Moving Roth IRA from Vanguard to TIAA Brokerage

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Topic Author
IowaNative
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Joined: Tue Nov 05, 2019 6:49 pm

Moving Roth IRA from Vanguard to TIAA Brokerage

Post by IowaNative » Tue Nov 12, 2019 11:05 pm

My Wealth Management Adviser at TIAA has suggested I move my Roth IRA, currently with Vanguard, to a TIAA brokerage account. I could own the same Vanguard funds and, according to her, I wouldn't pay any additional fees. Her suggestion came after I indicated my plan to start converting proceeds from my 403B to my Roth IRA before my RMDs start in five years.

Although this change would seem to facilitate the conversion process, I'm reluctant to put all of my retirement funds under TIAA. In fact, I've considered moving my TIAA funds to Vanguard after I retire. I haven't had a bad experience with TIAA but I'm uneasy with the way they offer advice. Although my WMA does not receive a fee or percentage for giving me advice, she does try to get me to put all of my monetary assets under TIAA's control. I don't blame her for doing so as her bonus is contingent on getting more funds under management. However, I don't feel I'm necessarily getting the advice that is best for me.

Any advice would be much appreciated.

mhalley
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Joined: Tue Nov 20, 2007 6:02 am

Re: Moving Roth IRA from Vanguard to TIAA Brokerage

Post by mhalley » Wed Nov 13, 2019 12:41 am

So your advisor is going to manage more of your money at no extra charge out of the goodness of her heart? How sweet. :beer
I am being a little snarky, but I don’t know what your advisor charges or what the fees are. But most likely they are higher than Vanguard’s.
Which of these is your fee structure:
https://smartasset.com/financial-adviso ... ces-review
Many prefer the simplicity of having only one co. I like having multiple brokerages myself in the very unlikely event of a hack.

retired@50
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Re: Moving Roth IRA from Vanguard to TIAA Brokerage

Post by retired@50 » Wed Nov 13, 2019 12:49 am

IowaNative wrote:
Tue Nov 12, 2019 11:05 pm
My Wealth Management Adviser at TIAA has suggested I move my Roth IRA, currently with Vanguard, to a TIAA brokerage account. I could own the same Vanguard funds and, according to her, I wouldn't pay any additional fees. Her suggestion came after I indicated my plan to start converting proceeds from my 403B to my Roth IRA before my RMDs start in five years.

Although this change would seem to facilitate the conversion process, I'm reluctant to put all of my retirement funds under TIAA. In fact, I've considered moving my TIAA funds to Vanguard after I retire. I haven't had a bad experience with TIAA but I'm uneasy with the way they offer advice. Although my WMA does not receive a fee or percentage for giving me advice, she does try to get me to put all of my monetary assets under TIAA's control. I don't blame her for doing so as her bonus is contingent on getting more funds under management. However, I don't feel I'm necessarily getting the advice that is best for me.

Any advice would be much appreciated.
I'm puzzled by this:
Although my WMA does not receive a fee or percentage for giving me advice, she does try to get me to put all of my monetary assets under TIAA's control. I don't blame her for doing so as her bonus is contingent on getting more funds under management.

If her bonus is contingent, how is this not an AUM fee? Who pays her bonus? If not you, then who...??? I'd be asking some really uncomfortable questions of this person until I fully understood.

I'd get a full listing / disclosure / whatever / of all the fees associated with your TIAA account and try to compare that to Vanguard. I too suspect that Vanguard is less expensive.

Regards,

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1789
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Re: Moving Roth IRA from Vanguard to TIAA Brokerage

Post by 1789 » Wed Nov 13, 2019 1:15 am

Consolidating your accounts at Vanguard is a good decision. I would go ahead and execute your plan or keep it going. Do you need this advisor?
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

pennywise
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Re: Moving Roth IRA from Vanguard to TIAA Brokerage

Post by pennywise » Wed Nov 13, 2019 7:40 am

You can check expense ratios on the TIAA website. We're moving our TIAA equity holdings from our 403b accounts into Vanguard IRAs and I just compared their respective equity index funds. TIAA charges .30, Vanguard expense ratio is .04. So there's one indicator that you may well be better served by not moving money from VG to TIAA.

As for the wealth advisors, I think that's a relatively new category of support that TIAA developed a few years ago for participants whose balances exceed some threshold. We got one and did work with him to develop a plan for us. There wasn't any out of pocket expense or hard sell per se, but he certainly acknowledged that the end game for TIAA was to have him serve as an AUM manager for our retirement accounts.

