Holdings Transfer - Vanguard to Fidelity?

[stephenson]

Hi All,

My wife and I have IRA accounts with Vanguard - and with Fidelity.

Have considered - on and off - simplifying by moving the Vanguard holdings to Fidelity, and have confirmed with Fidelity that they can transfer all as holdings without issues - transparently.

I can't think of any real issues, and it would simplify, especially with upcoming requirement for RMD.

Would appreciate your thoughts?

 

[engineernerd]

We like not putting all our eggs into one basket, and apply that practice not only to investment choices but also to where we hold assets.

More specific reasons to keep things as they are:

(1) Tech glitches affecting your account access at one brokerage.

(2) One brokerage deciding to protect you from yourself. https://www.bogleheads.org/forum/viewtopic.php?t=409234

(3) One brokerage locking you out of your account at the government's request. So far a couple of people have been locked out of their bank accounts right here in the U.S. (Scott Ritter but I forgot who else I read about), and that has also happened to the trucker convoy participants in Canada during COVID and various people in Europe.

(4) SIPC limits. You never really know.

P.S. - also (5), or maybe (1a), a fraudster managing to access your accounts using your own login credentials at one brokerage, and cleaning you out. There was a news story quite a while back where a man's niece gained access to his house while he was in the hospital, somehow discovered his login credentials, and cleaned out his investment account. The bank or brokerage resisted making him whole. Don't know if they ever did so.

 

[PaunchyPirate]

I'm in the camp that chooses to prefer simplification over worrying that something might go wrong. I respect the other side of the opinion, but I have chosen to simplify. Personal choice, as I see it.

I LOVE having one place to go to to see my holdings. I find the Fidelity website to be just what I want. I'm single and have no children. I want my financials to be as simple as possible for me as I age and for my eventual estate executor (my niece).

 

[COcheesehead]

Ask for a transfer bonus.
You’ll love having all your eggs in one basket. It makes for a better basket.

 

[Koolau]

I'm with engineernerd. IIRC some posters here have described being locked out of a brokerage firm for reasons mentioned or other.

I only have Vanguard for my brokerage but have half my funds elsewhere that are unlikely to also be locked should Vanguard choose to do so.

I agree that it's "nice" having everything in one place, but it has a price.

 

[COcheesehead]

Do you need all your assets at once?
Keep good credit card limits, a local checking account. Consolidation is powerful.

 

[MRG]

I'm with engineernerd. IIRC some posters here have described being locked out of a brokerage firm for reasons mentioned or other.

I only have Vanguard for my brokerage but have half my funds elsewhere that are unlikely to also be locked should Vanguard choose to do so.

I agree that it's "nice" having everything in one place, but it has a price.

I'm one that was locked out of my brokerage account. When my father's estate did a TOD to my brokerage the Commonwealth of Pennsylvania locked the entire account. I had a lot more money in there than his estate but they don't have any sense of humor about that.

My career was developing and supporting applications used by the fund industry. I've seen things happen. They don't tell you about them.

I will deal with the inconvenience of two separate providers.

 

[rk911]

I'm in the K.I.S.S. camp. OP...Make the transfer

 

[Koolau]

I'm one that was locked out of my brokerage account. When my father's estate did a TOD to my brokerage the Commonwealth of Pennsylvania locked the entire account. I had a lot more money in there than his estate but they don't have any sense of humor about that.

My career was developing and supporting applications used by the fund industry. I've seen things happen. They don't tell you about them.

I will deal with the inconvenience of two separate providers.

Thanks. I knew there were some members who had been locked.

It happens.

 

[ShadowBloom]

Vanguard charges a $100 fee to close an account, in case that matters to you.

 

[Onda]

Fidelity Investments security is weaker than it should be because it does not support hardware security tokens for two-factor authentication and also does not appear to offer a simple verbal password for caller verification.

 

[Surewhitey]

We have ~9 different logins for various hsa, 401ks, pension, IRAs and brokerage / bank... Once we fully RE, we will likely get those down to half that, or more.

Why not keep a minimum amount to keep the other open? I've been refused access to various accounts for a day so it could be a problem... Not so far though.

