Author Topic: Edward Jones to Vanguard - What am I doing/have I done wrong?  (Read 3402 times)

onlykelsey

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Hi guys,

I just did something sort of stupid that I'm not sure is capable of being untangled, but here goes.

I finally bit the bullet on transfer my taxable and Roth IRA account from Edward Jones to Vanguard.  The investments showed up (in kind) a couple days ago.  I knew this was the correct economic choice but dragged my feet because I felt bad for the nice lady at Edward Jones.

Anyway, now about 18K in high fee bad investments in my Roth IRA are in my Vanguard Roth IRA, and another 5K in my taxable account.

I have, sort of willy nilly, just started selling the crap investments (with an eye towards buying low-cost Vanguard funds when they settle).

I'm just now realizing I have created capital gain and loss without thinking about it, and have no idea what that means in either account.  Thoughts?

tarheeldan

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Re: Edward Jones to Vanguard - What am I doing/have I done wrong?
« Reply #1 on: April 14, 2016, 01:14:41 PM »
Your Roth is tax sheltered, so no worries there.

In taxable, there will be some impact and you should figure out your cost basis. Since it's some fraction of 5k that you sold, at x% tax rate if there were s-t/l-t capital gains, probably then number won't be so concerning.

forummm

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Re: Edward Jones to Vanguard - What am I doing/have I done wrong?
« Reply #2 on: April 14, 2016, 01:41:40 PM »
Ideally you would have had EJ sell the funds before you transferred the resulting cash. But now that they are already transferred, just sell the funds and move on. You might have some fees from VG to sell EJ funds.

onlykelsey

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Re: Edward Jones to Vanguard - What am I doing/have I done wrong?
« Reply #3 on: April 14, 2016, 04:05:41 PM »
Thanks, both of you.  I honestly haven't thought about how much I have in gains, but most of it has only been in there for ~3 years and the fees were so high I doubt there was much. I think some may have backended fees, but it's a sailed ship at this point, so I'll just look at the amount that's settled in my MM fund in a few days and go from there.

Taxes on 5K (say there was 500 of gain) isn't something I'm losing sleep over.  Lesson learned, though. I need to go reread bogleheads on efficiently allocating investments in tax-sheltered and taxable accounts and start thinking about making some moves.

whitetailugys

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Re: Edward Jones to Vanguard - What am I doing/have I done wrong?
« Reply #4 on: April 14, 2016, 05:43:07 PM »
Re: Ideally you would have had EJ sell the funds before you transferred the resulting cash

Msg: That's not what Vanguard asked me to do. They said move it over and then sell. I've read elsewhere this is the way to go.

I'm in the same boat except I haven't moved my funds yet. Like to know what is what after hearing this from a guy I love hearing from on this forum.

onlykelsey

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Re: Edward Jones to Vanguard - What am I doing/have I done wrong?
« Reply #5 on: April 14, 2016, 05:50:51 PM »
Msg: That's not what Vanguard asked me to do. They said move it over and then sell. I've read elsewhere this is the way to go.

That's what they told me, as well.  For me, also, I didn't want to deal with EJ because I am a wuss, so it worked out well.

Indexer

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Re: Edward Jones to Vanguard - What am I doing/have I done wrong?
« Reply #6 on: April 17, 2016, 02:00:20 PM »
Ideally you would have had EJ sell the funds before you transferred the resulting cash. But now that they are already transferred, just sell the funds and move on. You might have some fees from VG to sell EJ funds.

This might be the first time I ever disagree with forummm ;) , but I actually agree with transferring in kind.

Brokerage fees will almost always be cheaper at Vanguard than EJ, and by transferring to Vanguard first you can look at the capital gains before doing a sell. That is why Vanguard told you to transfer in kind.

EJ likes to use A shares with big front in loads. Those normally don't have a brokerage fee to sell at Vanguard. Now stocks and ETFs will often times cost 4-5% OR $50(whichever is more) to sell at Jones. It is only $7 at Vanguard. So 9/10 it is better to transfer in kind and sell at Vanguard.

Sometimes a managed account like the ones you will see a lot at Merrill, Morgan Stanley, etc. but rarely at EJ will have free trades since you are paying a AUM fee. In those cases it is cheaper to sell at the original firm and then transfer in kind.

MustacheAndaHalf

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Re: Edward Jones to Vanguard - What am I doing/have I done wrong?
« Reply #7 on: April 17, 2016, 06:38:18 PM »
Now that you've sold, try and get into your Edward Jones account to lookup past information on your purchases.  How much money did you spend in taxable to buy those investments?  You might look for a "cost basis" report.  Or failing that, scan through annual / quarterly / monthly statements looking for when you made the purchase.  Getting these records soon, before your account is gone, may help you later determine the taxes you owe.