rebalance then move, or vice versa?

[BarbWire]

I am planning to move a brokerage account containing Vanguard ETFs to Schwab. The wrinkle is that it is also time to rebalance my holdings.

Assume the VG account holds VTI, VXUS and BND. The goal is to get to somwehere around 40% / 20% / 40% and right now it is very heavy in equities.

Do I:

1) Rebalance within VG and then move the brokerage account/VG equities to Schwab?

2) Sell the desired shares for rebalancing within VG, move the brokerage account, remaining VG equities and cash to Schwab, and then buy equivalent Schwab ETFs?

In the latter case the brokerage account would then hold, for example, both VTI and SCHB for the domestic total stock portion.

The advantage I see in the second approach is that, for future rebalancing I could sell the Schwab ETF and thus reduce fees, maybe. The disadvantage is that the number of ETFs held would increase. I don't think there are any tax implications for one approach over the other.

Thanks!

 

[bloom2708]

Can you rebalance in your 401k, Traditional IRA or Roth IRA?

Probably not enough information to help.

What are your long term gains/short term gains in the taxable brokerage? Determine the tax consequences of selling/rebalancing. Usually best to transfer "In kind" if possible, but if you are going to sell/rebalance, it is probably easier to do at Vanguard.

I would not move from Vanguard to Schwab. Not enough difference.

 

[OldShooter]

I would move in kind then sort everything out at Schwab. That way if something gets screwed up I have Schwab to handle it, rather than getting stuck at VG until it gets fixed.

 

[target2019]

Your vanguard ETF will transfer in kind and can be bought/sold for no additional fees.

Rebalance according to your plan.

 

[sgood]

"...Sell the desired shares for rebalancing within VG, move the brokerage account, remaining VG equities and cash to Schwab, and then buy equivalent Schwab ETFs?"

Not sure why you'd buy equivalent, if VG options are available at Schwab.

I agree, transfer in kind to Schwab, wait for the basis to display properly, then rebalance.

Mostly wanted to mention, don't forget to sign up your account for the current Schwab promo. I guess they'll match other promotions if you feel like digging for something better and interacting with Schwab personnel.

Charles Schwab

 

[RetiredHappy]

Schwab should have the same VG options and you can just move over straight from Vanguard over to Schwab. There should not be additional fees to hold Vanguard ETFs in Schwab. The main thing that I look for is expense ratio and performance for equivalent ETFs. If they are similar, I don't bother to swap. You can rebalance in Schwab after the move, or before. It doesn't make a difference, unless you are trying to time the market.

 

[Exit 2024]

I would move "as is" and then rebalance at Schwab.

Reason is that as soon as you transfer your Vanguard account out - they will close it and you will loose access to transaction history. Cost basis should move to the Schwab but not transactions itself and errors do happen. Also if you have partial shares - Vanguard will sell them and transfer cash. That would be a small amounts but still.

Just did about the same 3 weeks ago - logged in yesterday and my brokerage with all the history is gone. I would be more comfortable to do everything at the destination as your rebalancing would be taxable event for 2024.

 

[BarbWire]

thank you, all. I will transfer "as is" and then decide what I want to rebalance into.

So my next step is to document the cost basis of these holdings before transferring "as is" -- one of my MANY complaints about VG is that they made a horrible mess of cost basis when I did the one-time shift from mutual funds to the comparable ETFs years ago.

 

[pb4uski]

Yes. Before you do the transfer, for taxable accounts save to pdfs your cost basis information from Vanguard in case it gets screwed up during the move. Then check that Schwab has the correct cost basis information once the in-kind transfer is completed.

IMO, nothing wrong in staying in VTI, et al if that is what you prefer.

 

[Badger]

Since you are "planning" to move from Vanguard to Schwab it would be a good idea to gather all information (number of shares, value of those shares before you move them, cost basis, even history for the past year) from Vanguard and print everything. Sit down with Schwab to develop a plan for the move, changes to the investments, and rebalancing. Then have Schwab initiate the move. They would be happy to help and more than likely be the most expedient since they are the ones to benefit with a new account.
Once the investments are moved to Schwab you will already have a plan for any changes you want to make and a firm to help you.

 

[pb4uski]

Barb, is there a Schwab office near you?

 

[OldShooter]

Since you are "planning" to move from Vanguard to Schwab it would be a good idea to gather all information (number of shares, value of those shares before you move them, cost basis, even history for the past year) from Vanguard and print everything. Sit down with Schwab to develop a plan for the move, changes to the investments, and rebalancing. Then have Schwab initiate the move. They would be happy to help and more than likely be the most expedient since they are the ones to benefit with a new account.
Once the investments are moved to Schwab you will already have a plan for any changes you want to make and a firm to help you.

YMMV. I am more of an "eat the elephant a bite at a time" project manager. I would get whatever basis or other information needed at VG, then initiate the in-kind transfer. Once that was complete, all hostages accounted for, I would then move to buy, sell, and sort out the assets in the Schwab account. There is really no urgency for this second phase and it can be done with any help needed from your newly-assigned personal rep. It would be a good way to get to know each other.

 

[BarbWire]

Barb, is there a Schwab office near you?

Nope. I'm a nomad. This week in NJ, next week in Canada.... I have to set up all my relationships by phone,chat and email. I have had dealings with Schwab over the years (small brokerage account there) and have been impressed by their customer service by phone and chat -- much more competent that VG or Fido!

 

[BarbWire]

Thanks everyone. Since I will be moving "in kind" I have no actions to take at VG other than documenting the cost basis, 2024 transactions,etc. I'll connect with a Schwab rep (a couple have been suggested to me), phone interview 'em, and initiate the (fully documented) in-kind transfer from VG.

After that is done (correctly) and the dust has settled, I will work on my rebalancing out of the Schwab account. It will be a bit later than my usual mid-summer rebalance, but better done late properly than on-time with VG hiccups.

 

[RetiredHappy]

Don't forget to ask for a bonus from Schwab for the transfers, presumably above $1M. Each million should get you a larger bonus.

 

[BarbWire]

Don't forget to ask for a bonus from Schwab for the transfers, presumably above $1M. Each million should get you a larger bonus.

Yep, Schwab Investor Rewards. Unfortunately, the increments are pretty "lumpy" but they're good.