Author Topic: Stay with Fidelity or add a Vanguard account??  (Read 1539 times)

FI-King_Awesome

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Stay with Fidelity or add a Vanguard account??
« on: February 20, 2019, 07:13:01 PM »
Hey Everyone,

I’m currently with Fidelity and looking to diversify with index funds (heavily invested in options that I just exercised - these have performed well, but it’s time to pull out).  About 400k sitting in cash.

Are there appropriate index funds (decent performance, low fees, tax efficient) at Fidelity, or should I open an account with Vanguard?  If there are, where can I find these?

I’m still working, so looking to minimize taxes in my after tax account.  Will not be withdrawing or recognizing capital gains in the short term.


Thanks in advance for advice and opinions!

Radagast

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #1 on: February 20, 2019, 09:59:02 PM »
With Fidelity, you will be mostly constrained for tax reasons to ETFs and a handful of tax exempt bond funds.

Vanguard allows free trades of all ETFs (except leveraged), has mutual funds that mimic the low tax structure of ETFs, and has a wider selection of tax exempt bond funds.

So for this use Vanguard seems the better choice. But if you like iShares ETFs and have less interest in plethora muni bond options, then it won't matter much.

MustacheAndaHalf

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #2 on: February 20, 2019, 10:50:49 PM »
Investing $400k at once can be an emotional task, not just a financial one.  I'd recommend you invest that money over a number of months so each purchase doesn't seem like that big of a deal.  But if you have an iron stomach and lots of investment experience, you could invest it more quickly.  Key thing is to start...

Fidelity has some zero fee index funds for both U.S. and international.  You should take a look at those, first, since that might meet your needs.

I think iShares are $0/trade at Fidelity, so you can buy a number of iShares ETFs...
ITOT is U.S. Total Stock Market
IXUS is international - everywhere except U.S.
SUB is a short-term tax-exempt bond ETF (you need to pay CA/NY/etc state tax, but not Federal tax)

Those ETFs are also $0/trade at Vanguard, since almost all ETFs are now $0/trade at Vanguard.  But if your money is already at Fidelity, it might be easier to start there.

Does your work have a 401(k) plan?  Another use for cash is to pay living expenses while you ramp up your retirement accounts.  And then with that done, if your income doesn't exceed IRS limits, you can contribute to an IRA (Roth or Traditional).  Once you've used up tax advantaged space, it makes sense to invest in taxable.

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #3 on: February 20, 2019, 10:53:30 PM »
Reading this thread makes it pretty clear you should avoid Vanguard:
https://www.bogleheads.org/forum/viewtopic.php?f=10&t=273265&newpost=4392417

(Fidelity or Schab do have good CS. Your options may be more limited, but for index investing they're just as good - AND you can get yourself a bunch of free trades at Schwab if needed by moving in 100k at once.)

jlcnuke

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #4 on: February 21, 2019, 06:18:22 AM »
I'm with TD Ameritrade and love it for their brokerage and trading platforms. However, I want to do periodic contributions to a backdoor Roth which necessitates that I do multiple Roth conversions and I've recently found out that the only method of doing a Roth conversion through them is to send in a paper form filled out for each conversion... very tedious and annoying. So, I decided to just move my IRAs to Vanguard yesterday. I opened my accounts online (going through the full process) and.... no accounts shown. Tried again... still not working. This morning I called customer service and they were very helpful in letting me know that they have my account applications and they're waiting to be approved... which right now is taking ~ 4 business days. So, a week after "opening" the accounts I should have the accounts available....

Absolutely nothing in their emails, website, etc told me that it would take a week to get an account. I literally had my accounts set up and funded in minutes at TD Ameritrade so this was a huge shock to me and very, very disappointing.

MustacheAndaHalf

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #5 on: February 21, 2019, 07:40:26 AM »
Reading this thread makes it pretty clear you should avoid Vanguard:
https://www.bogleheads.org/forum/viewtopic.php?f=10&t=273265&newpost=4392417
One customer service anecdote doesn't mean it's "pretty clear you should avoid Vanguard".  Not only is that anecdotal, it assumes customer service is your sole investment criteria.  If you had read a thread where someone praised Voya's customer service, would you switch all your assets into their high expense ratio funds?

Car Jack

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #6 on: February 21, 2019, 09:06:34 AM »
Is this a taxable account? 

Fidelity has a ton of low cost index funds and ETFs.  So does Vanguard and Schwab.  TDAmeritrade also does but they're sort of mongrels since they dropped Vanguard ETFs from their free trading list.

