Author Topic: Getting Rid of the Investment Advisor  (Read 6595 times)

Tracyl-5

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Getting Rid of the Investment Advisor
« on: March 22, 2018, 08:11:43 PM »
I was with Merrill Lynch for a few years before I found the personal finance blog world.  Since discovering how easy it is to manage my own investments, I have made my contributions to my own Vanguard accounts and funds, and have wanted to get rid of the financial advisor. 

I've finally been able to roll my managed investment accounts (IRA, Roth, & Simple) into the self-managed Merrill Edge platform.  Now I need to simplify.  I'm able to do 100 free trades per month due to being in their Preferred Awards Program, and the plan is to sell all these funds with high expense ratios and individual stocks and buy VTSAX. 

My questions are: 
Are there any considerations that I should take on when to sell? 
Do you have any advice on the process for doing this? 
When it comes to the individual stocks (all in the Simple), should I sell them all or should I keep any? 

My ultimate plan is to roll these accounts over to my Vanguard accounts once I've got all the money converted to VTSAX (or mostly).

I can give you a list of all the funds/stocks, but there's dozens in each account and I wasn't sure if it would be helpful considering my goal is getting to Vanguard.

StockBeard

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Re: Getting Rid of the Investment Advisor
« Reply #1 on: March 22, 2018, 09:24:34 PM »
Are there any considerations that I should take on when to sell? 
Taxes on capital gain + how much that capital gain will increase your overall income for the year, which could put part of your salary in a higher tax brackets.
In other words: if you sell too much in a given year, you might screw yourself from a tax perspective, so you might want to run some simulations on that.

Tracyl-5

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Re: Getting Rid of the Investment Advisor
« Reply #2 on: March 23, 2018, 12:02:18 AM »
These are all in retirement accounts (IRA, Roth IRA, Simple IRA), so I wouldn't have to worry about capital gains, would I?

Mighty-Dollar

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Re: Getting Rid of the Investment Advisor
« Reply #3 on: March 23, 2018, 04:28:52 PM »
Post the names of the investments you are in.

Tracyl-5

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Re: Getting Rid of the Investment Advisor
« Reply #4 on: March 23, 2018, 05:18:38 PM »
Okay, here are the investments in my accounts:
All told, about $150K...

IRA
IWD - ISHARES RUSSELL 1000:  18 Shares
IWF - ISHARES RUSSELL 1000:  18 Shares
WFSVX - WELLS FARGO SMALL CAP:  112.411 Shares
DGAGX - DREYFUS APPRECIATION FUND:  98.914 Shares
PTTPX - PIMCO TOTAL RETURN FUND:  351.871 Shares
TGLMX - TCW TOTAL RETURN:  395.432 Shares
AIAHX - AMERICAN CENTURY:  154.896 Shares
DGCIX - DELAWARE CORPORATE BOND:  405.356 Shares
STRYX - PIONEER STRATEGIC:  268.64 Shares
EIBLX - EATON VANCE FLOATING:  274.285 Shares
HAINX - HARBOR INTERNATIONAL:  24.676 Shares
MADVX - BLACKROCK EQTY DIVIDEND:  200.523 Shares
OAKIX - OAKMARK INTL FUND:  68.546 Shares
MRSIX - MFS RESEARCH:  116.536 Shares
SBPYX - CLEARBRIDGE SMALL CAP:  49.469 Shares
TGCEX - TCW SELECT:  167.884 Shares
JCVIX - JOHN HANCOCK CLASSIC:  98.613 Shares
HGOIX - HARTFORD GROWTH:  79.763 Shares
MEIIX - MFS VALUE FD CL I:  101.273 Shares

