Fidelity Only or Vanguard Too?

[JohnnyBGoode]

I currently have around $1M in Fidelity in a combination of taxable and tax-deferred accounts. I don't have any issues with Fidelity, I like their website, and have the funds invested in their low-cost index funds, mostly:
FSTVX -Fidelity Total Market Index
FSIVX -Fidelity International Index
FTBFX - Fidelity Total Bond Fund

As part of pending FIRE, I will be cashing out remaining stock options from MegaCorp as well as rolling over my 401K. The total after-tax will be around $1M. My plan was to just roll it into my Fidelity accounts according to my current allocation.

Question - Does it make sense to have all (mostly all - there is some cash in Ally Bank, etc) in the Fido basket? Or is it more prudent to open an account at, say, Vanguard invest the $1M in the same allocation proportion but in equivalent Vanguard accounts? I assume both Fidelity and Vanguard are financially stable - and it would be (slightly) more effort to deal with two brokerages instead of one - but I'm interested to hear the opinions of the group here. Better consolidated into one brokerage house or split into two?

Thanks!

 

[steadystate]

Somewhat out of laziness I have all our eggs in the Fido basket. Whatever external force might bring Fido down (zombie apocalypse?) will level Vanguard as well.

Also if you maintain more than 1M in Fido you have access to a financial advisor. Ours is really good; they are on salary, which is partly determined by client feedback.

 

[Ready]

I would not want to have tax deferred funds in multiple brokerage accounts. It sounds like it would be a nightmare to calculate the RMDs when it comes time to do that. And it make rebalancing a bit more complicated as well.

I don't see any advantage to it. I do have funds in both, but only because I don't want to sell my Fidelity funds and incur the capital gains, so I just leave the account in place. But all new funds go into Vanguard.

But both firms are really about equal to me. I don't have a strong preference to either one.

 

[fritz]

We run the same scenario as you - seven figure mix of taxable and deferred, with Ally Bank and local credit union for cash (in 8th year of retirement, no pensions or annuities). We keep all investments at Vanguard. Had used others in the past, but consolidated everything at Vanguard for simplicity in retirement. There have been threads here on this topic and others favor splitting their holdings among more than one investment company. I also feel that given the sheer size of Vanguard (and Fidelity) - we'll have more than money issues to deal with if one or more of them fails.

 

[swakyaby]

I currently have multiple accounts at both brokerages. But when I get close to RMD withdrawals, I have every intention of consolidating the IRAs beforehand at one institution for simplicity sake.

 

[Fedup]

I have strictly IRA and Roth IRA at Vanguard. After tax is at Scottrade. I was about to transfer to Fidelity, but Lazy got in the way. So of course, I called Scottrade and negotiated for some money before transferring it back. I was worrying about doing paperwork, I have it set up. I let at Scottrade so I can trade easily.

 

[Jerry1]

So what about the crazy things like someone compromising your account or some scandal at a particular firm. Isn't there any scenario where splitting your money would make sense? I get and I agree, if there is a financial collapse, it would not much matter but it seems like a little diversity in your holdings is prudent. No?

 

[Scuba]

I think both Fidelity and Vanguard are very reputable. I would keep your funds consolidated for administrative ease.

 

[Doribe]

I use Fidelity, Vanguard, e-trade and Prudential.
Prudential - mine and DH's 457s
Vanguard - DH's Roth
E-trade - my Roth and taxable
Fidelity - taxable
I will probably consolidate at some point.

 

[DrRoy]

I think both Fidelity and Vanguard are very reputable. I would keep your funds consolidated for administrative ease.

+1. When I RE'd I consolidated at Fidelity for ease of management. Also, larger total sums can sometimes get you more attention if you want it.

 

[littleb]

In the past few years my goal was to consolidate everything into 3 financial institutions.

Currently, our checking account, annual ROTH's contributions and brokerage account is at Schwab.

Fidelity has our rollover IRA'S and Simple plans, plus a ROTH conversion which was processed December 2016.

