has two locations in Pittsburgh, PA. You should make an appointment and talk to an advisor. Considering the size of your investments, you can decide if you want to do it yourself or use an advisor. In my experience, this will be a low key meeting for your information.

 

[LateToFIRE]

I'm moving everything to Fido. For that size portfolio they will put you in their Private Client business, where you'll get an advisor team assigned to you. There is no AUM fee if you are managing your own portfolio, though they are there to make recommendations and answer questions. If you later decide you want them to actively manage your portfolio or some part of it, you can move to their AUM fee model. I like the flexibility. I don't like fees.

 

[ncbill]

I'm moving everything to Fido. For that size portfolio they will put you in their Private Client business, where you'll get an advisor team assigned to you. There is no AUM fee if you are managing your own portfolio, though they are there to make recommendations and answer questions. If you later decide you want them to actively manage your portfolio or some part of it, you can move to their AUM fee model. I like the flexibility. I don't like fees.

Ditto...the above is what I did.

Then I inherited some modest positions at a brokerage which charges a 2% AUM!

So I moved those via ACATS over to my Fidelity account just as soon as I could.

 

[LateToFIRE]

Ditto...the above is what I did.

Then I inherited some modest positions at a brokerage which charges a 2% AUM!

So I moved those via ACATS over to my Fidelity account just as soon as I could.

Pretty sure you were one of the folks suggesting I make the move in my first intro post!

 

[Dtail]

I'm moving everything to Fido. For that size portfolio they will put you in their Private Client business, where you'll get an advisor team assigned to you. There is no AUM fee if you are managing your own portfolio, though they are there to make recommendations and answer questions. If you later decide you want them to actively manage your portfolio or some part of it, you can move to their AUM fee model. I like the flexibility. I don't like fees.

This is the key. One is basically getting advisory services for no AUM FEE if they wish.

 

[mrfeh]

Does an account this size really need "professional" management? I think I've made my decision I just would appreciate confirmation and encouragement.

Do it yourself. No need to give away tens of thousands of dollars every year.

https://www.bogleheads.org/wiki/Bogleheads®_investing_start-up_kit

 

[tizod]

With that amount of money, I would never have it all at one place. Especially in this age of cyber hacking that might lock up a company for some time. I would recommend, if 8 figures, 3 brokerages. It's really easy to mange the different ones. Fido, SCHB, and Etrade etc all work. I also think with that amount you move things to "unmanaged" items: funds, fixed etc. that you don't need to actively play with (unless you want to). If you like to play, keep one brokerage for that. If you need help with that, I think one of the above brokers can provide assistance, but I'd also consider hiring a PAID advisor to get you set up and then drop them after you are off an running. This path can also ease up tax complexities and fit a good plan for some estate management/trusts which I assume you have (should have). Good Luck

 

[audreyh1]

If you’ve already managed your 8 figure portfolio and are comfortable with it then sure moving it to Fidelity will probably work for you. Probably save you a lot of $$$ too. You can always do this gradually as you learn the new environment.

 

[Exchme]

While a quarter point is pretty good as advisory fees go, it does add up to a lot of money on this size account. Unless the advisor is doing a lot of sophisticated planning for you, I would move as and most people don't need what "advisors" offer.

The only concern would be if a large amount of this is in taxable in proprietary funds that can't be held outside of the advisor's control and if they're happened to have large gains in them. I would certainly move everything else and would strongly consider moving anything with modest gains just to be rid of the fees.

I would keep your life simple and move it to just one company. That will also get you more attention from them. In general, for each type of account (IRA, Roth, taxable, inherited IRA), you open a corresponding account at the new broker and then fill out the form/call the new broker, giving them the details of the accounts to transfer over. Let the new broker do the work. Be aware of how the new broker makes money - I understand that Schwab makes all their profit and then some by paying paltry interest on cash for instance.

When I was firing our former advisor, they (I believe intentionally) messed around, did it wrong twice, delayed, and dragged this out for six weeks, then finally transferred the money on the last day of a quarter. I believe that was so they didn't have to refund any of the management fees they took on the first day of the quarter.

 

[StillHacking]

WOW! Great input here. I'll try to sum things up. I've been in the market and learning since 1977 or so. I've always been a tightwad like my father before me. For the longest time, Dad's investment strategy was to buy and hold solid companies that paid a dividend and keep the stock certificates in his sock drawer. He apologized for the lack of diversification. He did eventually move to a broker and continued to invest as well.

XOM, CVX, BP, WM, JPM, MRK, VZ, T are some of the blue-chip stocks I continue to
own. I have a basket of American funds as well and currently, a large cash component earning 5%. Smaller Roth and conventional IRA accounts too.

I'm comfortably uncomfortable with the market's ups and downs. That last big dip did pucker my sphincter a bit though. I never called my broker, he always called me to check my pulse. When you have stock in solid companies that pay a dividend the storm is easier to weather. My portfolio increased by 9M by just waiting over the years. Spending some of the dividends and reinvesting some as well. It's really just conservative dumb luck and being too heavy in energy.

I did not know there would be any perks by moving a large sum over to Fidelity. I guess I should actually speak with someone as opposed to just sign up online. Thanks for that! I will most likely continue to do business with Stifel and move some things over, as well as start with some cash.

As I repeatedly would tell my broker, I'm not a trader, I'm an investor. Buy and hold like Warren Buffett. I don't like spending a great deal of time obsessing over the market. Yes, set it and forget is a good plan.


I told my broker, maybe I should just get the certificates and keep them in my sock drawer.

Maybe I'll just make Fidelity my sock drawer, with a little free advice now and then.

 

[OldShooter]

... I did not know there would be any perks by moving a large sum over to Fidelity. I guess I should actually speak with someone as opposed to just sign up online. ...

I'd strongly encourage you to talk to Schwab too. In both cases start by talking to the branch manager. Even if you are sure about Fidelity, you might be able to run the two off against each other. Alternatively you might find Schwab offers a better deal.

Also, wherever you go, be sure to interview at least a couple of reps. Explain to the branch manager what kind of rep you are looking for -- all aspects. Experience, sex, investing interests, etc. and have him/her pick out a couple of candidates for you to talk to. Make sure you click with the rep. brokercheck, too.

To get the best goodies you may have to transfer more than a portion of your portfolio. But maybe the carrot of getting everything will be enough.

Good luck; keep us posted.