ROTH
IWD - ISHARES RUSSELL 1000:  19 Shares
IWF - ISHARES RUSSELL 1000:  24 Shares
DGAGX - DREYFUS APPRECIATION FUND:  103.047 Shares
WFSVX - WELLS FARGO SMALL CAP:  111.076 Shares
PTTPX - PIMCO TOTAL RETURN FUND:  409.348 Shares
AIAHX - AMERICAN CENTURY:  120.133 Shares
STRYX - PIONEER STRATEGIC:  231.503 Shares
TGLMX - TCW TOTAL RETURN:  227.171 Shares
EIBLX - EATON VANCE FLOATING:  226.906 Shares
MADVX - BLACKROCK EQTY DIVIDEND:  248.829 Shares
HAINX - HARBOR INTERNATIONAL:  40.786 Shares
OAKIX - OAKMARK INTL FUND:  118.072 Shares
SBPYX - CLEARBRIDGE SMALL CAP:  51.83 Shares
TGCEX - TCW SELECT:  185.18 Shares
MRSIX - MFS RESEARCH:  180.741 Shares
HGOIX - HARTFORD GROWTH:  94.765 Shares
JCVIX - JOHN HANCOCK CLASSIC:  101.938 Shares
MEIIX - MFS VALUE FD CL I:  120.378 Shares

SIMPLE
SSYS - STRATASYS:  7 Shares
DRQ - DRIL QUIP:  6 Shares
RRC - RANGE RESOURCES CORP:  6.0843 Shares
DISCA - DISCOVERY COMMUNICATIONS:  12 Shares
FLS - FLOWSERVE CORP:  6 Shares
DISCK - DISCOVERY COMMUNICATIONS:  8 Shares
CLR - CONTINENTAL RESOURCES:  12 Shares
NVLN - NOVELION THERAPEUTICS:  3 Shares
CMI - CUMMINS INC COM:  4 Shares
ALXN - ALEXION PHARMS INC:  4 Shares
AMG - AFFILIATED MANAGERS GRP:  3.0187 Shares
NUE - NUCOR CORPORATION:  12 Shares
CPA - COPA HOLDINS S A CL A:  4.6493 Shares
JAZZ - JAZZ PHARMACEUTICALS:  4 Shares
LVS - LAS VEGAS SANDS CORP:  4 Shares
CXO - CONCHO RESOURCES INC:  5 Shares
CCI - CROWN CASTLE REIT INC:  7.1151 Shares
REGN - REGENERON PHARMACTCLS:  2 Shares
ALK - ALASKA AIR GROUP INC COM:  17 Shares
UBNT - UBIQUITI NETWORKS INC:  16 Shares
COST - COSTCO WHOLESALE CRP:  7 Shares
GOOGL - ALAPHEBET INC SHS CL A:  1 Share
ILMN - ILLUMINA INC COM:  4 Shares
NXPI - NXP SEMICONDUCTORS N.V.:  10 Shares
SPLK - SPLUNK INC:  11 Shares
URI - UNITED RENTALS INC COM:  6 Shares
SIVB - SVB FINL GROUP:  6 Shares
AVGO - BROADCOM LTD:  5.4953 Shares
LRCX - LAM RESEARCH CORP COM:  9 Shares
IDXX - IDEXX LAB INC DEL:  10 Shares
IPGP - IPG PHOTONICS CORP DEL:  12 Shares
AMZN - AMAZON COM INC COM:  3 Shares
« Last Edit: March 23, 2018, 05:34:44 PM by Tracyl-5 »

Rob_bob

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Re: Getting Rid of the Investment Advisor
« Reply #5 on: March 24, 2018, 07:09:30 PM »
Holy Begeeeezus there are a lot of positions.  Your broker must have churned some nice commissions from you.  And I'll bet there is a lot of overlap in holdings too.  And I like bright and shiny things myself LOL.

You could reduce that to a basic 3-4 fund portfolio, or maybe large, mid, small Cap Blend funds, some foreign funds either total non US or maybe developed market fund, a REIT fund and some short term bonds if you need the ballast.

Tracyl-5

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Re: Getting Rid of the Investment Advisor
« Reply #6 on: March 24, 2018, 07:14:38 PM »
Holy Begeeeezus there are a lot of positions.  Your broker must have churned some nice commissions from you.   

I know, right?!?!  I'm planning on reducing all of this to VTSAX, but just want to make sure I'm not missing anything when it comes to selling all this.  Should I just start selling them all as quickly as possible and buying up VTSAX?

MDM

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Re: Getting Rid of the Investment Advisor
« Reply #7 on: March 24, 2018, 09:13:46 PM »
I'm planning on reducing all of this to VTSAX, but just want to make sure I'm not missing anything....
You would be missing international equities, and any type of bonds.  That may or may not be your intent.  E.g., see Three-fund portfolio - Bogleheads.

