Author Topic: Moving from Wells Fargo to Vanguard?  (Read 7807 times)

TryingToBeAGoodDad

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Moving from Wells Fargo to Vanguard?
« on: December 31, 2017, 09:13:54 AM »
Hi,
First time MMM forum post here. I am a novice investor and, besides my poor investment skills, have more or less been living an MMM-style of life before I knew it was a thing. I have a variety of funds sitting in Wells Fargo held accounts recommended and managed by a financial advisor. (Did I mention I am a novice investor?) I'm looking for recommendations for the best plan to get this money out of Wells Fargo and into Vanguard. Most of the WF have done okay this year. Attached is a snapshot of the breakdown.

EFTs are with QQQ and SPLV

MUTUAL FUNDS are with AGTHX, AEPGX, WSTCX

I realize you may need more information than what is provided, but thanks in advance!



Travis

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Re: Moving from Wells Fargo to Vanguard?
« Reply #1 on: December 31, 2017, 09:42:53 AM »
Your financial advisor is a charlatan.  Of the three mutual funds you listed, two have an overall expense ratio of over 6%, and the other has an ER of 2%.  The ETFs don't suck, but they're not spectacular either.  On Tuesday when Vanguard is open for business give them a call.  Tell them you want to open an account and transfer everything in to VSTAX. They'll walk you through it and let you know what paperwork, taxes, or fees might be involved. You don't even need to talk to Wells Fargo yourself.

Another Reader

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Re: Moving from Wells Fargo to Vanguard?
« Reply #2 on: December 31, 2017, 09:52:53 AM »
You have about $113k in taxable accounts.  Selling these all at once and moving the cash may cause you to pay substantial capital gains tax.  Figure out what the capital gains are and estimate the tax before you do anything.

Fidelity offers equally attractive index funds and no-commission ETFs.  However, they have bricks and mortar offices and people to help you and a much better website which in my opinion makes them superior to Vanguard.  As long as you tell them in advance you want only low cost funds and ETFs, you should be fine working with them.  In your shoes, I would transfer everything "in kind" so as not to generate capital gains, and then figure out a plan to dump the high cost funds efficiently.  The rep at Fidelity should handle the transfer for you.  If you go the Vanguard route, you are dependent on how knowledgeable the random phone rep you get is.  Less hand holding and a greater chance of a mistake in my opinion.

Frankies Girl

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Re: Moving from Wells Fargo to Vanguard?
« Reply #3 on: December 31, 2017, 10:07:10 AM »
I see at least three different types of accounts: SEP IRA, 529 (you have kids?), taxable/brokerage accounts.

Travis is right that WF is screwing you royally. I also agree with Another Reader that Fidelity might be more your speed. And absolutely you need to pay attention to the capital gains generated.

Agree to call Vanguard or Fidelity ASAP to get this started.

But what you are looking at basically is:

1(a). Figure out how many/what type of accounts you currently have.
1(b). Contact the Van/Fido rep and get advice on how to move these accounts over as painlessly as possible. This likely will involve selling off all WF garbage funds held in any tax deferred accounts ASAP and go to cash in anticipation of getting decent Vanguard/Fido funds after moved over (it's going to be way easier to move cash anyway). Any WF garbage held in taxable accounts, you'll need to assess how much your cap gains are and whether you are in the 25% or higher taxable bracket and how that is going to hurt you come IRS time. BUT you likely should sell everything WF put you in, go to cash in preparation for the move and then buy into the Vanguard/Fido funds once the money is over into the Vanguard/Fido accounts. Hoping someone else with superior knowledge will confirm this is the best move, but the Van/Fido rep is likely your best source for figuring this out.

Once you get this figured out, proceed:

2. Open equivalent accounts at Vanguard or Fido.
3. Fill out transfer paperwork for each account held at WF to move to Vanguard/Fido.
4. Submit paperwork to Vanguard/Fido, let them do the transferring (you don't have to speak to the WF bastards again)
5. Sell off all WF garbage that doesn't fit your AA (if you didn't already) and then buy the index funds that fit your AA across your portfolio.






