Annoyed with Fidelity

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floydtime
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Annoyed with Fidelity

Post by floydtime » Sat Apr 16, 2011 5:30 pm

So as a 15+ year Fidelity account holder, I was surprised today by seeing my wife's Roth IRA get docked a "closeout fee" of $50 by Fido when she decided to transfer it over to Vanguard.

This is all the more annoying since it drops her *just* below 10k ($9983.23 to be exact), so now it looks like she can't get the Admiral fund she wanted to get through Vanguard in the first place. :annoyed


So I called Fidelity, and asked wtf? I figured it must have been in the fine print somewhere, which the gentleman on the line confirmed. He said he could not cancel the fee, but that I could call Vanguard, and that they might credit it back (!?).

I made it clear to him that if Vanguard did that, then Fido was going to see all of my money (my Roth, my 401k when I retire, our taxable accounts) go bye-bye. 8)
"Do not value money for any more nor any less than its worth; it is a good servant but a bad master" - Alexandre Dumas

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Post by MWCA » Sat Apr 16, 2011 5:44 pm

What did they say when you threatened to move all your money?
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Post by DSInvestor » Sat Apr 16, 2011 5:48 pm

Here's a PDF files showing Fidelity's complete commission and fee schedule:
http://personal.fidelity.com/accounts/p ... D-0105.pdf

The Close Account fee is listed there for IRA accounts and there is no mention of anything about waiving this fee. Some fees can be waived if certain asset levels or trade minimums are met.
Last edited by DSInvestor on Sat Apr 16, 2011 5:52 pm, edited 1 time in total.

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Post by retiredjg » Sat Apr 16, 2011 5:50 pm

It is annoying, but you should probably not be annoyed. It seems that everyone has an account closing fee. You just didn't know it. Since it is an IRA, they have paperwork that must be done and sent to multiple places like the IRS, so I'm not sure the fee is unreasonable.

It would be great if VG will reimburse you the fee. I would also ask if they will give you Admiral Shares - I think they will understand how your amount fell just shy of the mark. I would hope you would get at least one of those things. It would be interesting to hear how it works out for you.

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Post by floydtime » Sat Apr 16, 2011 5:52 pm

MWCA wrote:What did they say when you threatened to move all your money?
Well, I can't move all my money (or even most of it) until I retire, which I am sure he knew. But I did ask if there would be a fee when I rolled my Fido 401k to a Vanguard IRA, and he hesitated...and then said no. :)

The part that really surprised me was when he said to ask Vanguard to reimburse the fee.
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TT
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Post by TT » Sat Apr 16, 2011 5:56 pm

I encountered the same fee when I moved my IRA and my wife's over to Vanguard. I was not able to circumvent the fee. So I will never do business with Fidelity again.

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Post by MWCA » Sat Apr 16, 2011 6:15 pm

We are planning to move our accounts from Fidelity at retirement. I guess that 50 dollar account fee pays for the fancier website.. :(
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Re: Annoyed with Fidelity

Post by tfb » Sat Apr 16, 2011 6:45 pm

floydtime wrote:I made it clear to him that if Vanguard did that, then Fido was going to see all of my money (my Roth, my 401k when I retire, our taxable accounts) go bye-bye. 8)
It makes no sense one would choose one's financial service provider based on $50. If Fidelity didn't charge the $50 fee, you would stay but if they charge you would go? If you like Vanguard, go to Vanguard regardless.

Why did you choose Fidelity and not Vanguard to begin with? Whatever that reason was, it's worth more than $50.
Last edited by tfb on Sat Apr 16, 2011 6:50 pm, edited 1 time in total.
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amdmaxx
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Post by amdmaxx » Sat Apr 16, 2011 6:48 pm

Your 10k Admiral upgrade should be done with next round of dividend payout or maybe if the value goes over 10k sooner. (I assume you can't simply add to it currently).

Most companies charge a fee when you close/move an account.