Tracyl-5

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Re: Getting Rid of the Investment Advisor
« Reply #8 on: March 24, 2018, 09:28:46 PM »
I have another IRA with Vanguard and a 401k that has some international and bonds...  So I'm okay making these accounts all VTSAX and then rolling them into my Vanguard accounts.  But I do want to be heavy on the stocks.  I lean towards a JLCollins approach!

CorpRaider

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Re: Getting Rid of the Investment Advisor
« Reply #9 on: March 26, 2018, 09:10:57 AM »
Might want to check and see if they levy a high fee on VTSAX, a lot of non-vanguard brokerages do. 

Even if the fee is zero for a while, if you're going to stay there, maybe buying VTI works out better.

That is crazy to see how they churned your account into ticker salad buying 3 shares and other craziness.
« Last Edit: March 26, 2018, 11:59:24 AM by CorpRaider »

Tracyl-5

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Re: Getting Rid of the Investment Advisor
« Reply #10 on: March 26, 2018, 03:50:58 PM »
Might want to check and see if they levy a high fee on VTSAX, a lot of non-vanguard brokerages do. 

Thanks for getting me to check further into the fees!  I've learned a few things:

1)  Merrill Edge doesn't offer VTSAX, just VTSMX.  So VTI would be better.
2)  I assumed my free trades applied to mutual funds as well, but they only apply to stocks & ETFs.  Mutual funds cost $19.95 to trade.  Again, VTI better.
HOWEVER
3)  Only TWO of the mutual funds in my holdings are No-Load, No Transaction funds according to the only list I can find (from Dec 2011).  I think that means I'll pay $19.95 to sell each and every other fund in that list I posted!  Ugh! 
Can anybody confirm that?  Or any advice on what to do about that?

smallstache

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Re: Getting Rid of the Investment Advisor
« Reply #11 on: March 27, 2018, 02:31:05 AM »
Might want to check and see if they levy a high fee on VTSAX, a lot of non-vanguard brokerages do. 

Thanks for getting me to check further into the fees!  I've learned a few things:

1)  Merrill Edge doesn't offer VTSAX, just VTSMX.  So VTI would be better.
2)  I assumed my free trades applied to mutual funds as well, but they only apply to stocks & ETFs.  Mutual funds cost $19.95 to trade.  Again, VTI better.
HOWEVER
3)  Only TWO of the mutual funds in my holdings are No-Load, No Transaction funds according to the only list I can find (from Dec 2011).  I think that means I'll pay $19.95 to sell each and every other fund in that list I posted!  Ugh! 
Can anybody confirm that?  Or any advice on what to do about that?

Without reading the terms of your brokerage agreement, no one on here will be able to confirm the fees.  However, a $19.93 per transaction fee will most likely pale in comparison to the annual expense ratio you are paying for the privilege of holding these mutual funds.  Even the time you put into listing all the funds on this thread is not worth the aggravation, much less a review of the details of each one.

If it were me, I would put a sell order for every holding you have.  The fee waiver will cover the individual stocks and ETFs; bite the bullet on the mutual funds.  On Day 2 put in a buy order for VTSMX (not VTI bear with me, and yes I know there may be a transaction fee).  On Day 3, call Vanguard and initiate a transfer of funds to Vanguard.  Once that goes through, Vanguard will automatically convert your shares to VTSAX because the value is over $10,000.  Your days of paying unnecessary fees will be over.

Tracyl-5

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Re: Getting Rid of the Investment Advisor
« Reply #12 on: March 28, 2018, 12:55:50 PM »
If it were me, I would put a sell order for every holding you have.  The fee waiver will cover the individual stocks and ETFs; bite the bullet on the mutual funds.  On Day 2 put in a buy order for VTSMX (not VTI bear with me, and yes I know there may be a transaction fee).  On Day 3, call Vanguard and initiate a transfer of funds to Vanguard.  Once that goes through, Vanguard will automatically convert your shares to VTSAX because the value is over $10,000.  Your days of paying unnecessary fees will be over.

