Transferring from AUM to three fund portfolio

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R2retire
Posts: 1
Joined: Fri Jun 23, 2017 10:27 pm

Transferring from AUM to three fund portfolio

Post by R2retire »

I have a taxable AUM account with Fidelity. I would like to simplify my portfolio to a 3 fund portfolio at Fidelity. I'm concerned about the tax/fee consequences of such a change. It's about 1/3 of my total portfolio and I am currently in a high tax bracket. Would it be better to continue to pay the AUM fee until I am in a lower tax bracket (hopefully working much less a year from now). I'm hoping I can someday soon mostly manage my own finances and save 1 percent in fees.
Any suggestions?
Thanks in advance!
MN Finance
Posts: 1926
Joined: Sat Dec 22, 2012 9:46 am

Re: Transferring from AUM to three fund portfolio

Post by MN Finance »

I think you can consider taking control now and slowly moving from the current funds to 3 funds. If you terminate the managed account you will stil retain the existing funds. You can then take all the funds with small gains and move them to their corresponding alternative. If there are large gains on some, you can just hold those until a future date.
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David Jay
Posts: 14569
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Transferring from AUM to three fund portfolio

Post by David Jay »

MN Finance wrote:I think you can consider taking control now and slowly moving from the current funds to 3 funds. If you terminate the managed account you will stil retain the existing funds. You can then take all the funds with small gains and move them to their corresponding alternative. If there are large gains on some, you can just hold those until a future date.
Yes, you should be able to terminate the managed account but stay with Fidelity. You can choose which funds to sell and when to minimize tax impact.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
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