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Post by beyou » Sat Apr 16, 2011 7:00 pm

Almost any broker charges a fee to move an account outbound

VBS policy is to pay you fee to get the acct transfer done, but then require you to reimburse them. Some brokers will do this in case you have no cash at the sending firm, and this way you can avoid selling securities to pay the fee. If you have cash at the sending firm, they will take it and the receiving firm has no involvement.

There may be other firms that will reimburse you for the fee as part of the cost of buying customers, but not the policy at VBS.

And frankly I don't see why they should reimburse.
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Post by beyou » Sat Apr 16, 2011 7:02 pm

This really made me laugh after seeing 2 posts with complaints about Vanguard, and now this one about Fido. They are all in business to charge fees, one way or another, and they all want to provide good service (but will inevitably make mistakes and/or charge fees we do not want to pay).
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Post by rustymutt » Sat Apr 16, 2011 7:11 pm

MWCA wrote:What did they say when you threatened to move all your money?
Don't let the door hit your bottom on your way out.
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Tex
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Post by Tex » Sat Apr 16, 2011 7:21 pm

Fidelity charged me $50 for transferring a Roth IRA 5 years ago. It's standard practice for them. You'll most likely make up the $50 in savings based off of the lower expense ratios at Vanguard (assuming you weren't already using the Fidelity index funds).

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Post by FedGuy » Sat Apr 16, 2011 7:26 pm

I hate random fees as much as the next Boglehead, but account closure and transfer fees are common, and $50 is pretty much the market rate (I've paid $75 fees and have seen a $100 fee as well).

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Avoid the Fees This Way

Post by nvboglehead » Sat Apr 16, 2011 8:28 pm

I moved a small IRA from Fidelity to Vanguard and easily avoided the fee. Here is what I did:

I redeemed the shares within the IRA and had the cash deposited into my taxable Fidelity account. I wrote a check for the balance and sent it to Vanguard with instructions that the funds were a IRA rollover. I did this in 2009 and it went smoothly, with all important parties - Fidelity, Vanguard and the IRS.

If you don't have a taxable Fidelity account, just ask them to send you a check for the proceeds. Endorse the check over to Vanguard and send it with your letter of instructions.

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Post by texas_archer » Sat Apr 16, 2011 9:14 pm

This is the reason I haven't "finalized" my IRA accounts with WellsTrade. When I opened the accounts on the phone, they never mentioned a fee if I decided to close them. Then, once I recieved the welcome packet with the paper in it they require you to sign and mail back I saw the fee and said screw it. They can keep the account at 0 forever if they want, Im not mailing that paper back to them now.

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Post by FedGuy » Sat Apr 16, 2011 9:57 pm

texas_archer wrote:This is the reason I haven't "finalized" my IRA accounts with WellsTrade. When I opened the accounts on the phone, they never mentioned a fee if I decided to close them. Then, once I recieved the welcome packet with the paper in it they require you to sign and mail back I saw the fee and said screw it. They can keep the account at 0 forever if they want, Im not mailing that paper back to them now.
How much is the fee?

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Post by retcaveman » Sat Apr 16, 2011 10:04 pm

FWIW, we had to pay a fee when we moved two IRA's from Schwab to Vanguard. I figured it was a "good bye gift" ...for them.

While probably not a surprise to many here, the older I get, I tend to see the money motivation everywhere. It seems that more and more companies are employing little annoying "fees" to increase their profits. The worst examples I can think of are the airlines and banks. I read recently that airline profits are mainly due to these fees which,when added up are enormous.

I carry the image from the old cowboy movies where we are inside a circle of covered wagons and are under attack from people wanting to get at our money. They keep probing to find weaknesses in our defenses to get at us.

