Author Topic: Have some questions about moving away from financial advisor  (Read 2519 times)

dave__

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Hey MMM,

I have recently been digging in and figuring out what my financial advisor (FA) has been doing with my accounts. I have learned that my money is spread out across numerous funds which is good, but many of them have really high Expense Ratios that are killing the gains.

I currently have five accounts with my FA and want to move them all over to Vanguard. I have:
-my IRA account
-wife's IRA account
-my Roth account
-wife's Roth account
-brokerage account

I know that I can rollover the first four accounts over to Vanguard without paying any fees (hopefully there are no termination fees with my current broker), but what I am most concerned about is the brokerage account.

Within that account, there are the following funds (and expense ratios):
KNPCX (2.39% - yikes!)
NMUCX (1.85%)
VADCX (1.31%)
WASCX (1.68%)
WSSCX (1.35%)

All of these are C-class shares which will have a back-end fee of probably 1% (only on the recent share purchases of the last year which is probably a decent chunk of it).

With that, I have three questions:
1) How do I go about initiating the transfer for the brokerage account? Do I have my FA close the account and "cash out" the shares? Then purchase with Vanguard?
2) This will be my first time paying capital gains taxes as I have never sold shares before, is there a way to minimize the taxes here since I will be re-investing immediately? (I think I know the answer: no. But would like confirmation)
3) In regards to minimizing future tax burden and correctly setting up new Vanguard accounts, how should I structure my asset allocation across accounts? It is better to do equities or bonds in a tax-advantaged account? Or do I maintain my desired AA across all accounts individually?

Thanks so much!!
Dave

nobody123

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Re: Have some questions about moving away from financial advisor
« Reply #1 on: July 16, 2015, 10:32:02 AM »
Call Vanguard, they'll walk you through all of the mechanics of transferring your accounts.  IIRC, they fronted the account transfer fees from my old broker and didn't recoup them until I sold something.  You can initiate all of the stuff online, but you might want to call just to double-check on your specific circumstance.

James

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Re: Have some questions about moving away from financial advisor
« Reply #2 on: July 16, 2015, 10:37:39 AM »
I just called Vanguard and they walked me through the whole process, so much more professional and helpful than my FA.


Having said that, nothing wrong with having your FA help if you wish. He can help provide information and do what he can. Or just a heads up ahead of time might be nice. But usually they put the pressure on and try to talk you out of it, so it might be best just to make the transfers with Vanguards help and then let him know.

RoseRelish

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Re: Have some questions about moving away from financial advisor
« Reply #3 on: July 16, 2015, 11:12:43 AM »
I third calling Vanguard and having them walk you through the process. I've had nothing but good interaction with them.

dave__

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Re: Have some questions about moving away from financial advisor
« Reply #4 on: July 16, 2015, 11:58:44 AM »
Thanks for the input! I'll call Vanguard directly - however, will they be able to give me advice on all three of the questions I've posed above?

forummm

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Re: Have some questions about moving away from financial advisor
« Reply #5 on: July 16, 2015, 03:28:37 PM »
1) Vanguard can initiate
2) No--next time buy better funds (i.e. Vanguard like you're going to) and hold them forever
3) Generally put your bonds in tax-advantaged if possible. You do not need to balance each account's AA--just across all your holdings.

MDM

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Re: Have some questions about moving away from financial advisor
« Reply #6 on: July 16, 2015, 06:24:15 PM »
3) In regards to minimizing future tax burden and correctly setting up new Vanguard accounts, how should I structure my asset allocation across accounts? It is better to do equities or bonds in a tax-advantaged account? Or do I maintain my desired AA across all accounts individually?

Go to http://www.bogleheads.org/forum/, type  asset allocation  in the search box (upper right), and go from there.