Fidelity/Vanguard fees and minimum invstment

[TheWizard]

This thread raises a question for me.
Most of my tax-deferred money is in my 403(b) plan with TIAA even though I retired in 2013.
I've been doing partial transfers to my tIRA at Vanguard each December after completing my RMD, the reason being: to allow me to do QCDs in future years.

My largest holding at TIAA is VIIIX which is an institutional version of Vanguard's S&P 500 index fund VFIAX but with a lower ER of 0.02%.
VIIIX has a minimum requirement of $100 Million which my former employer's plans apparently meet, totalled over a few thousand people.

So will I be able to do a partial IN KIND rollover of VIIIX shares from TIAA to Vanguard? Whereupon it would be converted to the higher ER VFIAX class?

I'm guessing the only way to find out is to ask Vanguard...

 

[Texas Proud]

If you hold VTSAX in a Vanguard Brokerage account they can convert it to VTI ETF without any tax consequences. VTI is easier to manage since it is an ETF and not a mutual fund.

There are other funds that have an ETF you can convert too...



I would convert even if I were to stay at Vanguard as you have the ability to sell at a price you know instead of getting the end of day price..

 

[TheWizard]

There are other funds that have an ETF you can convert too...



I would convert even if I were to stay at Vanguard as you have the ability to sell at a price you know instead of getting the end of day price..

ETFs are more funner, correct...

 

[mrfeh]

There are dozens of Fidelity vs Vanguard threads over at bogleheads.org for those that are thinking of switching.

Given the better web site, better service, brick and mortar locations and equal or lower cost at Fidelity, I don't see any reason not to switch.

 

[VanWinkle]

I just moved my two accounts from Fidelity to Vanguard to simplify to one brokerage for the future. I was not impressed with Fidelity and thought their website was difficult. Their online programs were on option trading and individual stock/bond trading. That is not how I spend my retirement time.
Vanguard is a simple "DIY" platform that works great for me. YMMV.

 

[gauss]

So in Kind means that the investments are still in the Vanguard funds even though they are managed by Fidelity?

If you have only Vanguard Mutual Funds on their old legacy non-brokerage platform, then you might not be able to do an IN-KIND transfer. (This may be possible, but I am not sure of it.)

If you are on the Vanguard VBS brokerage platform, then other brokers can receive your assets without selling them first (ie. and IN-KIND transfer)

-gauss

 

[Time2]

I was not impressed with Fidelity and thought their website was difficult.

A difficult website is IBKR (Interactive Brokers). I find it extremely difficult to find my account data on there. I opened that account because I could borrow on margin at 1.5%, that was a 2 or 3 years ago. I short term financed a house for my daughter and SIL, rather than sell shares and pay taxes, I borrowed on margin to buy the house. Paid it all back 9 months later, after they got a mortgage. IBKRs margin loan rate has increased to 6.077% today.

 

[Retire2023]

Probably not. At least I couldn't, when faced with the same situation. Since I did not have access to those institutional VG tickers in my IRA, then I could not transfer them in kind from the 403(b).

Thanks, I thought it was a long shot.

 

[Dufferin]

Does Fidelity provide an RMD service similar to Vanguard? Vanguard calculate it for you and make it easy to schedule it.

 

[RetiredHappy]

Does Fidelity provide an RMD service similar to Vanguard? Vanguard calculate it for you and make it easy to schedule it.

Yes. The online system is very easy to use. You can also call up to talk to an agent if you need additional assistance.

 

[myself]

Yes, I but usually would switch 1 thing at a time, meaning if I had IRA, Roth, regular taxable accnt.
I'd pick one of the three and move it (entirely) as IN KIND , so nothing is sold/bought.

Once it made it and I confirmed it was all there, I'd move another.

Why would you care about it being transferred "in kind"?
I can think of a reason or two, but nothing else:

1. So you can easily keep track of the cost basis
2. So you don't incur any transaction fees (most brokerage firms charge a minimal fee to perform transactions)

 

[Out-to-Lunch]

Why would you care about it being transferred "in kind"?
I can think of a reason or two, but nothing else:

1. So you can easily keep track of the cost basis
2. So you don't incur any transaction fees (most brokerage firms charge a minimal fee to perform transactions)

One good reason is so that you are not out of the market during the time it takes to liquidate the other holding and purchase a commensurate replacement.