The past few years I have moved a few IRA's (ROTH and traditional) to Vanguard to take advantage of low expense rates.

However, I have never been completely satisfied with the customer service at Vanguard compared to Fidelity and Schwab. There are certain times of the year (year end and around tax time) you can wait over an hour for a rep at Vanguard. Sometimes their answers are not correct. Last year due to poor customer service at Vanguard I converted money from a traditional IRA to a ROTH at Fidelity. It took 15 minutes with a Fidelity rep guiding me.

Also, Fidelity and Schwab have more modern websites and tools compared to Vanguard. I enter all my assets into Fidelity's Retirement Planner and my portfolio is in one place. The Fidelity accounts are automatically downloaded and the others (Schwab, Vanguard, Ally) I update manually every quarter.

After retirement I will roll Vanguard accounts into Fidelity.

 

[Montecfo]

My breakdown is as follows:
E-trade-taxable account, Roth's, Rollovers, Regulars
Schwab-current 401K (still working)
TDAmeritrade-HSA (tied to HSA bank)
CapitalOne-short-term funds
BB&T checking

Wow,looks like i need to consolidate but in reality I already did, to get rid of accounts at fund companies.

Plan is to consolidate Schwab account with E-trade when I FIRE. The rest can stay where they are.

So I am not sure there is a huge reason to have your funds with one institution, or not. Biggest thing for me was cutting down on statements.

 

[easysurfer]

I think the choice is a balance between diversity vs clutter.

Personally, I prefer to keep my investments in just one institution.

 

[Midpack]

I think the choice is a balance between diversity vs clutter.

Personally, I prefer to keep my investments in just one institution.

+1. I was all Fidelity, and moved everything to Vanguard back when their index fund choices and fees were much better than Fidelity. I've since put our cash with Ally since MM funds are no longer worthwhile. It is nice to have everything in one place admin wise though it would be nice to have assets split for safety, but it's not worth the tax consequences to me to move some assets (not everything can be done in kind). And if something that serious happened to Fido or Vanguard, it would probably be in the midst of bigger financial problems...might affect both.

 

[jetpack]

I just counted, I have 14 'banks' I deal with. (investments, savings, cc, etc) Way too many. Some are still open only because it's hard to move. (penfed cd's and the like) Everything new is going into Vanguard.

 

[MRG]

I use both. I gain piece of mind knowing that these two leaders have their own datacenters and share no infrastructure. My IT career was full of times doing DR, I've seen systems fail and nobody(including the hardware vendor) understand why. There was one that took two full weeks to resolve. While one team was working on a fix for the OS, another group was setting up a temporary computer room and preparing for a new machine from the factory.

Past two, or three fund companies you can't guarantee that the infrastructure isn't shared. You could pick three other fund companies to find they all reside in the same datacenter on the same hardware.

 

[Cobra9777]

We have everything at Fidelity, plus some cash at Ally. I like the administrative simplicity of consolidation and the occasional perks of Private Client Group. I've thought about diversifying, but if I did, it would be to Schwab or E-Trade, not Vanguard. Too many horror stories about their service and website. I own lots of Vanguard ETFs, just don't like the idea of housing accounts there. For now, the benefits of consolidation slightly outweigh the small risk of not being diversified at two brokerages.

 

[audreyh1]

We have almost all of our funds invested in a Fidelity brokerage, with just a token amount at Schwab where I use their investor checking. I own a couple of Vanguard funds but not directly.

We have cash at Ally, Synchrony, Andrews, American Express bank, and Penfed in high yield savings and various CDs. It's super easy moving stuff back and forth to the Fidelity brokerage, transfers usually happen in a day or two.

I notice the interest paid by the Fidelity money market funds moving up finally, so maybe soon they will compete with the high yield savings accounts. Their prime (potentially floating NAV) money funds are already over 1%, and the government cash reserves is yielding 0.45%.

 

[braumeister]

Six investment accounts, with about 75% at Fido, 15% at Vanguard, and 10% at Schwab.

Plus a bunch of banks and credit unions.

I don't mind dealing with all of them, and like having a bit of diversity.

