Author Topic: Switch to Vanguard  (Read 5847 times)

jeffpickens

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Switch to Vanguard
« on: May 12, 2014, 02:08:33 PM »
I am thinking about switching to Vanguard (401k-Roth IRA) from Fidelity.

All of my Fidelity money was invested/growing from shares that I bought '08-10 (cheap shares)

Does it make sense to move all my money to Vanguard now and buy index funds in the current (expensive) market?

Eurotexan

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Re: Switch to Vanguard
« Reply #1 on: May 12, 2014, 03:22:49 PM »
I transferred all my retirement funds (about $150K) from Fidelity to Vanguard a few weeks ago. The process was pretty easy. I had the same concerns but really you are selling and then buying in the same market, well, within about a week. You will make money off the shares you bought when they were cheap and buying the index funds at the same level. What you might want to do is sell at your own pace. Once I submitted the request to Vanguard it took about 2 weeks and then one day I logged into Fidelity and all my shares were sold in one day. If the stocks are very volatile you might want to time it but in the grand scheme of things it probably doesn't make much difference. Good luck!

Eric

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Re: Switch to Vanguard
« Reply #2 on: May 12, 2014, 04:34:08 PM »
I don't have a Fidelity account, but I thought you could purchase Vanguard EFTs through Fidelity w/o a fee.  Have you looked into that?  There are lots of people around here with Fidelity accounts.  Hopefully one of them will chime in.

Another Reader

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Re: Switch to Vanguard
« Reply #3 on: May 12, 2014, 05:59:18 PM »
Not really.  Fidelity and Vanguard are very competitive.  Fidelity offers a series of index funds, the Spartan series.  They are priced about the same.  If you want index funds, there is no need to move.  Fidelity has a far superior website and has bricks and mortar offices in most large cities.  Overall, their customer service is better, although Vanguard has been improving.

You can purchase a lot of no-commission ETF's through Fidelity, but not Vanguard ETF's.  The indexes used by Vanguard are in a number of cases different than the indexes used by other ETF providers. The ETF performance is also different.  Compare the ETF's using the Fidelity comparison tool.

I have money invested at both companies, but I prefer Fidelity.

SDREMNGR

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Re: Switch to Vanguard
« Reply #4 on: May 12, 2014, 06:06:34 PM »
DON'T DO IT!!!!

I did just that and I have been regretting it every day.  The only benefit that I have seen is that Vanguard doesn't have a minimum hold of 1 month for free trades of their etfs and funds.  Otherwise, Fidelity has slightly cheaper funds and etfs.  Their sector etfs are 0.12% vs 0.14% for Vanguard, and there are some other funds that are relatively cheaper.

Also, Fidelity's website is much easier to use.  Vanguard has a weird 2 account setup for each account you have.  One is a Vanguard fund account and the other is a brokerage account.  It's confusing and silly.  Also, trading is confusing on their website.

Most frustrating of all are the Vanguard customer service reps.  I have been on the phone with them over dozen times for various problems from bank transfer, to account set up, etc.  I don't know why but all of them seem slightly stoopid or just slightly rude.  Fidelity's reps always seem more polished and friendlier and always get the issues resolved for me.  Vanguard's reps always seem angry or bored or just negative.  They also put you on obscenely long holds with no music so after 10 min, I don't know if I'm still on hold or not.

Anyhow, I'd go back to Fidelity except that my company has it's IRA with them and my parents now, thanks to me... :(  and so on so it's a big hassle to switch back.

But if you can choose to stay with Fidelity, do it!

Frankies Girl

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Re: Switch to Vanguard
« Reply #5 on: May 12, 2014, 06:13:52 PM »
DON'T DO IT!!!!

I did just that and I have been regretting it every day.  The only benefit that I have seen is that Vanguard doesn't have a minimum hold of 1 month for free trades of their etfs and funds.  Otherwise, Fidelity has slightly cheaper funds and etfs.  Their sector etfs are 0.12% vs 0.14% for Vanguard, and there are some other funds that are relatively cheaper.

Also, Fidelity's website is much easier to use.  Vanguard has a weird 2 account setup for each account you have.  One is a Vanguard fund account and the other is a brokerage account.  It's confusing and silly.  Also, trading is confusing on their website.

Most frustrating of all are the Vanguard customer service reps.  I have been on the phone with them over dozen times for various problems from bank transfer, to account set up, etc.  I don't know why but all of them seem slightly stoopid or just slightly rude.  Fidelity's reps always seem more polished and friendlier and always get the issues resolved for me.  Vanguard's reps always seem angry or bored or just negative.  They also put you on obscenely long holds with no music so after 10 min, I don't know if I'm still on hold or not.

Anyhow, I'd go back to Fidelity except that my company has it's IRA with them and my parents now, thanks to me... :(  and so on so it's a big hassle to switch back.

But if you can choose to stay with Fidelity, do it!

