I'm stuck at Fidelity, but like Vanguard funds better

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lazarus89
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I'm stuck at Fidelity, but like Vanguard funds better

Post by lazarus89 »

Subject says it all: I'm stuck at Fidelity because of where I work, and buying Vanguard funds costs $75 a pop. The fee is obviously not the end of the world, but it still rankles. Is there any way around it?

For what it's worth, I'm looking to invest two lots of ~15K in VFSTX: one in June, and another in December. I'm open to buying a Fidelity alternative, but I can't find a fund that keeps its duration as short (and expense ratio as low!) as VFSTX.
livesoft
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by livesoft »

What if you don't use VFSTX, but use VCSH (not quite the same), instead? Or another short-term bond ETF?

What about a Fidelity Spartan Short-Term Treasury Bond Index fund FSBIX? Or a combo fo FSBIX and VCSH?
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lazarus89
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by lazarus89 »

I should also add that I'm not allowed to buy ETFs. :(
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nisiprius
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by nisiprius »

Take a look at:

http://www.bogleheads.org/wiki/Fidelity

for suggestions on how to approach this situation. (My personal opinion is that being "stuck at Fidelity" ain't such a bad place to be).
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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lazarus89
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by lazarus89 »

Yup -- I actually came here from the wiki link. Fidelity's Spartan funds seem to have an equivalent to everything Vanguard offers for anyone trying to set up a stock index tracking, and it's great.

At the FI end of the spectrum though, there is less equivalence. Choices, choices...
bkkchris
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by bkkchris »

I believe most Vanguard funds at Fidelity are $75 for the first purchase and then $5 thereafter if you set up an automatic payment plan.
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lazarus89
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by lazarus89 »

So, I think there are a couple of issues I need to worry about here:

- Initial purchase: the June lot, sounds like it's going to be $75
- Any subsequent purchase: the December lot, sounds like its $5.
- Dividend reinvestment: Looking at the fee schedule, it looks like it's going to be free? Confirmation would be nice though.
- Potential upgrade to Admiral Share class if I cross the $50K investment threshold. Are they going to bung me another $75 for that?

Are there any other life cycle events that I am not considering?

I suppose I could call Fidelity...but I do so hate talking to people.
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sportal
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by sportal »

lazarus89 wrote:- Initial purchase: the June lot, sounds like it's going to be $75
- Any subsequent purchase: the December lot, sounds like its $5.
Yes, get the $5 fee via the automatic plan. You can setup the automatic plan to be monthly, do one transaction, and then cancel it, so basically getting each subsequent investment for $5.
- Dividend reinvestment: Looking at the fee schedule, it looks like it's going to be free? Confirmation would be nice though.
Yes, dividend reinvestment is free.
- Potential upgrade to Admiral Share class if I cross the $50K investment threshold. Are they going to bung me another $75 for that?
Lots of time the Admiral Share class isn't available outside of Vanguard. You have to check on the specific mutual fund to see if the Admiral Share class is available at Fidelity. If you want the Admiral Share class expense ratio, look at using the Vanguard ETF instead.
mac808
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by mac808 »

For what it's worth, I'm in the same position but I stick with Fidelity because I like the website & web tools so much more than Vanguard's.
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William4u
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by William4u »

lazarus89 wrote:Yup -- I actually came here from the wiki link. Fidelity's Spartan funds seem to have an equivalent to everything Vanguard offers for anyone trying to set up a stock index tracking, and it's great.

At the FI end of the spectrum though, there is less equivalence. Choices, choices...
Yes, if you stick with just the Spartan Funds, Fidelity is just fine.
kidshrink
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by kidshrink »

Does your account allow you to open a Brokeagelink account? That would allow you to buy ETFs.

Do your Fidelity funds have a management fee?
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by ofckrupke »

kidshrink wrote:Does your account allow you to open a Brokeagelink account? That would allow you to buy ETFs.
Quite possibly not: plan sponsors can restrict the range of investments that can be traded in a BL accounts under a plan.
Example: spouse's 401(a) plan allows MF or ETF in BL accounts. Same spouse, same employer, 403(b) plan allows only MF in BL accounts (no individual stocks, bonds or options in either). These restrictions even emerged from a single committee.
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lazarus89
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by lazarus89 »

kidshrink wrote:Does your account allow you to open a Brokeagelink account? That would allow you to buy ETFs.

Do your Fidelity funds have a management fee?
Alas, no BrokeageLink allowed.
kidshrink
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by kidshrink »

lazarus89 wrote:
kidshrink wrote:Does your account allow you to open a Brokeagelink account? That would allow you to buy ETFs.

Do your Fidelity funds have a management fee?
Alas, no BrokeageLink allowed.
I guess they think they are protecting employees from themselves. For the most part, they'd be right.
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Ice-9
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by Ice-9 »

My employer made me sign a document that pretty much said, "I acknowledge that with the BrokerageLink account I will have options to buy a bunch of stuff that can be hazardous to my retirement savings." But I signed it, and now they let me buy ETFs. :D
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lazarus89
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by lazarus89 »

kidshrink wrote:
lazarus89 wrote:
kidshrink wrote:Does your account allow you to open a Brokeagelink account? That would allow you to buy ETFs.

