Leaving Fidelity

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pbziegler
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Leaving Fidelity

Post by pbziegler » Wed Mar 19, 2014 10:22 am

I have been a Vanguard fan during more than 40 years as an investor. Went to Fidelity a few years ago because I though if I died my wife wouldn't know how to managed the money. First guy we had was fine--not aggressive in pushing Fidelity products. He left and the new person immediately wanted me to cash out my Vanguard ETFs in my IRA and buy a variable annuity. I told her I didn't like annuities but she was very persistent. I decided that she was more interested in her commission. I have more than enough income from Social Security and several rental properties I own. I hardly take any money from my portfolio which has more money in it than I could ever spend. So why would I lock up a lot of money in a lifetime annuity given what I see must be about 5% total in various fees. So I am bringing all my money back into my Vanguard accounts and back on this great Boglehead list.

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DonCamillo
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Re: Leaving Fidelity

Post by DonCamillo » Wed Mar 19, 2014 10:30 am

Simply because you got a jerk doesn't (necessarily) mean the company is bad. I had a terrible rep assigned to me at TIAA CREF. Just told them I never wanted any further contact from her. You should do the same at Fidelity. Call in, talk to a telephone rep (not your rep) and explain the problem. You might be amazed at the response you get. I am speaking from experience, but I was considering leaving Fidelity and have a large account.
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danwhite77
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Re: Leaving Fidelity

Post by danwhite77 » Wed Mar 19, 2014 10:31 am

Welcome home! :D
"While some mutual fund founders chose to make billions, he chose to make a difference." - Dedication to Jack Bogle in 'The Bogleheads' Guide to Investing'.

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Re: Leaving Fidelity

Post by placeholder » Wed Mar 19, 2014 10:38 am

When I was at Fidelity I don't think they ever contacted me that I can recall (self directed brokerage) also remember that no one ever forces you to talk to someone.

Call_Me_Op
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Re: Leaving Fidelity

Post by Call_Me_Op » Wed Mar 19, 2014 11:05 am

Does the advisor have a fiduciary duty? This recommendation would be a flagrant violation.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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abuss368
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Re: Leaving Fidelity

Post by abuss368 » Wed Mar 19, 2014 11:11 am

Glad to hear you are moving to the only shareholder owned company there is - Vanguard.

By the way, Vanguard does offer a couple asset / portfolio management services in the event it is need by you or your spouse. You can review these services on their website or perhaps by contacting them for more information.

Thank you Jack Bogle!
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + U.S. & International REITs

scrabbler1
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Re: Leaving Fidelity

Post by scrabbler1 » Wed Mar 19, 2014 10:55 pm

pbziegler wrote:I have been a Vanguard fan during more than 40 years as an investor. Went to Fidelity a few years ago because I though if I died my wife wouldn't know how to managed the money. First guy we had was fine--not aggressive in pushing Fidelity products. He left and the new person immediately wanted me to cash out my Vanguard ETFs in my IRA and buy a variable annuity. I told her I didn't like annuities but she was very persistent. I decided that she was more interested in her commission. I have more than enough income from Social Security and several rental properties I own. I hardly take any money from my portfolio which has more money in it than I could ever spend. So why would I lock up a lot of money in a lifetime annuity given what I see must be about 5% total in various fees. So I am bringing all my money back into my Vanguard accounts and back on this great Boglehead list.


After series of good, polite Fidelity reps at the local office, I had a bad, pushy one a few years ago. I simply reported him to his boss and I got reassigned to another rep. You should do the same.

Khanmots
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Re: Leaving Fidelity

Post by Khanmots » Wed Mar 19, 2014 11:11 pm

DonCamillo wrote:Simply because you got a jerk doesn't (necessarily) mean the company is bad. I had a terrible rep assigned to me at TIAA CREF. Just told them I never wanted any further contact from her. You should do the same at Fidelity. Call in, talk to a telephone rep (not your rep) and explain the problem. You might be amazed at the response you get. I am speaking from experience, but I was considering leaving Fidelity and have a large account.

If his purpose in moving to Fidelity was to have faith that they'd provide his wife good advice were he to move on, the fact that they have reps pushing bad advice like this kind of defeats the whole purpose.

