Moving from VG -> Schwab question

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radiowave
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Moving from VG -> Schwab question

Post by radiowave »

Spouse and I are moving our Vanguard accounts: tIRA, rIRA and taxable, to Schwab in the next few weeks. My specific question is the VG taxable account where we have the total stock mutual fund (VTSAX).

1. can I move VTSAX in kind to the new Schwab brokerage taxable account?
2. if so, are there any issues, e.g. I have to pay fees to sell (or buy) VTSAX at Schwab?

The capital gains tax to exchange VTSAX for the Schwab equivalent would be expensive.

I won't get into the reasons for our move, and overall have been happy with VG especially their mutual funds.

thanks
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ResearchMed
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Re: Moving from VG -> Schwab question

Post by ResearchMed »

radiowave wrote: Wed Jan 13, 2021 12:50 pm Spouse and I are moving our Vanguard accounts: tIRA, rIRA and taxable, to Schwab in the next few weeks. My specific question is the VG taxable account where we have the total stock mutual fund (VTSAX).

1. can I move VTSAX in kind to the new Schwab brokerage taxable account?
2. if so, are there any issues, e.g. I have to pay fees to sell (or buy) VTSAX at Schwab?

The capital gains tax to exchange VTSAX for the Schwab equivalent would be expensive.

I won't get into the reasons for our move, and overall have been happy with VG especially their mutual funds.

thanks
For starters, call Schwab to be sure you get the right answer(s).
There may be a fee to sell the Vanguard fund, but in some cases (not necessarily at Schwab), there's a fee to buy, but not to sell.

Also, ask them if, as part of the plan for you to transfer your money to them, they might give you some free transactions. (Note: If so, try to get in writing that there is a long term deadline if there is any deadline at all.)

However, if VTSAX is a long term holding, and IF you can indeed hold it at Schwab, then why not just keep it there intact, as is? Don't reinvest any dividends/cap gains, but take them in cash and apply them to other funds of your choice.

If it's a long term holding, and you'll later be removing money for retirement expenses, and IF there is a fee (lots of "ifs" there...), then the amount of that occasional fee probably won't move the meter.

RM
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retired@50
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Re: Moving from VG -> Schwab question

Post by retired@50 »

You could also consider moving the VTSAX holdings into VTI at Vanguard before the move. This is typically a tax-free move. That way, it's likely that you can buy and sell VTI without any fees at Schwab. You will have to deal with the market trading rules, etc. that are part of every ETF.

See link for discussion of the differences between ETFs and mutual funds: https://www.bogleheads.org/wiki/ETFs_vs_mutual_funds

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Pandemic Bangs
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Re: Moving from VG -> Schwab question

Post by Pandemic Bangs »

ResearchMed wrote: Wed Jan 13, 2021 12:59 pm
For starters, call Schwab to be sure you get the right answer(s).
There may be a fee to sell the Vanguard fund, but in some cases (not necessarily at Schwab), there's a fee to buy, but not to sell.

Also, ask them if, as part of the plan for you to transfer your money to them, they might give you some free transactions.
This. Ideally, if you have a B&M Schwab, make an appointment. We got a nice transfer bonus and some other concessions that I do not recall. You will get nothing once you are already there.
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Nate79
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Re: Moving from VG -> Schwab question

Post by Nate79 »

Yes you can move in kind (but I would convert to VTI at Vanguard first).

There should be no fees to sell at Schwab but there will be to buy.
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radiowave
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Re: Moving from VG -> Schwab question

Post by radiowave »

Thanks for posts so far.

Yes, will consider VTI if VTSAX has fees attached. Still waiting for reply from Schwab on that so I thought I'd ask forum members for some feedback.

I have been unable to get any feedback on transfer bonus other than a referral code from a current Schwab client. I do have a regional office close to me but have not had a response to my email to the local branch sent last week.
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ResearchMed
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Re: Moving from VG -> Schwab question

Post by ResearchMed »

Have you called them, or specifically the local office in this case?
Even if you need to leave a message...
... and if it's a meaningful amount that you want to transfer, mention a round number to get their attention faster. (Sad, but true, most likely.)

Once one is a client, there is 24/7 phone and chat service.
We've found that we could get most answers and get help for most things using chat, which was a real surprise.

I always copy the chat dialogue session as it continues, to have a record, just in case, etc.

Just about our only "disappointment" (in quotes, because it's not really disappointing) with Schwab thus far (>10 years) is that they stopped issuing "same day" checks. They don't deal with cash, so we'd (very rarely) request a check, and then take it next door where we have a smaller account at BoA, and cash it there, or deposit it.
Now, one needs to give a day's advance notice. Oh the horror! :D

They were very easy to deal with when we set up MIL's trust account. They had no trouble accepting her existing Power of Attorney docs (for DH), and made no attempt to try to get/force us to use their own forms.
And these were rather old, not executed recently.

So far, everything has been easy.

We did initially get some "sales type" calls and emails, but when we made it clear that we did *NOT* want to receive anything, and "don't call us, we'll call you", we've never been bothered since.
But they are there with good service when needed.

And don't forget to ask about a bonus for transferring in :wink:

RM
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anon_investor
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Re: Moving from VG -> Schwab question

Post by anon_investor »

radiowave wrote: Wed Jan 13, 2021 1:56 pm Thanks for posts so far.

Yes, will consider VTI if VTSAX has fees attached. Still waiting for reply from Schwab on that so I thought I'd ask forum members for some feedback.

I have been unable to get any feedback on transfer bonus other than a referral code from a current Schwab client. I do have a regional office close to me but have not had a response to my email to the local branch sent last week.
I recommend moving the VTSAX to VTI. I did a mutual fund to ETF conversion last year at Vanguard. It was tax free, my cost basis converted properly. It did take a phone call. There was a 30 minute wait time, but I chose the option to have Vanguard call me back and time actually spend on the phone was only around 10 minutes. The conversion process completed the day after my call.
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radiowave
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Re: Moving from VG -> Schwab question

Post by radiowave »

My wife was on hold to VG the other day for 2 hours, when they finally picked up the call it took a few minutes for her to work through some issues with the CSR, then put on hold so he could check on something and got disconnected. That is one of the things that is troubling us working with VG.
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MishkaWorries
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Re: Moving from VG -> Schwab question

Post by MishkaWorries »

You can download Schwab's price guide pdf. It says mutual funds charge up to $49.99 to buy and sell for $0.00.

Much better to convert to VTI at Vanguard because that wouldn't trigger taxes. Then transfer VTI to Schwab and just buy more VTI as planned.
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