Do your Fidelity funds have a management fee?
Alas, no BrokeageLink allowed.
I guess they think they are protecting employees from themselves. For the most part, they'd be right.
It's so that we can't invest in stuff on the company's restricted trading list: I work for a bank.
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BrandonBogle
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by BrandonBogle »

lazarus89 wrote:
kidshrink wrote:Does your account allow you to open a Brokeagelink account? That would allow you to buy ETFs.

Do your Fidelity funds have a management fee?
Alas, no BrokeageLink allowed.

Do they allow in-service rollovers of employer profit sharing and/or after tax (not Roth) dollars? Perhaps you can roll parts of it over to an tIRA or rIRA at Vanguard.
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lazarus89
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by lazarus89 »

BrandonBogle wrote: Do they allow in-service rollovers of employer profit sharing and/or after tax (not Roth) dollars? Perhaps you can roll parts of it over to an tIRA or rIRA at Vanguard.
Nope. Every share, bond and mutual fund that I (or anyone in my family -- that was an interesting conversation with my wife) own needs to be housed in one of the Fidelity core or mutual fund trading accounts they've set up for me.

I'm not inclined to disobey: I got a very nasty call from compliance a couple of years ago about a dormant, undisclosed Charles Schwab checking account I had that had a (completely unused) brokerage account attached to it. To this day, I have no clue how they found out about it...not that I have anything to hide!
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tfb
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by tfb »

lazarus89 wrote:Alas, no BrokeageLink allowed.
What are allowed then? If it's a 401k plan account, you have a fixed set of choices without BrokeageLink. You wouldn't be talking about VFSTX if it's not on the menu. If it's just a regular brokerage account (taxable or IRA), then you can buy any ETF. VCSH is already mentioned. Or just buy a CD at a bank or credit union. A CD at a bank or credit union is not in a brokerage account. You are not required to have it at Fidelity, right? VFSTX has average maturity 3.1 years SEC yield 1.07%. You can get 1.6% on a 3-year CD.
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tj
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by tj »

lazarus89 wrote:
BrandonBogle wrote: Do they allow in-service rollovers of employer profit sharing and/or after tax (not Roth) dollars? Perhaps you can roll parts of it over to an tIRA or rIRA at Vanguard.
Nope. Every share, bond and mutual fund that I (or anyone in my family -- that was an interesting conversation with my wife) own needs to be housed in one of the Fidelity core or mutual fund trading accounts they've set up for me.

I'm not inclined to disobey: I got a very nasty call from compliance a couple of years ago about a dormant, undisclosed Charles Schwab checking account I had that had a (completely unused) brokerage account attached to it. To this day, I have no clue how they found out about it...not that I have anything to hide!

How bizarre. On the other hand, you must have a pretty sweet job if it has such stringent requirements on your finances.
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by BrandonBogle »

tj wrote:
lazarus89 wrote:
BrandonBogle wrote: Do they allow in-service rollovers of employer profit sharing and/or after tax (not Roth) dollars? Perhaps you can roll parts of it over to an tIRA or rIRA at Vanguard.
Nope. Every share, bond and mutual fund that I (or anyone in my family -- that was an interesting conversation with my wife) own needs to be housed in one of the Fidelity core or mutual fund trading accounts they've set up for me.

I'm not inclined to disobey: I got a very nasty call from compliance a couple of years ago about a dormant, undisclosed Charles Schwab checking account I had that had a (completely unused) brokerage account attached to it. To this day, I have no clue how they found out about it...not that I have anything to hide!

How bizarre. On the other hand, you must have a pretty sweet job if it has such stringent requirements on your finances.

I hope so! Otherwise Op's immediate family may be really annoyed even if Op can live with the restrictions on his accounts. It's surprising to hear someone have such restrictions unless they are a high officer/director or principle shareholder of the bank.
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beyou
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by beyou »

I too work for a firm that restricts which brokerage firms we can use, so they can easily
report our trades (we must pick from a list that automatically reports our trades to our employer).

But excluded are mutual fund direct held accounts.
So I can open a fund directly at Vanguard, just not a VBS account where I can trade stocks.
That would have to be at their chosen list of brokers.

I can live with that, and I have both, direct at Vanguard and a broker from their list for
the very small amount of activity I must perform outside Vanguard funds.

I assume you can not do this, but you should inquire and if not, why ?
There is no way you can violate company restricted lists with a fund (vs brokerage) account.
My firm restricted this at one time, but relented and changed the rule.
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by robertalpert »

lazarus89 wrote:
BrandonBogle wrote: Do they allow in-service rollovers of employer profit sharing and/or after tax (not Roth) dollars? Perhaps you can roll parts of it over to an tIRA or rIRA at Vanguard.
Nope. Every share, bond and mutual fund that I (or anyone in my family -- that was an interesting conversation with my wife) own needs to be housed in one of the Fidelity core or mutual fund trading accounts they've set up for me.

I'm not inclined to disobey: I got a very nasty call from compliance a couple of years ago about a dormant, undisclosed Charles Schwab checking account I had that had a (completely unused) brokerage account attached to it. To this day, I have no clue how they found out about it...not that I have anything to hide!

Perhaps you cannot have a "brokerage" account anywhere, but can you have a non-brokerage mutual funds account (no "brokerage" products) directly at Vanguard?
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lazarus89
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Re: I'm stuck at Fidelity, but like Vanguard funds better

Post by lazarus89 »

These are all good suggestions: I'll be talking with compliance on Monday about a way through (and update the thread with the eventual outcome, of course!)
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