If you want simple, easy, and decent returns, index investing is the way to go. And that means you can actually invest in just a few funds. It really isn't hard, but understanding how index investing works requires one to read and do some basic research, and most folks are too busy, scared, or worried about making mistakes to do their homework. This is how bastards like your WF rep take advantage of you - you didn't see the expense ratios, didn't even know to pay attention to stuff like that, and just assumed that they were professionals. They were, but they are professionals at putting their hand in your pockets and extracting as much of your money into their pockets as they can.

I just posted the following in another thread, and I think it might be helpful for you as well since it sounds like you're still at the very early stages of figuring out how all this stuff works. I knew nothing up until a few years ago, and found this forum and then Jim Collins and Bogleheads and this is my roadmap for how I got up to speed:

Read Jim Collins' stock series to get a great understanding of how this stuff fits together. Check out his site or get his book (based on the site). It is absolutely one of the best, easy to understand guides I've ever read.
http://jlcollinsnh.com/stock-series/

Check out Bogleheads site for any possible question you could have regarding index investing.

The following are the steps I took:

1. Wrote up an investment policy statement to figure out my goals and plans. This is my blueprint for what goes where, why I do A or B if this or that happens, where I want to go in the future, and how I'm going to get there.
https://www.bogleheads.org/wiki/Investment_policy_statement

2. Figured out my asset allocation (AA). This is based off of how much risk/volatility I felt comfortable with and set up my portfolio to reflect my AA (which would also include any real estate).
https://www.bogleheads.org/wiki/Asset_allocation

3. I then took a look at what I held where, sold off everything that didn't match up with my goals in my IPS (I decided I was going to be an index investor holding only 2-4 total mutual funds across my entire portfolio, YMMV). I built a lazy portfolio and I am quite pleased. https://www.bogleheads.org/wiki/How_to_build_a_lazy_portfolio

I personally have my entire portfolio with Fidelity (Fido) and am very happy there. I use their index funds so no loads, no buy/sell charges, equivalent to Vanguard's index funds, better customer service (not that Vanguard isn't fantastic, but they do expect you to not need them for much - much more DIY). As long as you stay away from managed funds and paid management at Fido, you can get great funds for as cheap if not cheaper than Vanguard, but with better customer service (my opinion anyway).
https://www.bogleheads.org/wiki/Fidelity



« Last Edit: December 31, 2017, 04:09:27 PM by Frankies Girl »

Bracken_Joy

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Re: Moving from Wells Fargo to Vanguard?
« Reply #4 on: December 31, 2017, 10:11:16 AM »
As always, Frankie was in with fantastic advice. My only addition is that I switched from WF this year, and they charged me $175 ($125 maybe? One of those) to move away from them =( A last "fuck you" from my crappy adviser. Definitely switch ASAP and get away from the WF BS.

Frankies Girl

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Re: Moving from Wells Fargo to Vanguard?
« Reply #5 on: December 31, 2017, 10:17:53 AM »
^Oh good point about transfer or account closing fees. Again, mostly the bastards (most banks like WF, but places like EJ and UBS or American Funds too) will act like assholes and hit you with fees for daring to leave them. Consider it a small price to pay to get the hell away from them.

If WF hits you with any any closing/transfer fees, ask Vanguard or Fido if there is anything they can do to help you out. When I shifted accounts from UBS and American Funds, Fidelity paid me back for the transfer fees as a thank you for my business.

But even if they don't, moving your accounts will be more than worth the few hundred they hit you with on the way out.

Bracken_Joy

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Re: Moving from Wells Fargo to Vanguard?
« Reply #6 on: December 31, 2017, 10:20:38 AM »
^Oh good point about transfer or account closing fees. Again, mostly the bastards (most banks like WF, but places like EJ and UBS or American Funds too) will act like assholes and hit you with fees for daring to leave them. Consider it a small price to pay to get the hell away from them.

If WF hits you with any any closing/transfer fees, ask Vanguard or Fido if there is anything they can do to help you out. When I shifted accounts from UBS and American Funds, Fidelity paid me back for the transfer fees as a thank you for my business.

