Decision - sell Vanguard IRA, buy Fidelity IRA?

[stephenson]

Hi All,

Sorry about title - couldn't figure out better way to say it shorter.

My IRAs are split between Vanguard and Fidelity - 35% Vanguard and 65% Fidelity.

Fidelity has all my joint taxable accounts - about 2 times amounts of the IRAs.

I have an account rep at Fidelity with monthly telecoms to broadly review status of holdings - can ask pretty much anything of the rep and he or his staff respond quickly - immediately - even weekends. I have never been offered anything like this with Vanguard.

Fidelity's site is easy to use, transparent, etc ... also has modeling and some budgeting, etc capability.

I had planned to just keep them separate and track, etc, separately, but it is a bit harder to do this with two companies, two sets of fund names for almost the same holdings, etc. I have Vanguard accounts loaded into the Fidelity site so can "see" them, but I still must review two different sets of accounts.

Here's what is in Vanguard:
VSCSX
VTIAX
VTSAX
VGSLX
VSIAX
VSMAX

I could easily find like funds at Fidelity - just sell out of Vanguard without tax implications, then buy into like funds at Fidelity.

Has anyone been through this decision process? Other factors I have missed or should consider?

Thanks!

 

[MRG]

Frequently. I have about the same split as you with the same providers. Wow, monthly check ups? I'm private client but haven't worked with a Fidelity rep for a couple years. I meet their asset requirements but the branch manager told me to call the 800 number. Last one I had was a dirty rotten annuity salesman so no real loss I guess.

I'm very happy with Vanguard but haven't moved for one reason - disaster recovery. I spent years in IT in financial services and am too familiar with what can happen. I was an employee who was drug into DRs, not the exercises but real world SHTF type.

While I believe both providers will make you whole after any issues, I don't want to care. I've seen how one of these organizations handled prior issues. Perhaps I should be happy just having one?

 

[lem1955]

I understand the desire for consolidation. I've been doing similar transactions to consolidate accounts at Vanguard. I will have only a Health Savings Investment account at Fidelity, and day-to-day checking and savings at my local credit union in a few weeks. Vanguard doesn't have HSA investment accounts or I wouldn't have anything at Fidelity. I have a Flagship rep at Vanguard that sounds like your Fidelity account rep. I think consolidation at either company would bring the same benefit. I don't know Fidelity's site but Vanguard's also has a lot of tools. I particularly like Portfolio Watch and Portfolio Tester Tool for rebalancing. As far as I know Vanguard and Fidelity are two great brokerage firms. I don't think you can go wrong consolidating at either one.

 

[OldShooter]

No need to sell and buy, Just transfer the assets in kind. Then you can sort out and consolidate at leisure.

 

[Ian S]

No need to sell and buy, Just transfer the assets in kind. Then you can sort out and consolidate at leisure.

I just did this earlier this month as part of a consolidation. Still have my Vanguard holdings in a separate Fidelity account. I could have combined them with an existing Fidelity IRA but chose not to for now. So I'm down to Fido and TD (soon to be Schwab) and a small account at VALIC with interest fixed at 4.5%. I find it's easier to be proficient at navigating websites if there are fewer of them. I'll wait until the dust settles before deciding on what to do with TD/Schwab but I just found out how much easier it was to set up a distribution with Fido than TD. Things like that matter to me.

 

[pb4uski]

I have both but the inverse of the OP... probably 60% at Vanguard, 10% at Fidelity (starting in 2019) and the rest at a few credit unions in high interest CDs.

While I know many here rave about Fidelity's website and tools, I haven't been impressed.... it's ok, but nothing to rave about IMO.

If I were the OP I would keep at least a couple years of spending at Vanguard... preferably in a single fund for simplicity. I recall one poster who was frozen out of his Vanguard accounts for some reason that had nothing to do with him but with a parent IIRC and there is the disaster recovery issue that MRG mentions.

 

[lem1955]

I recall one poster who was frozen out of his Vanguard accounts for some reason that had nothing to do with him but with a parent IIRC and there is the disaster recovery issue that MR mentions.

Yikes. Something else to worry about.

 

[OldShooter]

... Other factors I have missed or should consider?

Looking at your list of funds but without % allocations, and without seeing the Fido funds, you may overweighted to some degree in real estate and maybe more so in small caps. Once everything is at Fido, they should be able to run you a report with a pie chart showing your % holdings by sector. Then you can decide whether that's what you want.

& BTW, just because you move the VG funds to Fido there is no reason that you have to replace them with Fido funds. My first priority would be to minimize the number of funds held without much regard to who runs them. While doing that you can consider which manager you prefer. You can look at expense ratios too but index funds have gotten so cheap that I don't think a few basis points one way or another is a significant selection criterion. Others may differ on this, though.

 

[MRG]

Yikes. Something else to worry about.

+1
The account lockout thing happened to me too. My Fidelity brokerage account, a secondary source of funds during our first 3 years, was locked by the state of PA. It was the target account for a TOD on a portion of my DF's estate. After he passed and the funds were transferred they locked my entire account because a portion of the funds were part of his estate and inheritance tax was owed! I was allowed to trade, but couldn't access any of my funds. I could have blown every dime on bad options but couldn't write a check for a dime. Took PA at least 6 months to agree they had received the check.

 

[pb4uski]

^^^ You were the one that I was thinking of.

They wouldn't let you move the funds that had been deposited to your account under the TOD and any growth to a separate account that would be locked so you could regain access to your own money?

 

[jazz4cash]

I transferred assets in kind to my Fido IRA. They made it very easy. I called Fido and gave them my outside account info. They filled out the forms and sent them electronically for me to print out, sign, and submit by mail, fax, or hand deliver to the local Fido office. The outside broker charged a fee to close and transfer the securities which Fido reimbursed.

 

[dtbach]

Easy enough to do and not a right or wrong answer. I'm split about 60% Fidelity/35% Vanguard and plan to keep it that way. There are some funds I really like at Vanguard and also just "in case" of IT disasters, I'm keeping both.

 

[Mickslick]

I would just keep it as is. Presently I have a sizeable IRA at Vanguard, and a small fidelity IRA in my wife's name, however, when she retires in four years or so we will be transferring a substantial sum from her 401a's to her Fidelity IRA. I like the idea of diversifying between the two. As another mentioned, in case of a significant event, even if you are likely to ultimately recover all assets, there may be a time of inaccessibility and high anxiety, the diversification would help to mitigate these if such an event were to occur.

 

[MRG]

^^^ You were the one that I was thinking of.

They wouldn't let you move the funds that had been deposited to your account under the TOD and any growth to a separate account that would be locked so you could regain access to your own money?

No they, Fidelity, couldn't do anything once the TOD was executed. That's the special service folks talk about. Unfortunately we didn't know the downstream impact of PA. wanting to guarentee their 10% inheritance tax.

The lesson is sometimes one provider or one account may result in you being separated from your own funds. Best to have redundancy in many things.