Thank you for responding!  Ugh, I guess I will have to bite the bullet and do this...  Just hate that it will cost me probably $700 to get out, but I guess that's small change in the big scheme of things.  I don't think there's anything else I can do though!  It will save me the high expense ratios in the long run too.  Can't get through this process fast enough!  Then I'll be Vanguard all the way!

CorpRaider

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Re: Getting Rid of the Investment Advisor
« Reply #13 on: March 28, 2018, 01:16:56 PM »
You could also consider moving the account in-kind to another firm and then executing your sells and buys that will cost you fees at this place.  I THINK fido doesn't charge to sell mutual funds.  Definitely verify that for yourself though. 

Or if the account is big enough you might get a bonus (some $$$) for moving to cover the costs. 

Vanguard wouldn't charge you on the buy side if you are buying their funds so you wouldn't be worse off there really by losing a lot of the free trades. 

I would probably move it come hell or high water if they did that to my account.
« Last Edit: March 28, 2018, 01:21:30 PM by CorpRaider »

Tracyl-5

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Re: Getting Rid of the Investment Advisor
« Reply #14 on: March 28, 2018, 04:40:10 PM »
You could also consider moving the account in-kind to another firm and then executing your sells and buys that will cost you fees at this place. 

Oooh!  I think I like that!  I could sell everything I have free trades for and then just move the rest to Vanguard...  Then sell it there!  That way I'm not giving Merrill Lynch any more money!  I'd rather Vanguard get it since they're the better company. 

TomTX

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Re: Getting Rid of the Investment Advisor
« Reply #15 on: March 28, 2018, 05:11:08 PM »
You could also consider moving the account in-kind to another firm and then executing your sells and buys that will cost you fees at this place. 

Oooh!  I think I like that!  I could sell everything I have free trades for and then just move the rest to Vanguard...  Then sell it there!  That way I'm not giving Merrill Lynch any more money!  I'd rather Vanguard get it since they're the better company.

Once you have it at Vanguard, I suggest still putting it into the Vanguard ETFs.

That way, you have flexibility.

For example, Merrill Edge paid me $600 just for doing an in-kind transfer of my VTI and opening accounts there. Wasn't that nice?  After 6 months, nothing stopping me from moving to another brokerage to get incentives.

Keep in mind that Merrill Lynch and Merrill Edge are run pretty darn separately - I've had nothing but excellent service and knowledgeable people on the phone with Merrill Edge. And I don't pay a penny because it's all in Vanguard ETFs.

smallstache

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Re: Getting Rid of the Investment Advisor
« Reply #16 on: March 28, 2018, 08:45:20 PM »
Thank you for responding!  Ugh, I guess I will have to bite the bullet and do this...  Just hate that it will cost me probably $700 to get out, but I guess that's small change in the big scheme of things.  I don't think there's anything else I can do though!  It will save me the high expense ratios in the long run too.  Can't get through this process fast enough!  Then I'll be Vanguard all the way!

Based on the expense ratios reported by Google Finance, you will pay $780 on your ~$100,000 of mutual funds this year (and every year you hold them).  VTSAX will cost you $45.63 a year.

Mighty-Dollar

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Re: Getting Rid of the Investment Advisor
« Reply #17 on: March 28, 2018, 10:58:53 PM »
This is what  ̶a̶d̶v̶i̶s̶o̶r̶s̶ salesmen do. They muck it up with lots and lots of funds in order to make investing seem complicated (even though it's not) and so that you'll have to continue to pay Mr. Advisor.

I would have stuck with a total stock market index fund and a total bond market index fund. Percentage rebalance if and when your allocation ratio deviates by 5% or so.

smallstache

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Re: Getting Rid of the Investment Advisor
« Reply #18 on: March 29, 2018, 04:59:42 AM »
This is what  ̶a̶d̶v̶i̶s̶o̶r̶s̶ salesmen do. They muck it up with lots and lots of funds in order to make investing seem complicated (even though it's not) and so that you'll have to continue to pay Mr. Advisor.

I would have stuck with a total stock market index fund and a total bond market index fund. Percentage rebalance if and when your allocation ratio deviates by 5% or so.

That's nice what you would have done.  OP wants to know what to do now.