 

[Surewhitey]

Fidelity Investments security is weaker than it should be because it does not support hardware security tokens for two-factor authentication and also does not appear to offer a simple verbal password for caller verification.

But allows biometrics as does Vanguard... At least on the app.

 

[COcheesehead]

But allows biometrics as does Vanguard... At least on the app.

There’s an entire Security Center on the Fidelity site and I encourage everyone to use all the features offered non the least the transfer lockdown.

 

[Onda]

But allows biometrics as does Vanguard... At least on the app.

An app still runs on a phone or device that can be compromised, cloned, or socially engineered, while a hardware token remains physically separate and far harder to defeat because an attacker must possess the device itself. I would rather transfer to for example Schwab or E*Trade which do not mind to support hardware tokens and verbal passwords.

 

[Onda]

There’s an entire Security Center on the Fidelity site and I encourage everyone to use all the features offered non the least the transfer lockdown.

Transfer Lockdown is useful, but it still assumes the login itself is legitimate—if someone gains authorized access to the account, they may first turn it off and then proceed, which is why login security remains the real first line of defense

 

[ncbill]

We like not putting all our eggs into one basket, and apply that practice not only to investment choices but also to where we hold assets.

More specific reasons to keep things as they are:

(1) Tech glitches affecting your account access at one brokerage.

(2) One brokerage deciding to protect you from yourself. https://www.bogleheads.org/forum/viewtopic.php?t=409234

(3) One brokerage locking you out of your account at the government's request. So far a couple of people have been locked out of their bank accounts right here in the U.S. (Scott Ritter but I forgot who else I read about), and that has also happened to the trucker convoy participants in Canada during COVID and various people in Europe.

(4) SIPC limits. You never really know.

P.S. - also (5), or maybe (1a), a fraudster managing to access your accounts using your own login credentials at one brokerage, and cleaning you out. There was a news story quite a while back where a man's niece gained access to his house while he was in the hospital, somehow discovered his login credentials, and cleaned out his investment account. The bank or brokerage resisted making him whole. Don't know if they ever did so.

Ritter had his accounts closed, which any financial institution can do at any time to any of us.

Given the nature of his criminal convictions I am not surprised the bank no longer wanted his business.

 

[mrfeh]

Fidelity Investments security is weaker than it should be because it does not support hardware security tokens for two-factor authentication and also does not appear to offer a simple verbal password for caller verification.

IMO, 2FA with a OTP app is more than sufficient, especially when login credentials are complicated.

 

[mrfeh]

Vanguard charges a $100 fee to close an account, in case that matters to you.

Fido will reimburse this fee.

 

[Texas Proud]

It might not matter but I was buying a preferred share and one broker would not let me buy but I was able to with another...

I might have been able to do so if I went down some rabbit hole but since I could buy at the other site I never did...

I have most of my money at Schwab as they had a better FA (free of course) but she went somewhere else... I have not talked to my new one... the Fidelity FA was not that good, but they now have more at the closest location and even more a a slightly further location... might have to check to see who I can get...

 

[COcheesehead]

IMO, 2FA with a OTP app is more than sufficient, especially when login credentials are complicated.

Over the years on different forums anyone who posted about their account getting hacked it was usually from them giving up their sign in unknowingly to someone in an email or over the phone. We are the weakest link.

 

[stephenson]

Vanguard charges a $100 fee to close an account, in case that matters to you.

Not sure this is closing an account - as the holdings are a mix of Vanguard mutual funds and stocks - would be interesting to see.

 

[mrfeh]

Not sure this is closing an account - as the holdings are a mix of Vanguard mutual funds and stocks - would be interesting to see.

If you're transferring the account, it will be closed. Doesn't matter what the holdings are.

 

[stephenson]

Hmmm - so, seems like biggest concern in that of losing access for x period of time?

So, maybe use Schwab as a second location only for taxable cash? SNAXX? Simple solution to having enough JIC of some strange other occurrence?

 

[stephenson]

If you're transferring the account, it will be closed. Doesn't matter what the holdings are.

That would be fun - then I could really write some interesting things for the world to see