My latest experience with TIAA was receiving a form letter a few months ago telling us the advisor we worked with had left the company but they valued our account etc etc. Then crickets until a week ago when we called TIAA to get some balance information in preparation for the transfer of funds. Suddenly with 24 hour I started getting daily calls from a TIAA 'advisor'. Clearly the prospect of losing the account(s) has kick started TIAA into suddenly valuing us a lot more LOL.

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obafgkm
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Re: Moving Roth IRA from Vanguard to TIAA Brokerage

Post by obafgkm » Wed Nov 13, 2019 7:55 am

pennywise wrote:
Wed Nov 13, 2019 7:40 am
(...) We're moving our TIAA equity holdings from our 403b accounts into Vanguard IRAs and I just compared their respective equity index funds. (...)
If you don't mind me asking, are you just keeping your non-equity holdings at TIAA? Is that just TIAA Traditional or also bond funds and TIAA Real Estate? And why are you moving just the equity funds?

I have my 403(b) and an inherited spousal 403(b) at TIAA and am considering (when I retire in a few years) moving everything except TIAA Traditional and TIAA Real Estate to Fidelity, where my IRA and taxable accounts are. I wanted to hear your reasoning behind it.

aristotelian
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Re: Moving Roth IRA from Vanguard to TIAA Brokerage

Post by aristotelian » Wed Nov 13, 2019 10:02 am

I plan to do the opposite. When I leave my job, my plan is to transfer out any funds I don't have tied up in TIAA Traditional. Their stock and bond funds just dont compete. I havent decided what that will be but currently about half of my fixed income is in TIAA Traditional.

Topic Author
IowaNative
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Re: Moving Roth IRA from Vanguard to TIAA Brokerage

Post by IowaNative » Wed Nov 13, 2019 5:14 pm

Thank you all for these responses. WMAs get a bonus for bringing more funds under TIAA management. They have different arrangements that involve fees. My advisor claims the brokerage doesn’t generate additional fees beyond those Vanguard charges. I don’t feel I need an advisor right now. The only appeal of a TIAA brokerage account would be the ease of moving funds between accounts. Many people complain about how slow TIAA is to release your funds to non-TIAA accounts.

pennywise
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Re: Moving Roth IRA from Vanguard to TIAA Brokerage

Post by pennywise » Fri Nov 15, 2019 8:07 am

obafgkm wrote:
Wed Nov 13, 2019 7:55 am
pennywise wrote:
Wed Nov 13, 2019 7:40 am
(...) We're moving our TIAA equity holdings from our 403b accounts into Vanguard IRAs and I just compared their respective equity index funds. (...)
If you don't mind me asking, are you just keeping your non-equity holdings at TIAA? Is that just TIAA Traditional or also bond funds and TIAA Real Estate? And why are you moving just the equity funds?

I have my 403(b) and an inherited spousal 403(b) at TIAA and am considering (when I retire in a few years) moving everything except TIAA Traditional and TIAA Real Estate to Fidelity, where my IRA and taxable accounts are. I wanted to hear your reasoning behind it.
While working my husband and I both had a 75/25 allocation between the CREF stock index fund and TIAA Traditional. Now that we've retired my husband feels strongly that he wants a less volatile investment mix for the equity funds. I'm in general agreement although I have a longer time frame till RMDs--we don't expect to withdraw any money from these holdings till then.

In TIAA funds although there are lots of options available to shift to a more conservative fund allocation, the expense ratios are all higher than what's available in similar funds at Vanguard. So that is the primary reason for moving-it is a business decision since this money will grow over the years until we or our children access it. I'm using PAS for some period to have Vanguard guide us in developing a good overall plan but once I stop that, the ER benefits will be ongoing.

Secondarily we are also investing a chunk of taxable money in Vanguard and I feel comfortable that they will provide a comprehensive plan that will include both the IRAs and this money. Past experience with TIAA advisors was not awful. However comparing them with Vanguard there is a clear and obvious difference in how they advise. Vanguard I would describe as Fiduciary First, TIAA advisors always are clearly trying to sell something at TIAA that benefits them like their AUM plans.

Lastly, we are leaving the TIAA Traditional funds both because it's a solid conservative safe investment vehicle and because it avoids having all our retirement investments in one company. As much as I like and trust Vanguard, life can be unpredictable and I will feel better knowing all the money eggs aren't in one basket.

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