Move from managed to self-directed investments

[ERD50]

I don’t understand sometimes. If one doesn’t like/want/is comfortable self investing than the fact that the investment advisor made them so much more money ...

How is this a fact?

.... A long as objectives are met by the advisor firm- why does one necessarily care how much money they make( assuming the percentage does not increase and probably goes down the more they manage.). ...

Sure, if they can make more money for me after fees, that's great. But that seems to be the exception, and how do you find the few that can do it? And can they do it long term?

Studies say no.

-ERD50

 

[OldShooter]

I would look closely at Wellington and Wellesley from Vanguard. A mix of the two is excellent.

Why? Seems like a waste of time two buy two very similar funds, and blend funds at that.

 

[OldShooter]

A Vanguard advisor and I have my MIL invested in blended funds with dividends reinvested. She has zero interest in investing and doesn't need the money. This solution keeps her invested without requiring ongoing effort. OP seems to be looking for simple self management.

She's a fire-and-forget investor. Nothing wrong with that. A blended fund or a target date fund is a good choice.

 

[RetiredHappy]

Just want to give everyone a quick update. Our FA proposed dropping the commission to 0.6%. We said nada. We told him that amount that we are paying is only one half of the frustration, it does not address the other part with their incurring ridiculous amount of capital gains in taxable account due to their active management. We want to move to a few ETFs only and would like to retain him as our FA but not using the investment house's bundle of investments. He was supposed to come back with a proposal on fees based on our investment model. He didn't come back with a proposal but instead asked us to let him know the ETFs which we are looking at. Just not happening there.

On the Vanguard end, the frustration continues. We created login accounts and started the process of adding new accounts. I also tried creating joint account with my son and that came back with system error after trying a dozen times. A week later, we both got emails asking us to call back to complete the process. Phone calls yesterday and today, 2 hours wait time each and got nowhere. We are beyond frustrated with Vanguard. I got into another "call back" request this morning and expect to spend my entire day today just hanging around waiting for them to call back.

 

[OldShooter]

... On the Vanguard end, the frustration continues. We created login accounts and started the process of adding new accounts. I also tried creating joint account with my son and that came back with system error after trying a dozen times. A week later, we both got emails asking us to call back to complete the process. Phone calls yesterday and today, 2 hours wait time each and got nowhere. We are beyond frustrated with Vanguard. I got into another "call back" request this morning and expect to spend my entire day today just hanging around waiting for them to call back.

VG business model involves a lower level of personal service than Schwab or Fido.

Why don't you try one of those? Interview both if they have offices near you, then pick one. If only one has a nearby office, think about visiting there. NB: TDAmeritrade has been bought by Schwab, so your nearest TDAmeritrade office may become a Schwab office. Ask.

Most VG funds are as easy and cheap to buy via Schwab as at VG. Don't know about Fido.

 

[mrfeh]

Just want to give everyone a quick update. Our FA proposed dropping the commission to 0.6%. We said nada. We told him that amount that we are paying is only one half of the frustration, it does not address the other part with their incurring ridiculous amount of capital gains in taxable account due to their active management. We want to move to a few ETFs only and would like to retain him as our FA but not using the investment house's bundle of investments. He was supposed to come back with a proposal on fees based on our investment model. He didn't come back with a proposal but instead asked us to let him know the ETFs which we are looking at. Just not happening there.

On the Vanguard end, the frustration continues. We created login accounts and started the process of adding new accounts. I also tried creating joint account with my son and that came back with system error after trying a dozen times. A week later, we both got emails asking us to call back to complete the process. Phone calls yesterday and today, 2 hours wait time each and got nowhere. We are beyond frustrated with Vanguard. I got into another "call back" request this morning and expect to spend my entire day today just hanging around waiting for them to call back.

Just make a clean break with the FA. You are nothing but a source of income for him/her.

From reading many posts over the years, it seems you will get better customer service at Fidelity or Schwab, compared to Vanguard.

 

[RetiredHappy]

VG business model involves a lower level of personal service than Schwab or Fido.

Why don't you try one of those? Interview both if they have offices near you, then pick one. If only one has a nearby office, think about visiting there. NB: TDAmeritrade has been bought by Schwab, so your nearest TDAmeritrade office may become a Schwab office. Ask.

Most VG funds are as easy and cheap to buy via Schwab as at VG. Don't know about Fido.

My husband does not want to go back to Fidelity due to the bad taste in our mouths over their managed service even though just using the Fidelity platform has nothing to do with their managed service.

He was with Schwab before but he feels that if we want Vanguard ETFs, why go with another firm even though we can buy the same thing. We have one foot in with Vanguard and I guess we cannot turn back. He managed to get the transfer process started for his IRA accounts with Vanguard. The 3 accounts that are in limbo are each of our separate individual non-IRA accounts and my son's joint account with me.