As I've come to say to my ever suffering spouse, "it's all about the money."
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Post by bh » Sat Apr 16, 2011 11:10 pm

there are places that will re-imburse.............. would probably have to use their preferred etfs/funds to get commissions free but there could be an acceptable work-around

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wells trade

Post by joppy » Sat Apr 16, 2011 11:34 pm

FedGuy wrote:
texas_archer wrote:This is the reason I haven't "finalized" my IRA accounts with WellsTrade. When I opened the accounts on the phone, they never mentioned a fee if I decided to close them. Then, once I recieved the welcome packet with the paper in it they require you to sign and mail back I saw the fee and said screw it. They can keep the account at 0 forever if they want, Im not mailing that paper back to them now.
How much is the fee?
The wells trade account outbound transfer fee is $95. The IRA closing fee is an additional $95. So they charge you even if you sell everything in an IRA and ask for a check. I didn't see a taxable account closing fee.

https://www.wellsfargo.com/investing/st ... _fees/fees

- Joppy

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Post by Anon1234 » Sun Apr 17, 2011 12:16 am

Did you ask if you could pay the fee from outside the account. i.e. send in a check?

That would be better than losing the tax advantaged money, kinda like an extra little contribution.

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Post by billjohnson » Sun Apr 17, 2011 12:34 am

TT wrote:I encountered the same $50 fee when I moved my IRA and my wife's over to Vanguard. So I will never do business with Fidelity again.
:lol: :lol: :lol:

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Post by jpsfranks » Sun Apr 17, 2011 1:57 am

They once charged me a $10 "index account low balance fee" for having an index fund with a balance of less than $10k. It was on the Fidelity Four-in-One when I first opened in my Roth. I had only one year's contribution in the account so it was impossible to have $10k. But this is pretty much the only unexpected fee they've ever charged me in all the years I've had accounts there, so in all in all I'm very happy with Fidelity. If this is your first annoying fee in 15 years I'd say you're doing pretty good too.
floydtime wrote:The part that really surprised me was when he said to ask Vanguard to reimburse the fee.
They suggested this because Fidelity will often reimburse transfer out fees charged by other custodians when transferring an account TO Fidelity. To my knowledge Vanguard does not.

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Re: Annoyed with Fidelity

Post by YDNAL » Sun Apr 17, 2011 7:14 am

floydtime wrote:This is all the more annoying since it drops her *just* below 10k ($9983.23 to be exact), so now it looks like she can't get the Admiral fund she wanted to get through Vanguard in the first place. :annoyed
Tell VG what happened and, since they should be happy to get their hands on assets from another company, they may let you have Admiral shares when your wife is only short $16.77.
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Re: Annoyed with Fidelity

Post by bh » Sun Apr 17, 2011 7:39 am

YDNAL wrote:
floydtime wrote:This is all the more annoying since it drops her *just* below 10k ($9983.23 to be exact), so now it looks like she can't get the Admiral fund she wanted to get through Vanguard in the first place. :annoyed
Tell VG what happened and, since they should be happy to get their hands on assets from another company, they may let you have Admiral shares when your wife is only short $16.77.
if she has not made 2011 contribution then 10k minimum is nothing to analyze..........seems to me you have to decide a) stay b) move and pay the fee c) move and get the fee reimbursed

what type of fund is it anyway?...........if something fairly standard like s&p 500 type of index then i would expect you can remedy your situation fairly easily

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Post by Mian » Sun Apr 17, 2011 8:16 am

The last time I used a "full-service" broker, I was charged 1/8 pt. on a position to sell it, over $300 at the time.

Those were the bad old days before discount brokers became mainstream and trading became largely computerized.

We're luckier today. I suggest you don't worry about the $50 (which I would suppose compensates Fido for the administrative 'hassle' of transferring the account) and count your blessings that the cost of investing, in general, is much cheaper than it was 25 years ago.

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Post by tibbitts » Sun Apr 17, 2011 9:05 am

I would be surprised, and not pleased, if VG either reimbursed any fees or waived the admiral minimum. Expensive financial service companies might very well do that, but that's why they're expensive.

