Transfer Roth IRA from Fidelity to VG

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voyager
Posts: 10
Joined: Wed Aug 31, 2016 1:50 am

Transfer Roth IRA from Fidelity to VG

Post by voyager » Fri Oct 13, 2017 12:41 pm

Hello,

I'm considering transfer of Roth IRA from Fidelity to VG.
At Fidelity, I'm currently invested in Fidelity mutual funds (FBIOX, FSCKX, FTIPX).

If I do "in-kind" transfer, I was told by VG representative a few days ago that if VG has those Fidelity funds, the in-kind transfer would happen, but in future, when I have to sell, there would be fees. (I think this is what I was told, but not 100% sure now. What they did say certainly was that some sort of fee would apply -- either when buying the Fid funds in VG during in-kind transfer, or later when I were to sell).

On the other hand, if I first sell the Fidelity funds at Fidelity --> then do a cash transfer --> and then buy equivalent VG funds at VG, since the process can take 2 weeks normally (maybe more), I could end up losing whatever the market may gain in this period.

Do I have any option, decidedly better than both of the above options ? I was reading some forum posts talking about ETFs in some related context. I have never dealt with ETFs so far (only mutual funds), but is there a better option based on ETFs here ? (e.g., sell fidelity funds at fidelity --> buy ETFs at Fidelity (Fidelity or VG ETFS?) --> Do in-kind transfer ?)

Thank you.

crumbone
Posts: 52
Joined: Thu Oct 12, 2017 11:50 pm

Re: Transfer Roth IRA from Fidelity to VG

Post by crumbone » Fri Oct 13, 2017 1:52 pm

I'm curious what your issue with the Fido funds is-- the expense ratios are essentially identical to Vanguard. VG may have a slight edge in tax efficiency but that's meaningless for a Roth IRA. If you just like the philosophy and incentive structure of Vanguard better, that's fair enough. If you want to move the account, it's generally simplest to transfer in-kind and then sell as desired at the new brokerage. As long as you've waited beyond the early-sale fee period (I know FTIPX has one), any fees should be nominal. Consider just leaving it in the Fido funds even if you move them to Vanguard (then directing new contributions to VG funds)-- I'm not sure the juice is worth the squeeze when the funds are so similar.

Dottie57
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Re: Transfer Roth IRA from Fidelity to VG

Post by Dottie57 » Fri Oct 13, 2017 7:19 pm

I too am happy with Fido and puzzled as to why you want to leave. My 401k has vanguard equities but is at fido. My iras are at fido. Like the web site much better than vanguard.

pkcrafter
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Re: Transfer Roth IRA from Fidelity to VG

Post by pkcrafter » Fri Oct 13, 2017 11:06 pm

Voyager, you listed 3 funds, FBIOX, FSCKX, FTIPX) = Select Biotech, Mid Cap Index, and Total International. These aren't your whole portfolio are they? What else do you hold. Can you list your entire portfolio with percentages and expense ratios for all your accounts?

I agree with others, there really is no reason to transfer to Vanguard because Fidelity has a good selection of very low-cost index funds available.


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

mervinj7
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Joined: Thu Mar 27, 2014 3:10 pm

Re: Transfer Roth IRA from Fidelity to VG

Post by mervinj7 » Sat Oct 14, 2017 12:23 am

I agree with the others. Fido has great service and very low ER index funds. Don't bother moving. Though, you may want to sell off that biotech find if you want to simplify your holdings.

mega317
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Joined: Tue Apr 19, 2016 10:55 am

Re: Transfer Roth IRA from Fidelity to VG

Post by mega317 » Sat Oct 14, 2017 12:43 am

voyager wrote:
Fri Oct 13, 2017 12:41 pm
I'm considering transfer of Roth IRA from Fidelity to VG.
Agree with the others, you need to answer the why.
On the other hand, if I first sell the Fidelity funds at Fidelity --> then do a cash transfer --> and then buy equivalent VG funds at VG, since the process can take 2 weeks normally (maybe more), I could end up losing whatever the market may gain in this period.
Eh. I wouldn't worry about this too much if you decide making the move is the right thing. I guess if your account is large enough and the market really rocks for those two weeks you'll end up behind.
(e.g., sell fidelity funds at fidelity --> buy ETFs at Fidelity (Fidelity or VG ETFS?) --> Do in-kind transfer ?)
Sure you could do this too.

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