 

[RetMD21]

Just want to give everyone a quick update. Our FA proposed dropping the commission to 0.6%. We said nada. We told him that amount that we are paying is only one half of the frustration, it does not address the other part with their incurring ridiculous amount of capital gains in taxable account due to their active management. We want to move to a few ETFs only and would like to retain him as our FA but not using the investment house's bundle of investments. He was supposed to come back with a proposal on fees based on our investment model. He didn't come back with a proposal but instead asked us to let him know the ETFs which we are looking at. Just not happening there.

On the Vanguard end, the frustration continues. We created login accounts and started the process of adding new accounts. I also tried creating joint account with my son and that came back with system error after trying a dozen times. A week later, we both got emails asking us to call back to complete the process. Phone calls yesterday and today, 2 hours wait time each and got nowhere. We are beyond frustrated with Vanguard. I got into another "call back" request this morning and expect to spend my entire day today just hanging around waiting for them to call back.

Well, Vanguard isn't the only game in town. It has worked out well for me but early on my issues were simple and now I have access to higher level service. As others have said Schwab and Fidelity are good. I have had good luck with E*Trade. I think some FAs are more tax conscious than others. If they get an assets under management fee they have little financial incentive to churn. I think it is funny that the FA is asking the customer about which ETFs

 

[RetiredHappy]

I think some FAs are more tax conscious than others. If they get an assets under management fee they have little financial incentive to churn. I think it is funny that the FA is asking the customer about which ETFs

We will get to Flagship status almost immediately after the IRA accounts get transferred over as my husband will simply sell almost everything non-Vanguard and simplify to Vanguard ETFs.

Funny you said that... I told my husband that he is trying to learn a few things from us...

 

[RetiredHappy]

On the question of ROTH conversion, it does not work for us as we are already at 22% and 24% tax brackets and my husband has already started RMD.

 

[SecondCor521]

On the question of ROTH conversion, it does not work for us as we are already at 22% and 24% tax brackets and my husband has already started RMD.

You can still do Roth conversions on top of RMDs (or from your IRA while he takes his RMD from his).

Have you tried to estimate your tax bracket be when the first of you passes away?

 

[RetiredHappy]

You can still do Roth conversions on top of RMDs (or from your IRA while he takes his RMD from his).

Have you tried to estimate your tax bracket be when the first of you passes away?

I know we can still do ROTH conversions on top of RMD. Right now I am thinking of working around the amount of RMD through use of beneficiaries. I read that I can disclaim part of IRA which will then pass on to the contingent beneficiary. In the case of my son whom I have to support and by naming him as the contingent beneficiary, by disclaiming say 33% of it, my son will get that distribution over 10 years. His tax bracket is much lower, although he will be subjected to CA taxes. I intend to use that as part of estate/tax planning strategy.

 

[SecondCor521]

I know we can still do ROTH conversions on top of RMD. Right now I am thinking of working around the amount of RMD through use of beneficiaries. I read that I can disclaim part of IRA which will then pass on to the contingent beneficiary. In the case of my son whom I have to support and by naming him as the contingent beneficiary, by disclaiming say 33% of it, my son will get that distribution over 10 years. His tax bracket is much lower, although he will be subjected to CA taxes. I intend to use that as part of estate/tax planning strategy.

Yup, disclaiming is a good tool to consider as well, and I think would work as you describe as long as there are no other primary or contingent beneficiaries. If there are beneficiaries in addition to you and your son, it gets more complicated.

I'm seriously considering a partial disclaimer as well for similar reasons. But I had to work with the original owner to get the beneficiary designations aligned so my disclaimer would work, because I have siblings who are also primary beneficiaries. Fortunately my preferences lined up with the IRA owner's wishes and things are set now I think.

 

[RetiredHappy]

Yup, disclaiming is a good tool to consider as well, and I think would work as you describe as long as there are no other primary or contingent beneficiaries. If there are beneficiaries in addition to you and your son, it gets more complicated.

I'm seriously considering a partial disclaimer as well for similar reasons. But I had to work with the original owner to get the beneficiary designations aligned so my disclaimer would work, because I have siblings who are also primary beneficiaries. Fortunately my preferences lined up with the IRA owner's wishes and things are set now I think.

Ours is pretty straightforward. Good luck with getting it set up the way you want it to work.

 

[SecondCor521]

Ours is pretty straightforward. Good luck with getting it set up the way you want it to work.

Thanks. I think it's all set, but I'm also considering consulting with an estate planning attorney I know to confirm my understanding is correct. Once the IRA owner passes away, there are fewer options if things are not as expected.

 

[teej1985]

If you have more than $250k in assets, you can likely get free trades on Vanguard mutual funds at Schwab, see this thread:

https://www.bogleheads.org/forum/viewtopic.php?p=6157663#p6157663

Also they'll likely match any broker promos you can find elsewhere to move your assets.

 

[OldShooter]

We will get to Flagship status almost immediately after the IRA accounts get transferred over as my husband will simply sell almost everything non-Vanguard and simplify to Vanguard ETFs. ...