The RMD thing seems like a non-issue to me, because Fido will take out the right amount from the IRAs there and so will Vanguard. Two checks, so what?

 

[foxfirev5]

DW & I use both VG and Fidelity. It probably takes and extra few minutes to manage on a quarterly basis. I like the service from Fidelity, although I really have not found a need for the Private Client Rep. He checks in periodically but there's not much I haven't already seen online. The website and tools are light years ahead of VG. Fees for both are extremely close.
For our no frills Roths and DW's IRA we've stuck with VG. We don't trade and are basically letting them ride. The diversification may be a benefit if access to the other accounts is hindered in some way.
Based on our experience if we had to go with one it would be Fido.

 

[whatnot]

DH has his 401k via employer at Fidelity. We will keep it with them after retirement.

I have my rollover IRA from previous employer at Vanguard (I learned about Vanguard here!). My 401k via employer is with Lincoln Financial. Limited investment options - so plan is to rollover to IRA at retirement to Vanguard.

So all DH retirement will be with Fidelity and mine with Vanguard. I like the protections in keeping $ in a 401k. And I like having $ split between 2 companies. Also have cash in Ally and local CU.

 

[Nature Lover]

I have accounts at Schwab, Fidelity and a local Credit Union. All three have local offices nearby; all three have good on-line services; all three have provided excellent service over the years.

 

[euro]

I currently have around $1M in Fidelity in a combination of taxable and tax-deferred accounts. I don't have any issues with Fidelity, I like their website, and have the funds invested in their low-cost index funds, mostly:
FSTVX -Fidelity Total Market Index
FSIVX -Fidelity International Index
FTBFX - Fidelity Total Bond Fund

As part of pending FIRE, I will be cashing out remaining stock options from MegaCorp as well as rolling over my 401K. The total after-tax will be around $1M. My plan was to just roll it into my Fidelity accounts according to my current allocation.

Question - Does it make sense to have all (mostly all - there is some cash in Ally Bank, etc) in the Fido basket? Or is it more prudent to open an account at, say, Vanguard invest the $1M in the same allocation proportion but in equivalent Vanguard accounts? I assume both Fidelity and Vanguard are financially stable - and it would be (slightly) more effort to deal with two brokerages instead of one - but I'm interested to hear the opinions of the group here. Better consolidated into one brokerage house or split into two?

Thanks!

I'm grappling with this question (consolidate vs split) too, right now. I'll either consolidate all at Fidelity or split it between Fidelity and Schwab. I have slowly soured on Vanguard over the years. Nothing TERRIBLE, but in my opinion, Schwab has now moved ahead of Vanguard in many ways, including customer service (and, for me, a local brick and mortar office, if I ever need it - same as Fido).
The decision will be close, and it may come down to the $500 cash incentive Schwab offers for bringing in IRA accounts. Fidelity doesn't match that and "only" offers a ton of free trades (which are basically useless to me since I am an infrequent trader).

 

[JohnnyBGoode]

I'm grappling with this question (consolidate vs split) too, right now. I'll either consolidate all at Fidelity or split it between Fidelity and Schwab. I have slowly soured on Vanguard over the years. Nothing TERRIBLE, but in my opinion, Schwab has now moved ahead of Vanguard in many ways, including customer service (and, for me, a local brick and mortar office, if I ever need it - same as Fido).
The decision will be close, and it may come down to the $500 cash incentive Schwab offers for bringing in IRA accounts. Fidelity doesn't match that and "only" offers a ton of free trades (which are basically useless to me since I am an infrequent trader).

Good point. I have the same reaction to the ongoing free/low cost per trade promotions going on. Since I trade very infrequently and in reasonably high $$$ amount (as part of periodic rebalance) the cost / trade promotions aren't that interesting. Now $500 to bring in an IRA account? That's interesting!

 

[Fedup]

I think it makes sense to have account at both if you buy ishares ETF and Vanguard ETF shares. Buy ishares ETF at Fidelity account and buy Vanguard ETF at Vanguard. They are free if you do.