Also, don't bother threatening to move all your business, unless maybe you have hundreds of millions of dollars. Nobody you can talk to will care.

Paul

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Post by SpringMan » Sun Apr 17, 2011 9:30 am

I accomplished moving a tIRA from Fidelity to Vanguard without incurring any fees. My Fidelity account had some worthless stock (old Kmart) that would not transfer to VBS and at the time Fidelity could not purge them from my account. The 0 balance account at Fidelity is technically not closed and there have been no small balance fees assessed either.
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Post by Opponent Process » Sun Apr 17, 2011 9:37 am

I also heard that Fidelity charges you a ratio of your assets every year for "fund management". Can anyone confirm this? This would be another reason to avoid them.
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Post by beyou » Sun Apr 17, 2011 9:41 am

Brokerage firms can arbitrarily decide whether to charge or waive acct transfer fees. OTOH mutual funds must treat all shareholders of the same share class exactly the same, by law. So if they have a $10k min balance to open an acct, no they can not waive that for one customer.

If you can get $10k into an admiral and the balance drops below, that's a different story, but in this case you need to get the balance up.
Just open the investor shares and convert once the balance rises.
The fee difference isn't much in $ on such a small account balance,
and it will only be for a short time if your account balance rises.
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Post by Tex » Sun Apr 17, 2011 9:43 am

Now that this has become a Fidelity hate-fest, let me add that I was extremely happy with their customer support and their local office. That and they had an amazing website.

Having said that, I'd rather have my assets at Vanguard because it fits better with my investing persona. Boglehead all the way.

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Post by SpringMan » Sun Apr 17, 2011 9:53 am

Opponent Process wrote:I also heard that Fidelity charges you a ratio of your assets every year for "fund management". Can anyone confirm this? This would be another reason to avoid them.
Not for their standard investment accounts. They do have a Portfolio Advisory Service that charges this type of fee. http://personal.fidelity.com/products/wealth/?bar=p
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Post by tibbitts » Sun Apr 17, 2011 10:01 am

Opponent Process wrote:I also heard that Fidelity charges you a ratio of your assets every year for "fund management". Can anyone confirm this? This would be another reason to avoid them.
Fidelity does not charge any such fees unless you ask them to do "fund management" specifically. VG charges for that as well. As with VG, the only charges are for management within the funds you select.

Paul

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Post by Default User BR » Sun Apr 17, 2011 11:04 am

TD Ameritrade also charges a fee ($50 I think) to transfer an IRA to another custodian. I found out though that they don't charge it for rollovers to a qualifed plan. Had I wanted to move to another brokerage, I could have rolled it into the 401(k) and back out to another place. In my case, I only wanted to roll in (hiding it for Roth conversion).

I don't know what any one else's policy is on that.




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Post by bru » Sun Apr 17, 2011 11:22 am

I had converted money from a Fido rollover IRA to a new Roth, also at Fido. Then I transferred the Roth to Vanguard and was hit with the $50 fee for closing the Fido Roth. Part of it was my fault. I was trying to beat the year end deadline so rather than transferring to Vanguard and then converting I created the Roth at Fido before transferring (and closing) it to Vanguard.

I called and complained and Fido reimbursed the $50. I suppose still being a Premium customer helped. Vanguard of course said they won't absorb the fee.

I expect to eventually move all my Fido accounts to Vanguard so I know I will pay some account closing fees. Unfortunately it's the cost of doing business. I will have to try to remember the way the one poster avoided the fee but I imagine I will just pay and move on.

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Post by dharrythomas » Sun Apr 17, 2011 4:14 pm

I've had 401(k)s with a number of fund companies. Overall Fidelity is better than average, though like most companies they can justify behavior that I would consider wrong when given the opportunity for a little extra profit (Fidelity Destiny Funds).

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Post by Uninvested » Sun Apr 17, 2011 4:50 pm

I wouldn't ask for the fee. Because they couldn't put it into the ira and then you would still be under 10K. They can only roll over what they get. For the fee......forget about it. Its one and done. Just move everything to Vanguard and be done with it. Life's too short.