Today, I have a Fidelity, Vanguard, Schwab and TDAmeritrade account.  In the next day or 2, my Vanguard one will be moved to TDA as part of a 2 step (or 3) move.  Eventually, I plan to put the money into the Fidelity Zero fund international, but am collecting bonuses along the way.

For taxable, I only do ETFs as I can control them better.  There's no cap gain distribution.

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #7 on: February 21, 2019, 11:15:34 AM »
Reading this thread makes it pretty clear you should avoid Vanguard:
https://www.bogleheads.org/forum/viewtopic.php?f=10&t=273265&newpost=4392417
One customer service anecdote doesn't mean it's "pretty clear you should avoid Vanguard".  Not only is that anecdotal, it assumes customer service is your sole investment criteria.  If you had read a thread where someone praised Voya's customer service, would you switch all your assets into their high expense ratio funds?
Ther'es more than one anecdote in that thread.

And there are many more threads like it.

The rest of your argument would be relevant if there weren't multiple other companies offering competitive low-expense ratio funds with no trading fees.

Quote
For taxable, I only do ETFs as I can control them better.  There's no cap gain distribution.
That isn't guaranteed. ETFs make it easier to control for cap gains distributions, but there still are plenty of ETFs distributing capital gains.

Telecaster

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #8 on: February 21, 2019, 03:40:33 PM »
I have accounts at both Fidelity and Vanguard.    Both have excellent low cost index ETFs/mutual funds.   No reason to switch if you are already at Fidelity. 

soccerluvof4

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #9 on: February 22, 2019, 03:01:24 AM »
Reading this thread makes it pretty clear you should avoid Vanguard:
https://www.bogleheads.org/forum/viewtopic.php?f=10&t=273265&newpost=4392417
One customer service anecdote doesn't mean it's "pretty clear you should avoid Vanguard".  Not only is that anecdotal, it assumes customer service is your sole investment criteria.  If you had read a thread where someone praised Voya's customer service, would you switch all your assets into their high expense ratio funds?
Ther'es more than one anecdote in that thread.

And there are many more threads like it.

The rest of your argument would be relevant if there weren't multiple other companies offering competitive low-expense ratio funds with no trading fees.

Quote
For taxable, I only do ETFs as I can control them better.  There's no cap gain distribution.
That isn't guaranteed. ETFs make it easier to control for cap gains distributions, but there still are plenty of ETFs distributing capital gains.



This is total nonsense.  Vanguard is the leader in what they do for good reason. Fidelity is solid as well but in most any industry your going to come across customer service issues now and again.  But to your needs I Prefer Vanguard and would strongly recommend them as others have said they have a lot more options for you but no problem staying with Fidelity or doing some part of your portfolio at both if like me you dont want everything under one roof.

Aunt Petunia

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #10 on: February 22, 2019, 04:16:12 AM »
I called Vanguard two days ago and got very good customer service. I was able to talk to a person right away and he took care of my issue in about five minutes.

CorpRaider

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #11 on: February 22, 2019, 07:33:15 AM »
I require a physical location and presence in my community before I am comfortable entrusting an entity with a large portion of my wealth.  So I use Fido (they have an office in town).

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #12 on: February 22, 2019, 12:41:28 PM »
This is total nonsense.  Vanguard is the leader in what they do for good reason. Fidelity is solid as well but in most any industry your going to come across customer service issues now and again.  But to your needs I Prefer Vanguard and would strongly recommend them as others have said they have a lot more options for you but no problem staying with Fidelity or doing some part of your portfolio at both if like me you dont want everything under one roof.
Could you please explain what exactly is nonsense?

I can't disagree that customer service issues happen anywhere, but there seems to be a real pattern of Vanguard messing up various transfers. One off's are just life, a pattern is... worrying?

Where Vanguard is leading is in the indexing department. Their funds and ETF's are, with a few exceptions, best in class. But you can get them through any broker, and for handling that aspect there are plenty of good companies.
« Last Edit: February 22, 2019, 12:44:31 PM by flipboard »

FI-King_Awesome

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Re: Stay with Fidelity or add a Vanguard account??
« Reply #13 on: February 26, 2019, 06:52:34 AM »
Thanks for the input everyone!!  The more I read on this forum, the more I realize how little I know...  a very humbling experience.

I also realize there’s a lot of knowledgeable folks on here, so I will start a new thread and include a detailed overview of my current investments - I’m certain there will be many improvements to be made.

Thanks again!