Yeah... while he's here and able he can get assigned to different ones. But will his wife, the person he's concerned about not knowing how to manage the money, be aware that it is bad advice?

I'd be reporting the rep in question. But like the OP, I'm not sure I'd be staying. I'd be investigating other organizations for the desired future hand-holding.

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BL
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Re: Leaving Fidelity

Post by BL » Wed Mar 19, 2014 11:15 pm

This is what concerns me in recommending Fidelity. They have good Spartan funds but if you or your surviving spouse gets caught by a rep at a bad time, they could successfully recruit you into their lair. At least at Vanguard, it is hard to find any funds with large ERs, as the active funds I see are quite reasonable. I like the idea of their low-cost advice folks if one should want some guidance.

airahcaz
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Re: Leaving Fidelity

Post by airahcaz » Wed Mar 19, 2014 11:21 pm

Fidelity has treated me well, and I love their online chat feature. Having said that, our family is serviced by their PCG group. Sounds like you would qualify and you should ask for a rep.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)

Greatness
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Re: Leaving Fidelity

Post by Greatness » Thu Mar 20, 2014 7:32 am

I use both Fidelity and Vanguard. Most of my $$ is in Fidelity due to their cash management features. However, I also like Vanguard very much. The telephone reps are very nice and I cannot recommend enough the services of Fidelity. I have a significant amount of money at Fidelity, never had a problem with them. No one tries to up-sell me any products or services as well. Only have about 50k at Vanguard right now, so not a very big account currently. However, I sweep a few grand there a month and place it in a SNP fund. It's been growing nicely. Again, about Fidelity, never had an issue with them. While I like both, I do like Fidelity more due to the options and full services. However, to save on trading fees on Vanguard funds, I buy directly through Vanguard. As for one being a "shareholder" company and the other not, it really doesn't matter. All in all, I am sure the Bogle family is doing as well or better than then Johnson family. Same game, different beast. That is all. For the record, I also use Charlie Cotton Schwab for my non-Fidelity and non-Vanguard investments as well. I just do not like to putting all my eggs in one or two baskets. Need to have options and flexibility.

Ron
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Re: Leaving Fidelity

Post by Ron » Thu Mar 20, 2014 7:42 am

Greatness wrote:I use both Fidelity and Vanguard. Most of my $$ is in Fidelity due to their cash management features. However, I also like Vanguard very much. The telephone reps are very nice and I cannot recommend enough the services of Fidelity. I have a significant amount of money at Fidelity, never had a problem with them. No one tries to up-sell me any products or services as well. <snip> As for one being a "shareholder" company and the other not, it really doesn't matter.

+1

- Ron

Jack FFR1846
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Re: Leaving Fidelity

Post by Jack FFR1846 » Thu Mar 20, 2014 7:43 am

Why would your wife need a person to talk to about the investments?

I don't think it matters beyond the ERs if you choose appropriately. There are plenty of spartan index funds available with ERs comparable to Vanguard. What is the concern for your wife after you are gone? The only thing I can think of is rebalancing and if, as you say you are able to live on SS, then chances are pretty good that your wife could do the same and if the portfolio gets a bit out of balance from lack of attention, so what?

As mentioned, Fidelity has their online chat. No pushing, when you get the information you need, x out of the window. It's what I do.

Sure, you can move to Vanguard, but I would again ask the question.....why are you asking them for advice? I have never had anyone from Fidelity call me to give advice. They call when my account exec changes. I've been with Fidelity for over 20 years.

If the rebalance feature is really, really important, then pick a retirement year fund and just leave it there forever. To me, the higher ER isn't worth it but I'm not you.
Bogle: Smart Beta is stupid

airahcaz
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Re: Leaving Fidelity

Post by airahcaz » Thu Mar 20, 2014 7:47 am

On the topic of diversifying institutional risk, any risk of either of these institutions not being around in the future? Any risk of having (and trusting) a fidelity fund vs a vanguard one (assuming the auditors do a proper job each year, but what about potential errors or accounting issues, etc.?)