 

[Texas Proud]

Be aware that if an IRA (including ROTH) they do NOT transfer the 'cost' basis as Vanguard does not think it is important....

 

[SecondCor521]

Be aware that if an IRA (including ROTH) they do NOT transfer the 'cost' basis as Vanguard does not think it is important....

When would the cost basis of an IRA known to the custodian be relevant? And what do you mean by cost basis in this context?

 

[Texas Proud]

When would the cost basis of an IRA known to the custodian be relevant? And what do you mean by cost basis in this context?

I like to see what gain (or loss) I have made on my investments even in an IRA... it is meaningless for tax purposes but to me it is important information. Why should I have to try and figure it out as their system can keep that info easily.


In my Schwab account I can easily see that my QQQ is up 31.6% since I bought it.. even Vanguard has kept track of the cost... not as easy to see but it is there. They did screw it up one time when there was a stock split and did not want to fix it since it is 'meaningless' in their words...


When I moved accounts no cost basis came over... my Schwab accounts show 'Incomplete' on the cost column...so when I go to the positions page there is nothing on cost on those accounts so the total gain/loss is WAY off...

 

[Steeler75]

Just reviewed an email I received from Vanguard that provided information on their updates to fees. One fee caught my eye and left me with a bad taste in my mouth:

• Account closure and transfer fee: A $100 processing fee may be charged for account closure or transfer of account assets to another firm.**

Yes it’s not the dollar figure but the principle of charging a fee to close or transfer. My DW has her account with Vanguard and mine is with Fidelity. This fee goes into effect on 7/1/24. Makes me want to close the account and consolidate at Fidelity before the effective date…

P.S. the fee may be waived for accounts over $5M!

 

[Trooper]

Makes me want to close the account and consolidate at Fidelity before the effective date…

Yep, me too. If it were a total of $100 I might not, but DW and I each have a tIRA and a Roth, a taxable account jointly held, DW's Inherited IRA, and a rollover tIRA from a former 401(k). That's $700.

 

[sengsational]

Why wouldn't you just leave $1 in your account?

 

[TheWizard]

Vanguard needs to clarify their ACTUAL plan to avoid a significant exodus...

 

[jazz4cash]

That’s what I keep thinking. It’ll be more costly for VG and their account holders if a lot of folks leave accounts open with tiny balances. I guess they could impose account minimums if they don’t have ‘em already.

Why wouldn't you just leave $1 in your account?

 

[Steeler75]

Why wouldn't you just leave $1 in your account?

The way I read their statement, I thought their fee applies to transfers to other institutions at well, “ or transfer of assets to another firm”. So if you left the dollar in an account, you’d still have to pay the fee for the transfer.

 

[mrfeh]

Yep, me too. If it were a total of $100 I might not, but DW and I each have a tIRA and a Roth, a taxable account jointly held, DW's Inherited IRA, and a rollover tIRA from a former 401(k). That's $700.

Fidelity will probably pay that fee for you, but double check.

 

[Surewhitey]

If you do, be sure to phone Fidelity and ask if they will reward you for switching, some brokerages do, and an extra few hundred to thousands is worth the call.

This is very likely the case. I changed from a community property account at Etrade to a joint acct. in the same brokerage (estate planning thing) & they even gave me a $600 "bonus". It was an automatic setting likely by putting in the code, but I'll take it. The bonus went up to $4k if you transfer $1.5mil...

 

[sengsational]

The way I read their statement, I thought their fee applies to transfers to other institutions at well, “ or transfer of assets to another firm”. So if you left the dollar in an account, you’d still have to pay the fee for the transfer.

I thought the $100 was to transfer the account. I can't imagine they'd get away with charging that much to just move funds.

 

[Gumby]

I thought the $100 was to transfer the account. I can't imagine they'd get away with charging that much to just move funds.

That was my interpretation as well.