CorpRaider

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Re: Getting Rid of the Investment Advisor
« Reply #19 on: March 29, 2018, 07:01:49 AM »
Man I took BAC off my watch list after seeing this.  They probably charged her $50-75 to put on several sub $1000 positions.  That is not a sustainable business model, at all and evidences a rotten culture to me.

Tracyl-5

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Re: Getting Rid of the Investment Advisor
« Reply #20 on: March 29, 2018, 03:17:43 PM »
Thanks all!  For the pointers and for the commiseration...  Yeah, I'm mad as hell they did all this to my account.  But now I know better, and I'm going to take steps asap to get out of there. 

I'm still of the mind that I'll sell everything that I have free trades for at Merrill Edge, and then move the rest to Vanguard and do the rest of my trading there.  I'll feel a lot better once this process is all over!

smallstache

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Re: Getting Rid of the Investment Advisor
« Reply #21 on: March 30, 2018, 01:01:41 AM »
If Vanguard doesn't offer one or more of your funds, it may not be pull the fund(s) into your new Vanguard account.  Check with the representative.

CorpRaider

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Re: Getting Rid of the Investment Advisor
« Reply #22 on: March 30, 2018, 05:35:35 AM »
Yeah VG is not like the best customer service, so you might end up better rolling to schwab or fido after doing the homework.

GOFU

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Re: Getting Rid of the Investment Advisor
« Reply #23 on: March 30, 2018, 09:48:34 AM »
If Vanguard doesn't offer one or more of your funds, it may not be pull the fund(s) into your new Vanguard account.  Check with the representative.
With a Vanguard brokerage account (IRA or taxable) you should be able to hold, buy, sell or transfer to Vanguard any fund or ETF available for purchase in the market.

Yeah VG is not like the best customer service, so you might end up better rolling to schwab or fido after doing the homework.
Couldn't disagree more with this. I have been with Vanguard for over 20 years and I have never had a single complaint. Every time I have sought assistance the person on the phone was pleasant, helpful, effective and efficient.
« Last Edit: March 30, 2018, 09:56:38 AM by GOFU »

appleshampooid

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Re: Getting Rid of the Investment Advisor
« Reply #24 on: March 30, 2018, 09:53:10 AM »
If Vanguard doesn't offer one or more of your funds, it may not be pull the fund(s) into your new Vanguard account.  Check with the representative.
With a Vanguard brokerage account (IRA or taxable) you should be able to hold, buy, sell or transfer to Vanguard any fund or ETF available for purchase in the market.
But they will charge you to sell the non-Vanguard securities. So it wouldn't make any sense to go through the process of in-kind transfer for anything but the Vanguard funds. For those, it would make sense.

I have never done an in-kind transfer, so I'm not familiar with the level of effort. Maybe it's not that much of a hassle?

GOFU

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Re: Getting Rid of the Investment Advisor
« Reply #25 on: March 30, 2018, 10:17:07 AM »
If Vanguard doesn't offer one or more of your funds, it may not be pull the fund(s) into your new Vanguard account.  Check with the representative.
With a Vanguard brokerage account (IRA or taxable) you should be able to hold, buy, sell or transfer to Vanguard any fund or ETF available for purchase in the market.
But they will charge you to sell the non-Vanguard securities. So it wouldn't make any sense to go through the process of in-kind transfer for anything but the Vanguard funds. For those, it would make sense.

I have never done an in-kind transfer, so I'm not familiar with the level of effort. Maybe it's not that much of a hassle?
I did an in-kind transfer to Vanguard from Merrill Lynch earlier this year. No hassle at all and no cost whatever. Easy peasy, slick and greasy. The funds showed up in my Vanguard IRA brokerage just as they were held with Merrill.

The process on how to do such a transfer is explained on the Vanguard website and the Vanguard website walks you through it. Just follow the process of providing some information and a few clicks on the Vanguard website, then print and sign the transfer form and physically mail it to Vanguard. You need to also send a copy of a recent monthly statement from the Merrill account. Vanguard will handle all the rest of the process in getting the assets transferred over from Merrill. In a week or two all of your assets will be in your Vanguard account just as you held them with Merrill. You can track the progress of the transfer by logging in to your Vanguard account.

