Fidelity offers individual HSA accounts?

[Focus]

That’s not how transfer in kind works. You transfer the Vanguard shares to Fidelity, and it may be possible now that you can own Admiral shares outside Vanguard.

That's what I assumed, which is why I said earlier that I wasn't planning to transfer those funds. What's the advantage of holding the same Vanguard funds at Fidelity?

 

[audreyh1]

If you wanted to consolidate at Fidelity. Both companies are fund supermarkets. It no longer really matters which of the two brokerages hold your funds - it’s a matter of convenience and customer service.

 

[pb4uski]

That's what I assumed, which is why I said earlier that I wasn't planning to transfer those funds. What's the advantage of holding the same Vanguard funds at Fidelity?

In a taxable account since it is a transfer in-kind is a transfer of the securities and not a sale, it isn't a taxable event. It is just having a different custodian for your Vanguard shares.... now Fidelity and previously Vanguard.

 

[Focus]

If you wanted to consolidate at Fidelity. Both companies are fund supermarkets. It no longer really matters which of the two brokerages hold your funds - it’s a matter of convenience and customer service.

Thanks. I'll look into it to ensure that it's not detrimental financially in any way. Interestingly, came across this article: Vanguard Keeps Some of Its Cheapest Funds Out of Reach for Fidelity Customers (Barron's)

Vanguard, it turns out, is keeping some of its lowest-cost products off the shelves of fund “supermarkets” like Fidelity and Schwab. While investors can purchase most Vanguard mutual funds at these firms, they will have to buy directly from Vanguard if they want the lowest-cost Admiral shares of its actively managed funds....

“Vanguard doesn’t compensate us for the services we provide,” a Fidelity spokeswoman told Barron’s. “That’s why there’s a higher transaction fee for its funds,” she added, referring to the $75 fee that Fidelity charges to buy a Vanguard fund, well above its normal $49.95 rate.

 

[audreyh1]

Well that’s true, you can move your index fund admiral shares in kind to Fidelity now, but buying more of any Vanguard fund will cost you a $75 transaction fee (not including automatically reinvested dividends), so you would end up buying the Fidelity index fund instead to avoid that fee. Selling a Vanguard fund at Fidelity - there is no transaction fee. So that would probably be the main reason for continuing to hold such funds through Vanguard if you wanted to be able to continue to add to them without transaction fees.

I’ve owned the Vanguard short-term bond index fund for a long time in my Fidelity account. Fidelity had no equivalent. I had to pay $75 for each purchase. I simply did purchases in large amounts such that the transaction fee hit didn’t add that much to the very low ER, at least when compared to my other funds at the time. Eventually, a couple of years ago, Fidelity finally came out with their own short-term bond index fund, so I switched to buying that instead, but still hold the legacy Vanguard equivalent. Lo and behold last year my Vanguard short-term bond index was automatically switched to Admiral shares! A non taxable event. It won’t cost me any transaction fee to sell from my Vanguard fund holdings at Fidelity but I’m in no hurry.

 

[big-papa]

Well that’s true, you can move your index fund admiral shares in kind to Fidelity now, but buying more of any Vanguard fund will cost you a $75 transaction fee (not including automatically reinvested dividends), so you would end up buying the Fidelity index fund instead to avoid that fee. Selling a Vanguard fund at Fidelity - there is no transaction fee. So that would probably be the main reason for continuing to hold such funds through Vanguard if you wanted to be able to continue to add to them without transaction fees.

I’ve owned the Vanguard short-term bond index fund for a long time in my Fidelity account. Fidelity had no equivalent. I had to pay $75 for each purchase. I simply did purchases in large amounts such that the transaction fee hit didn’t add that much to the very low ER, at least when compared to my other funds at the time. Eventually, a couple of years ago, Fidelity finally came out with their own short-term bond index fund, so I switched to buying that instead, but still hold the legacy Vanguard equivalent. Lo and behold last year my Vanguard short-term bond index was automatically switched to Admiral shares! A non taxable event. It won’t cost me any transaction fee to sell from my Vanguard fund holdings at Fidelity but I’m in no hurry.

Similar issue here for me in that I needed an ultra-short bond fund and couldn't find anything. But iShares ICSH fit the bill and I could trade it commission-free at Fidelity. And now with commission free online trades on just about everything, there are even more options....

 

[audreyh1]

Similar issue here for me in that I needed an ultra-short bond fund and couldn't find anything. But iShares ICSH fit the bill and I could trade it commission-free at Fidelity. And now with commission free online trades on just about everything, there are even more options....

It’s true - you could start using the Vanguard ETFs for their index funds at Fidelity commission free.

In fact, I think at Vanguard you can convert the index fund to the ETF. Transfer that in kind to Fidelity, and then you can continue commission free!