Author Topic: Transferring between Vanguard and robo-advisors  (Read 2152 times)

koralcem

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Transferring between Vanguard and robo-advisors
« on: May 24, 2017, 01:15:26 PM »
Following the investment order list. Finally got to the end where we have some extra to put into a regular, taxable investment account.

The choice now is: Where to open the account? More specifically Vanguard (with whom we already have IRAs) or some robo-advisor? To be perfectly clear, this isn't a "which one is better" question. If you have any new opinions I'd be happy to read them, but I've already found many other threads about it. I'm comfortable DIYing our asset allocation and rebalancing, but still mulling over tax loss harvesting.

My specific question is: Can this choice be delayed? Can one start putting money aside in either institution, just to start building the stash, while they take the time to decide where they ultimately want to end up? Or will there be big tax consequences for a later move and a long term choice needs to be made before investing even begins?

So if one starts out with a taxable account at Vanguard but later decides they want to use Betterment, can positions be transferred in-kind into Betterment without incurring capital gains? Or do all positions have to be cashed out, transferred, and investments purchased on the other side? Conversely if one starts over at Betterment but later decides it's not worth it, can positions be transferred to Vanguard without capital gains?

Or is the transfer just fine, but it's the "settling into different funds" period at the new destination that will cause taxable events? For example, if I brought funds from Betterment to Vanguard, even if they got transferred without any sales, I'd imagine we'd still be invested in whatever mix Betterment had for us. Assuming we want to end up in Vanguard funds, we'd have to sell whatever Betterment had us in, and that would incur the capital gains, yes? Not the transfer itself?

MrsWolfeRN

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Re: Transferring between Vanguard and robo-advisors
« Reply #1 on: May 24, 2017, 06:06:46 PM »
I recently transferred my Roth IRA and most of my taxable investments from Wealthfront to Vanguard. I was able to transfer the ETFs in kind, and overall the process was smooth. Vanguard charged some commissions to get rid of a few shitty funds that were in there. I left a small tIRA with Wealthfront (it was a rollover from an old 401k,, with not enough in it to buy Vanguard mutual funds), and also a small taxable account because I get the first $15k managed free.

Wealthfront did a respectable job managing my money (definitely better than a savings account), and they are slightly cheaper than Betterment, but after I discovered MMM and the j Collins stock series I was ready to go it alone.