Author Topic: Multiple brokerage accounts  (Read 3207 times)

lclyman

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Multiple brokerage accounts
« on: July 13, 2016, 09:22:30 AM »
Hi Mustachians,
I currently have my investment accounts spread out over 2 brokerage houses (Vanguard and Schwab)...

Is there any compelling reason not to simply combine everything in one account. I mean I certainly understand and implement diversification in my investments, but is there any reason to do the same with where I hold them?

Thanks,
LC

Secretly Saving

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Re: Multiple brokerage accounts
« Reply #1 on: July 13, 2016, 09:52:08 AM »
I'm considering consolidating but we have a ton of different accounts (10+) because of various moves and jobs.  For me it's just about less paper and less chaos!  Plus if I died it would make it easier for family to have things in fewer places.

Laserjet3051

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Re: Multiple brokerage accounts
« Reply #2 on: July 13, 2016, 10:14:44 AM »
Many brokerage firms have an exit fee as a deterrent to pulling your cash. Depending on this cost and the value of consolidating, one's calculation of whether its worth it may vary from person to person/ brokerage to brokerage.

StarBright

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Re: Multiple brokerage accounts
« Reply #3 on: July 13, 2016, 10:36:17 AM »
Iclyman - I just came to the boards looking for the answer to the exact same question (and same two brokerages as well)!

FWIW - Schwab did confirm that there would be fees to transfer but said a different CS rep would have to get back to me with the exact numbers.

When I compared similar funds between the two the Vanguard were just performing better. We opened our Schwab accounts back when we couldn't meet the minimum on Vanguard funds. But now we put everything into the Vanguard ones and the CS just sits there - unfed and unloved.

johnny847

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Re: Multiple brokerage accounts
« Reply #4 on: July 13, 2016, 10:42:58 AM »
One reason is it's hard to find Admiral shares of Vanguard funds outside of Vanguard. I have a Schwab account that I don't use, and I just tried it to confirm---you can't buy VTSAX from that account. Of course, you can work around this by buying Schwab index funds instead.

If you're really that concerned about it, you should be aware that the SIPC insures up to $500k per person per brokerage account. The SIPC does not protect the value of your securities against drops in market value, but it does protect you if your brokerage goes bankrupt.

Parkingmeter

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Re: Multiple brokerage accounts
« Reply #5 on: July 13, 2016, 04:16:20 PM »
Reason for multiple brokerages: bonuses. Typically something like $500 for new money transfer services over 100k. Or 50k airline miles. People have been able to cycle these once a year.

Vanguard doesn't charge fees, but I've seen others typically charge $75 for full transfers out (obviously depends on the brokerage,  please look at your fees. Also, you should do an in kind transfer to avoid tax consequences)

a1smith

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Re: Multiple brokerage accounts
« Reply #6 on: July 16, 2016, 01:40:03 PM »
Reason for multiple brokerages: bonuses. Typically something like $500 for new money transfer services over 100k. Or 50k airline miles. People have been able to cycle these once a year.

Vanguard doesn't charge fees, but I've seen others typically charge $75 for full transfers out (obviously depends on the brokerage,  please look at your fees. Also, you should do an in kind transfer to avoid tax consequences)

Most brokerage accounts don't charge for a partial transfer.  So, you transfer all of your stocks/funds/ETFs except one you want to do TLH on.  Sell that one, transfer the cash, and close the account.  If nothing has loss, then compare transfer fee with taxes owed on smallest gain to see which way to go.

johnny847

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Re: Multiple brokerage accounts
« Reply #7 on: July 16, 2016, 02:16:16 PM »
Reason for multiple brokerages: bonuses. Typically something like $500 for new money transfer services over 100k. Or 50k airline miles. People have been able to cycle these once a year.

Vanguard doesn't charge fees, but I've seen others typically charge $75 for full transfers out (obviously depends on the brokerage,  please look at your fees. Also, you should do an in kind transfer to avoid tax consequences)

Most brokerage accounts don't charge for a partial transfer.  So, you transfer all of your stocks/funds/ETFs except one you want to do TLH on.  Sell that one, transfer the cash, and close the account.  If nothing has loss, then compare transfer fee with taxes owed on smallest gain to see which way to go.

That's a neat trick =)

MustacheAndaHalf

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Re: Multiple brokerage accounts
« Reply #8 on: July 16, 2016, 05:48:20 PM »
Related question:
Has anyone transferred mutual funds to Vanguard, and had their cost basis copied over to their Vanguard account?

Spork

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Re: Multiple brokerage accounts
« Reply #9 on: July 16, 2016, 06:29:20 PM »
Related question:
Has anyone transferred mutual funds to Vanguard, and had their cost basis copied over to their Vanguard account?

I came here to ask exactly this question...

Choices

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Re: Multiple brokerage accounts
« Reply #10 on: July 16, 2016, 11:09:17 PM »
When we moved our accounts to Fidelity, they reimbursed us the account closing fees at the other firm. It might be worth asking Vanguard if they'll do the same.

Parkingmeter

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Re: Multiple brokerage accounts
« Reply #11 on: July 17, 2016, 03:35:03 PM »
Related question:
Has anyone transferred mutual funds to Vanguard, and had their cost basis copied over to their Vanguard account?

I've done this from vanguard to HSBC, and from HSBC to Fidelity. Cost basis doesn't change as long as it's an in-kind transfer.

johnny847

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Re: Multiple brokerage accounts
« Reply #12 on: July 17, 2016, 05:13:32 PM »
Related question:
Has anyone transferred mutual funds to Vanguard, and had their cost basis copied over to their Vanguard account?

I've done this from vanguard to HSBC, and from HSBC to Fidelity. Cost basis doesn't change as long as it's an in-kind transfer.

I think you're implying here that the cost basis information transfered over just fine, but that's not what your words mean. Of course the cost basis doesn't change in an in kind transfer; there's no sale of any securities. But they weren't asking about whether the cost basis changes in an in kind transfer, but whether vanguard was informed of their securities' cost bases.