But even if they don't, moving your accounts will be more than worth the few hundred they hit you with on the way out.

Yeah, I paid it willingly. I didn't check on in vanguard would have helped pay- we already have a ton of accounts with them, only a little bit was left with WF.

It's worth it OP. Especially with expense ratios like yours. I literally cringed when I read that! Definitely read the Stock Series that Frankie linked.

Travis

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Re: Moving from Wells Fargo to Vanguard?
« Reply #7 on: December 31, 2017, 10:43:08 AM »
Banks for banking, insurance for insurance companies, and investments for investing companies. Never let these concepts breed together. Notice that you're in funds that WF doesn't even control.  They simply invented themselves as a middle man to get a share of the fees as your "advisor."

TryingToBeAGoodDad

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Re: Moving from Wells Fargo to Vanguard?
« Reply #8 on: December 31, 2017, 02:30:40 PM »
Wow. In less than a few hours I've received what appears to be the most solid financial advice to date. Thank you!

I devoured Jim Collins book and many others. I know I screwed up in the past, but ready to get moving forward. After I determine cap gains questions, the next question is Fidelity or Vanguard? Anyone have experience with Vanguard's 529 plans?

I'll keep folks updated on how this unfolds. Hopefully it will help others in a similar situation!

snapperdude

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Re: Moving from Wells Fargo to Vanguard?
« Reply #9 on: December 31, 2017, 08:04:36 PM »
  Tell them you want to open an account and transfer everything in to VSTAX.



VTSAX

TomTX

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Re: Moving from Wells Fargo to Vanguard?
« Reply #10 on: January 01, 2018, 02:52:01 PM »
  Tell them you want to open an account and transfer everything in to VSTAX.



VTSAX

I used to be a VTSAX guy, but I swapped over to the ETF version (VTI) because it makes the investment portable - you can do an "in-kind" transfer between brokerages.

This makes it easier to get signup bonuses for changing brokerages.

https://forum.mrmoneymustache.com/welcome-to-the-forum/merrill-edge-incentives-getting-temporarily-increased-50-in-1q/

...but that's just gaming between good and better options.

Just to chime in - Wells Fargo has been financially raping you, without lube. Figure out if you can avoid the account closure fee by leaving $0.01 in the account.

[MOD NOTE: Please don't use sexual assault as a metaphor.  It's in the forum rules.  Thank you.]
« Last Edit: January 05, 2018, 06:45:27 AM by FrugalToque »

Mighty-Dollar

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Re: Moving from Wells Fargo to Vanguard?
« Reply #11 on: January 02, 2018, 01:38:38 AM »
I have a variety of funds sitting in Wells Fargo held accounts recommended and managed by a financial advisor. (Did I mention I am a novice investor?) I'm looking for recommendations for the best plan to get this money out of Wells Fargo and into Vanguard. Most of the WF have done okay this year.

EFTs are with QQQ and SPLV

MUTUAL FUNDS are with AGTHX, AEPGX, WSTCX
That "financial advisor" is actually a SALESMAN who does not legally work for you and your best interests. That's why they sold you those EXPENSIVE actively managed mutual funds. Those funds also have R-squared values close to 90. That means you could have bought index funds that do the same thing for much cheaper, saving perhaps about 0.75% per year (AEPGX), and about 0.59% per year (AGTHX). And WSTCX has a horrific expense ratio of 2.0%!  And did you pay a front end load as well? Often it's about 5.75% that gets subtracted from your share value when you buy. You might not have even noticed it.
Here's a review of AGTHX http://investingadvicewatchdog.com/mutual-funds.html

QQQ and SPLV are index funds. You can keep those. I would have just bought the S&P 500 index instead (VOO) because QQQ and SPLV basically just nullify each other out. One is aggressive and the other is conservative.

Yes switch to Vanguard and get out of those actively managed funds in a tax efficient manner. Invest in index funds (AKA passively managed mutual funds, AKA exchange traded funds).
« Last Edit: January 02, 2018, 01:41:21 AM by Mighty-Dollar »