Once you hit $1M at Schwab (regardless of what you hold) you will be assigned a dedicated rep. I'm not sure our rep is even allowed to give specific investment advice, but he is our ticket to cutting away administrivia and to access Schwab resources. For example, I asked him what Schwab thought about leveraged loans and he had a recently-written analysis in my email the same day. The reps turn over from time to time; we have had several, but we've probably had this guy for ten years.

Schwab has another heavy hitter threshold at $10M, but we are not there so I don't know much about it. I've been told that accounts at this level are "handled out of New York."

Anywhere you go, plan to interview reps rather than just take the first one you are assigned. At Schwab or Fido, talk to the branch manager and tell them what you'd like. Age, sex, years of experience, investing interests, ... whatever.

 

[RetiredHappy]

I want to give everyone an update. After hours and hours waiting on hold with Vanguard in opening our accounts, including our trust accounts, they could not do it. In the end they did not understand how to set up our trust accounts. What a shock! We had an in person meeting this morning with Schwab rep and he said he didn't know anything about how to set up trust accounts and his operations manager would be in on Friday and she would call us. He also called someone in corporate who similarly said she was not sure. We called Fidelity and got in to see a rep this afternoon. Met him, bright CFP and his VP and got all our accounts set up. So it is official, we are now Fidelity clients. I am so happy that my husband was left with no choice but to go back to Fidelity. He is logged in and is so happy to see a real user friendly interface again and the process is so smooth in setting up our accounts as well as initiating the transfers.

 

[RetMD21]

I want to give everyone an update. After hours and hours waiting on hold with Vanguard in opening our accounts, including our trust accounts, they could not do it.

Wow, they accommodated our trust w/o problems. Fidelity is fine. You can buy ETFs anywhere

 

[RetiredHappy]

Wow, they accommodated our trust w/o problems. Fidelity is fine. You can buy ETFs anywhere

The best part is that Fidelity managed to pull up our old accounts and made some changes to it and added a couple of accounts.

 

[RobbieB]

I like Fidelity too, never had a problem. Visit their local office from time to time too. Very close to 3 of my favorite restaurants -

 

[RetiredHappy]

Wow, they accommodated our trust w/o problems. Fidelity is fine. You can buy ETFs anywhere

That was probably the old Vanguard. The new Vanguard - they don't answer phones and they don't have people who know how to set up trust accounts.

 

[ychuck46]

Not sure what you need from them

That was probably the old Vanguard. The new Vanguard - they don't answer phones and they don't have people who know how to set up trust accounts.

When you say "Vanguard does not know how to set up trust accounts", I'm not sure what you want them to do. We recently set up a revocable trust with our LAWYER, not with Vanguard, and then went online to change the Vanguard accounts to read the beneficiary for each being the trust. What else do you expect from Vanguard?

 

[MRG]

When you say "Vanguard does not know how to set up trust accounts", I'm not sure what you want them to do. We recently set up a revocable trust with our LAWYER, not with Vanguard, and then went online to change the Vanguard accounts to read the beneficiary for each being the trust. What else do you expect from Vanguard?

+1
Vanguard handles our trust just fine I'm very sure millions of others have trusts that Vanguard executes perfectly.

I'm sorry OP has had issues. I spent 29 years in this industry, been inside most of the data centers and back offices of the major providers, developing solutions for the industry. I'd fill out a survey with the factual information you have to document your issues. Many organizations the C levels are involved in the survey results.

ETA - multiple fund companies couldn't set up the OP's trust properly. Why even the OP couldn't just set it upon themselves but Fidelity magically could. OP how do know your trust is set up properly at Fidelity? Sure they said it was OK how do you know? Guess it won't matter. FYI - Every fund company I know of has a trust department to deal with the complexities of different trusts. This thread needs a pound of salt.

 

[ychuck46]

Trusts are very specific to situations

+1
Vanguard handles our trust just fine I'm very sure millions of others have trusts that Vanguard executes perfectly.

I'm sorry OP has had issues. I spent 29 years in this industry, been inside most of the data centers and back offices of the major providers, developing solutions for the industry. I'd fill out a survey with the factual information you have to document your issues. Many organizations the C levels are involved in the survey results.

ETA - multiple fund companies couldn't set up the OP's trust properly. Why even the OP couldn't just set it upon themselves but Fidelity magically could. OP how do know your trust is set up properly at Fidelity? Sure they said it was OK how do you know? Guess it won't matter. FYI - Every fund company I know of has a trust department to deal with the complexities of different trusts. This thread needs a pound of salt.

I still am at a loss for what Vanguard is doing in regards to trusts. Are they actually doing trusts for people? If so, I would be real leery of that approach, since trusts are very specific to each individual situation, state, etc, and should be done between the person(s) setting up a trust and a lawyer who specializes in this area. After that you merely change the beneficiary on your Vanguard accounts to read the official trust name. Basic question - what are people looking to Vanguard to do beyond what I have stated. Thanks.