I hear of folks splitting assets across Fido and V for these reasons, but I think we know both are solid institutions. But is there an element of the unknown, and "anythng can happen"?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course. (Plagiarized, but worth stealing)

vested1
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Re: Leaving Fidelity

Post by vested1 » Thu Mar 20, 2014 9:50 am

If everyone were astute in the management of their finances then it wouldn't make much difference if they were invested at Fidelity or Vanguard. Unfortunately that's not the case, as stated by the OP. What if Fidelity approached his wife after his death with "A great Investment" of a variable annuity or advised changing to any number of managed portfolios with high ER's and 12b loads?

Couldn't happen? It did happen to me when I was uninformed of the consequences and now I'm waiting out a fixed annuity until next year that has tied up 1/3 of my IRA for 5 years when it matures while making the fidelity rep 6% on the sale (12k commission), something that was conveniently omitted when I was approached by my rep with the "opportunity".

Say what you want, Fidelity is in the business to make money and some of their reps will take advantage of you if you allow them to. I am in a similar position as the OP, with a wife who is uninterested in our investments regardless of my attempts to involve her, which is something I don't see changing if I die before her. She may become interested out of necessity but by then it may be too late.

Therefore I prefer to have my accounts with someone who I trust more to have her best interests in mind.

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Re: Leaving Fidelity

Post by Call_Me_Op » Thu Mar 20, 2014 10:06 am

Recommending a VA for an IRA sounds like simple incompetence to me. I really have a hard time believing this could happen.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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damjam
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Re: Leaving Fidelity

Post by damjam » Thu Mar 20, 2014 10:23 am

Greatness wrote:... All in all, I am sure the Bogle family is doing as well or better than then Johnson family. ...


Correct me if I am wrong, but it is my understanding that the Johnson family counts their wealth in the billions and the Bogles in the, at most, tens of millions. Big difference to me.

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Random Musings
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Re: Leaving Fidelity

Post by Random Musings » Thu Mar 20, 2014 10:29 am

damjam wrote:
Greatness wrote:... All in all, I am sure the Bogle family is doing as well or better than then Johnson family. ...


Correct me if I am wrong, but it is my understanding that the Johnson family counts their wealth in the billions and the Bogles in the, at most, tens of millions. Big difference to me.


Courtesy of a higher cost structure, in the aggregate. Educated investors on this board utilize Fidelity because they will avoid their higher cost products and services.

RM
I figure the odds be fifty-fifty I just might have something to say. FZ

Jack FFR1846
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Re: Leaving Fidelity

Post by Jack FFR1846 » Thu Mar 20, 2014 10:35 am

So I have to ask those at Vanguard. Do Vanguard reps never call with investment advice? I know my own experience with Fidelity isn't everyone's......but as I mentioned, they call when a new rep takes over. Nothing else.

Is there some underlying reason why a Vanguard rep would not act the same as one from Fidelity? Serious question. Does anyone know if they are paid differently?

I tend to start by distrusting an institution. Maybe that's why I don't get calls. Every new rep gets told that I self direct and want no interferance. Perhaps my wording scares them from ever calling again.
Bogle: Smart Beta is stupid

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Ged
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Re: Leaving Fidelity

Post by Ged » Thu Mar 20, 2014 10:44 am

This is a problem mostly due to the lack of investment knowledge of your wife. In the long run, no matter who you have as an investment company this puts her at the mercy of the predators in this industry. While you may be able to control it to some extent by changing investment companies you can't wall her off from contact with general society. Salesmen for these sorts of products come in all sorts of guises, friends, church group members, neighbors, you name it.

I'd highly suggest that you spend some time on education. Really that is both the only effective solution.

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damjam
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Re: Leaving Fidelity

Post by damjam » Thu Mar 20, 2014 10:50 am

Jack FFR1846 wrote:Is there some underlying reason why a Vanguard rep would not act the same as one from Fidelity? Serious question. Does anyone know if they are paid differently?

Vanguard reps are paid a salary - no commissions. How are Fidelity reps paid?

I have nothing against Fidelity or those who use it. I just think you need to be a little more savvy to make best use of Fidelity's offerings.

vested1
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Re: Leaving Fidelity

Post by vested1 » Thu Mar 20, 2014 11:15 am

Jack FFR1846 wrote:So I have to ask those at Vanguard. Do Vanguard reps never call with investment advice? I know my own experience with Fidelity isn't everyone's......but as I mentioned, they call when a new rep takes over. Nothing else.