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Post by TheEternalVortex » Sun Apr 17, 2011 5:06 pm

You could have just bought the Vanguard ETF for $8 at Fidelity and saved $42 + lots of hassle. :)

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Post by floydtime » Mon Apr 18, 2011 10:05 am

Sorry to have created a firestorm, but thank you for the responses. I see that I'm not the only one!

To let you know where this went and where it's going, and to answer a few questions from above...

-I didn't "choose" Fidelity, they were forced upon me through my employer 401k. Of course, we didn't have to put our Roths with them, but when we opened those, we did it at Fido out of a perceived (at the time) convenience. I now regret it.

-Fidelity will NOT let us pay by check or transfer or credit card or anything else. They insisted that it "must" come out of the Roth itself. Just more fuel.

Here is what I plan to do. I'm going to transfer $50 into my wife's Roth when it shows up at Vanguard. If the IRS ever asks down the road, I will explain what it was for. If I get taxed/penalized on the $50 later on, so be it.
"Do not value money for any more nor any less than its worth; it is a good servant but a bad master" - Alexandre Dumas

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Post by DSInvestor » Mon Apr 18, 2011 10:43 am

Floydtime, if you make an excess contribution to IRA, you will be penalized every year until you correct the excess condition.

See Fairmark's Excess Contributions to Roth IRAs:
http://www.fairmark.com/rothira/excess.htm

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Post by Random Musings » Mon Apr 18, 2011 10:58 am

The founding Johnson family thanks you for the money - well, about half of it. Other shareholders of FMR LLC thank you for the rest.

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Post by floydtime » Mon Apr 18, 2011 11:16 am

DSInvestor wrote:Floydtime, if you make an excess contribution to IRA, you will be penalized every year until you correct the excess condition.

See Fairmark's Excess Contributions to Roth IRAs:
http://www.fairmark.com/rothira/excess.htm
Thanks. Yeah, I'm good with that. I will get penalized 6% of the excess contribution amount ($3.00) every year until I correct it. Well I can correct it next year when I am allowed to contribute again. All's well that ends well.

EDIT -> In fact, I could just contribute $17 to get the account to $10k, and then get penalized $1.02.

The founding Johnson family thanks you for the money - well, about half of it. Other shareholders of FMR LLC thank you for the rest.
Nah, it's a net loss for them and a net gain for me. The $50 is just defraying their loss a little bit.

Yes, I know that, since they are bazillionaires, they don't care (which speaks volumes!), but I'm now perfectly happy with their loss and my gain. 8)
"Do not value money for any more nor any less than its worth; it is a good servant but a bad master" - Alexandre Dumas

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Post by paulob » Tue Apr 19, 2011 8:15 am

I'm curious. Does Vanguard charge a fee to transfer out and/or close an IRA?
Paul

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Post by vesalius » Tue Apr 19, 2011 8:38 am

floydtime wrote:
DSInvestor wrote:Floydtime, if you make an excess contribution to IRA, you will be penalized every year until you correct the excess condition.

See Fairmark's Excess Contributions to Roth IRAs:
http://www.fairmark.com/rothira/excess.htm
Thanks. Yeah, I'm good with that. I will get penalized 6% of the excess contribution amount ($3.00) every year until I correct it. Well I can correct it next year when I am allowed to contribute again. All's well that ends well.

EDIT -> In fact, I could just contribute $17 to get the account to $10k, and then get penalized $1.02.

The founding Johnson family thanks you for the money - well, about half of it. Other shareholders of FMR LLC thank you for the rest.
Nah, it's a net loss for them and a net gain for me. The $50 is just defraying their loss a little bit.