+1

I love Fidelity, and all of my accounts are there. As long as you avoid the professional management services and high fee funds, it's as good as Vanguard, and Fid's customer service, website interface and apps are better than Vanguard from what I've read/heard - I have never had anything but stellar service from them.

http://www.bogleheads.org/wiki/Fidelity

« Last Edit: May 12, 2014, 06:20:30 PM by Frankies Girl »

Jack

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Re: Switch to Vanguard
« Reply #6 on: May 12, 2014, 06:46:32 PM »
shares that I bought '08-10 (cheap shares) ... index funds in the current (expensive) market?

Share prices of index ETFs or mutual funds are irrelevant. The same amount of money buys the same amount of underlying stock either way. You can trade 148.43 shares of FUSEX at $67.37/share for 57.62 shares of VFINX at $173.55/share (or vice-versa), and either way your investment is worth exactly the same $10,000.

Selling appreciated shares and then re-buying a similar asset as part of switching IRA or 401k trustees is also irrelevant because there's no cost basis unless you've made non-deductible contributions.

On the topic of Fidelity vs Vanguard: I philosophically prefer Vanguard because they keep their expenses low because the business is structured as a co-op and it's in my best interest, while Fidelity keeps expenses low on their Spartan funds only because they have to in order to compete and because they hope to up-sell you on management services and whatnot. However, if Fidelity has practical advantages as others have asserted, I won't argue about it.

Scandium

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Re: Switch to Vanguard
« Reply #7 on: June 13, 2014, 06:47:26 AM »
shares that I bought '08-10 (cheap shares) ... index funds in the current (expensive) market?

On the topic of Fidelity vs Vanguard: I philosophically prefer Vanguard because they keep their expenses low because the business is structured as a co-op and it's in my best interest, while Fidelity keeps expenses low on their Spartan funds only because they have to in order to compete and because they hope to up-sell you on management services and whatnot. However, if Fidelity has practical advantages as others have asserted, I won't argue about it.

This is the only reason I'm considering switching to Vanguard from Schwab, but I'm not sure it's worth it? I like that I have my checking/savings account in the same place and on the same page as my roth and brokerage account. Although maybe that's a bad thing since I see it a lot..? It also only takes 2 min to throw some money from checking at an ETF on a day it's down. Maybe market timing, but also tricking myself into saving more in addition to my auto transfers. Initially got schwab because of the no-ATM banking and lower minimums than vanguard but now I have enough to get admiral shares. 

Schwab is a nice website, good services, low fees and no commissions on their funds and it has my bank. But they're a for profit, Vanguard is a co-op.. Worth it to switch? There is also the cost of selling in a taxable account.

rmendpara

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Re: Switch to Vanguard
« Reply #8 on: June 13, 2014, 11:19:45 AM »
Unless you have some reason to prefer Vanguard, Fidelity is also an excellent fund family. They have some very cheap index funds as well as a series of actively managed funds (if that's what you want) and a brokerage arm.

In the long term, I plan to split assets between the two to spread my eggs a bit and also just to keep the relationship open with two great fund companies.

Another Reader

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Re: Switch to Vanguard
« Reply #9 on: June 13, 2014, 11:34:21 AM »
Schwab offers a number of index funds and ETF's plus the services you mention.  Unless you want to buy products not sold there or sold only at high fees, the checking and other conveniences you like would make it worthwhile to stay with them.  I have accounts at Schwab and I like their web platform.  Like Fidelity, they have offices where you can visit your money and have an eyeball to eyeball conversation if something goes wrong with the paperwork.  Vanguard does not have that and resolving problems can be time-consuming, although their service seems to be improving.

Tyler

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Re: Switch to Vanguard
« Reply #10 on: June 13, 2014, 11:38:15 AM »
I think many people have the false impression that you need to have a Vanguard account to buy Vanguard funds. 

Fidelity is an excellent company, with a great assortment of low-cost index funds (and actively managed funds if you're so inclined).  I've never had a poor experience with them.  And you can absolutely buy Vanguard funds if you like -- I own some VTI myself.


Scandium

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Re: Switch to Vanguard
« Reply #11 on: June 13, 2014, 02:22:51 PM »
Yes I know I can buy Vanguard ETFs, or even funds. Only $9 per trade for ETFs, but now $70 or something to buy an outside fund! (Used to be $35 per buy/sell I think).

I'm dumping in an extra $30k soon, and was debating putting some into VTI in addition to what I already put into Schwab's SCHB. As someone mentioned above; to spread it around a bit. It'll make my statement page even longer and more confusing, but maybe good as a just-in-case. I know some Bogleheads have technical issues with Schwab's funds vs Vanguard; spreads, AUM etc, but I honestly can't be bothered and it isn't worth it to me to worry about. 

I'll open a 529 with Vanguard soon, so maybe I'll see how they are then and consider whether or not to switching the rest over.