The form you need to sign may indicate the need for some type of special signature validation (golden certification or some such that you can only get at a bank), but the polite and knowledgable Vanguard rep on the phone told me Merrill did not require that signature verification so I mailed it off without that. About 7 business days later everything I had held with Merrill was in my Vanguard account, in-kind and in tact. 

I then sold the non-Vanguard funds and ETFs because Merrill had me in 15 different funds (not as bad as the OP, but along the same lines). To sell the non-Vanguard assets Vanguard charged me $8 a trade, the same as TD Ameritrade or any other broker would charge. I then put all the money in VTSAX at no commission.

Your Merrill rep will probably call or email you all wounded and disappointed that he no longer gets to filch your money. I, myself, never responded to that, so maybe my Merrill rep is left hurt and confused and crying at night.
 
Did I say easy peasy slick and greasy? Because it was.
« Last Edit: March 30, 2018, 10:43:49 AM by GOFU »

Tracyl-5

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Re: Getting Rid of the Investment Advisor
« Reply #26 on: March 30, 2018, 08:07:53 PM »
I did an in-kind transfer to Vanguard from Merrill Lynch earlier this year. No hassle at all and no cost whatever. Easy peasy, slick and greasy. The funds showed up in my Vanguard IRA brokerage just as they were held with Merrill.

Oh my gosh, this is awesome info!!!  Thank you so much for this!  Yes, it will cost me to sell the funds whether they are in Merrill Edge or at Vanguard, so I figure I'd rather give Vanguard the money.  I think it's only $8 if you have over $500k with Vanguard though, and I'm $100k short of that.  But if I gotta pay $20 somewhere, I'd rather pay Vanguard.  And since I transferred my Merrill Lynch accounts into their Merrill Edge self-investment platform, I shouldn't have any advisors calling me crying, ha!

I cannot WAIT to get through this process and have ALL my non-401k accounts at Vanguard!

smallstache

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Re: Getting Rid of the Investment Advisor
« Reply #27 on: March 31, 2018, 08:38:10 AM »
If Vanguard doesn't offer one or more of your funds, it may not be pull the fund(s) into your new Vanguard account.  Check with the representative.
With a Vanguard brokerage account (IRA or taxable) you should be able to hold, buy, sell or transfer to Vanguard any fund or ETF available for purchase in the market.

There are funds and fund families that Vanguard does not offer.  If Vanguard doesn't offer the fund, it won't pull the fund into OP's new Vanguard account.  Same with any other broker...someone mentioned Fidelity and Schwab.

I don't know if any of OP's funds are affected by this or not.  That is something the Vanguard representative will help her with.

Mighty-Dollar

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Re: Getting Rid of the Investment Advisor
« Reply #28 on: April 01, 2018, 11:29:56 PM »
This is what  ̶a̶d̶v̶i̶s̶o̶r̶s̶ salesmen do. They muck it up with lots and lots of funds in order to make investing seem complicated (even though it's not) and so that you'll have to continue to pay Mr. Advisor.

I would have stuck with a total stock market index fund and a total bond market index fund. Percentage rebalance if and when your allocation ratio deviates by 5% or so.

That's nice what you would have done.  OP wants to know what to do now.
Here's a shocker: Get into a total stock market index fund and a total bond market index fund! Do so in a tax efficient manner.

grantmeaname

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Re: Getting Rid of the Investment Advisor
« Reply #29 on: April 02, 2018, 04:37:03 AM »
Something something flies, honey, vinegar.

smallstache

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Re: Getting Rid of the Investment Advisor
« Reply #30 on: April 02, 2018, 09:57:45 AM »
This is what  ̶a̶d̶v̶i̶s̶o̶r̶s̶ salesmen do. They muck it up with lots and lots of funds in order to make investing seem complicated (even though it's not) and so that you'll have to continue to pay Mr. Advisor.

I would have stuck with a total stock market index fund and a total bond market index fund. Percentage rebalance if and when your allocation ratio deviates by 5% or so.

That's nice what you would have done.  OP wants to know what to do now.
Here's a shocker: Get into a total stock market index fund and a total bond market index fund! Do so in a tax efficient manner.

Then phrase it as such:  "OP, I think you should do X, Y, and Z".  Not "I would have..." This comes off as "I'm smart and you're dumb."

 

Wow, a phone plan for fifteen bucks!