Yes, I know that, since they are bazillionaires, they don't care (which speaks volumes!), but I'm now perfectly happy with their loss and my gain. 8)
Have you done the math and figured out what the minimal saving will be on $10K for the difference in admiral and investors ER over a single year? Probably equal or less than the potential IRS fee, which is also minimal. Other than to prove a point and the mental satisfaction, why bother? Make the transfer and after next years contribution Vanguard will automatically upgrade you to admiral shares. Easier and less potential hassle

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Re: Annoyed with Fidelity

Post by YDNAL » Tue Apr 19, 2011 8:47 am

floydtime wrote:This is all the more annoying since it drops her *just* below 10k ($9983.23 to be exact), so now it looks like she can't get the Admiral fund she wanted to get through Vanguard in the first place. :annoyed
floydtime wrote:Here is what I plan to do. I'm going to transfer $50 into my wife's Roth when it shows up at Vanguard. If the IRS ever asks down the road, I will explain what it was for. If I get taxed/penalized on the $50 later on, so be it.
Why would you do that when the deficiency to get Admiral shares is $16.77? It is quite likely that you can get over the $10K speed-bump at any time in the short-term.

Did you call Vanguard?
Previously, YDNAL wrote:Tell VG what happened and, since they should be happy to get their hands on assets from another company, they may let you have Admiral shares when your wife is only short $16.77.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

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Post by Default User BR » Tue Apr 19, 2011 11:53 am

paulob wrote:I'm curious. Does Vanguard charge a fee to transfer out and/or close an IRA?
No, at least not as of a few years ago when I transferred to Wells Fargo. Their fee schedule should be on their web site.



Brian

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Post by paulob » Tue Apr 19, 2011 2:02 pm

Default User BR wrote:
paulob wrote:I'm curious. Does Vanguard charge a fee to transfer out and/or close an IRA?
No, at least not as of a few years ago when I transferred to Wells Fargo. Their fee schedule should be on their web site.

Brian
I was unable to find it on their website (I checked before I posted above).
Paul

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Post by Easy Rhino » Tue Apr 19, 2011 2:29 pm

TT wrote:So I will never do business with Fidelity again.
That usually happens when you close accounts... :roll:

I closed transferred my stocks out of Schwab a few years ago. I was left with about .1 shares of a single stock, worth like $6. I called and asked how to clear it out. The rep on the phone said "well, you could place a sell order". to which I responded "i'm not going to pay a $10 commission to sell $6 worth of fractional stock". He then offered to have it sold at close of day for no commission.

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Re: Annoyed with Fidelity

Post by floydtime » Tue Apr 19, 2011 4:40 pm

YDNAL wrote:Why would you do that when the deficiency to get Admiral shares is $16.77?
True. As I mentioned, the IRS penalty for $17 would be $1.02, so this is what I'm leaning towards doing.

otoh, I may just get investor shares for a year, which, with an ER diff of .13 is about $13. I'll decide when the money shows up at VG.
YDNAL wrote:Did you call Vanguard?
I did, but again, I did not expect them to do something to cover for Fido's fee. They didn't, and said they couldn't bend the rules for the Advisor shares (again, I didn't expect, or even necessarily want, them to).

I am now moving my own Roth over (-$50), as well as our taxable account. My 401k will follow when I retire in a few years. I'll miss the fancy web site, but that's about it. :)
"Do not value money for any more nor any less than its worth; it is a good servant but a bad master" - Alexandre Dumas

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RPHinTN
Posts: 3
Joined: Sun Jan 09, 2011 11:04 pm

account transfer fees

Post by RPHinTN » Tue Apr 19, 2011 9:27 pm

Wow, $50, to transfer your account out of Fidelity. Well thats a bargain, last year I transferred my Roth, my wife's Roth and my wife's traditional IRA from Morgan Keegan to Vanguard. I was charged a $110 transfer fee for each of the 3 accounts plus charged $40 yearly administered fee for each accounts for a total of $450. Best $450 fee I have every paid. I got away from loaded American funds and yearly administation fees from Morgan Keegan.

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