Is there some underlying reason why a Vanguard rep would not act the same as one from Fidelity? Serious question. Does anyone know if they are paid differently?

I tend to start by distrusting an institution. Maybe that's why I don't get calls. Every new rep gets told that I self direct and want no interferance. Perhaps my wording scares them from ever calling again.


Fidelity pays a base wage to its employees, which from my understanding for an advisor such as I had is 32% of their total pay on average.

https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/representative-compensation.pdf (Sorry I don't have any trouble posting a url elsewhere but have never got it to work on this site.) :annoyed [I fixed the url, you were missing a leading bracket from [/url] --admin LadyGeek]

The rest of their pay is determined as "Variable", with incentives for customer retention and new sales, with basis points awarded for established benchmarks. The basis points stack up for various categories, especially for the PAS (Portfolio Advisory Service) employees and the FILI employees (life insurance).

On the other hand Vanguard employees are not commission based and receive a salary according to the representative I spoke with. A glance at Glassdoor shows that the employees at Vanguard aren't exactly killing it, salary wise. A Vanguard employee I spoke with mentioned that he could make a lot more at any another company (like Fidelity) but that he couldn't get over the clash in ethics it would take to base his decisions on anything other than customer interest. Of course Fidelity has much better ethics than most other investment firms who are more well know for their self-serving pressure tactics.

http://www.glassdoor.com/Salary/Vanguard-Salaries-E4084.htm (Sorry again) [Fixed again --admin LadyGeek]

Human nature comes into play here, which apparently drives some adverse behavior at firms that encourage sales rather than a fiduciary goal. Customer retention is highly rewarded at Fidelity but it would seem that part of that equation would be to serve your customer's best interest.

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Re: Leaving Fidelity

Post by Call_Me_Op » Thu Mar 20, 2014 11:27 am

damjam wrote:
Jack FFR1846 wrote:Is there some underlying reason why a Vanguard rep would not act the same as one from Fidelity? Serious question. Does anyone know if they are paid differently?

Vanguard reps are paid a salary - no commissions. How are Fidelity reps paid?

I have nothing against Fidelity or those who use it. I just think you need to be a little more savvy to make best use of Fidelity's offerings.


Well put - that's the crux of it. Fidelity is a very good option for those who want to diversify custodians. In general, Fidelity has an excellent website, great customer service, and good fund options. But they cater to both the Boglehead and to the active trader types. (Admittedly, I credit John Bogle and Vanguard for Fidelity offering a low-cost fund selection.) So one needs to be knowledgeable to make the most of what Fidelity offers - and to avoid the pitfalls.
Last edited by Call_Me_Op on Thu Mar 20, 2014 11:29 am, edited 1 time in total.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Leaving Fidelity

Post by Professor Emeritus » Thu Mar 20, 2014 11:29 am

The only reasons we use Fidelity is Vanguard's moronic attitude towards durable powers of attorney.
I manage my disabled wife's financial affairs but if something happens to me Vanguard refuses to recognize the State approved POA We gave to our daughters.
Even TSP has no problem with the POA.

DW would be a flagship customer in her own right if they would recognize state approved POAs They don't. Yes we have their vanguard pseudo fake limited POA but it does not do what the Statutory POA does. Fidelity had no problem with the Statutory POA

Mit der Dummheit kämpfen Götter selbst vergebens

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Ged
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Re: Leaving Fidelity

Post by Ged » Thu Mar 20, 2014 11:29 am

vested1 wrote:[url]http://www.glassdoor.com/Salary/Vanguard-Salaries-E4084.htm/url] (Sorry again)


You are missing the left bracket "[" on the closing url tag.

It should be "[/url]".

vested1
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Re: Leaving Fidelity

Post by vested1 » Thu Mar 20, 2014 12:20 pm

Ged wrote:
vested1 wrote:[url]http://www.glassdoor.com/Salary/Vanguard-Salaries-E4084.htm/url] (Sorry again)


You are missing the left bracket "[" on the closing url tag.

It should be "[/url]".

I noticed that and have found that my Apple wireless keyboard won't type certain symbols anymore. The plus sign, equal sign, and brackets are the affected symbols. The bracket is there when I use the url button, but when the url displays the bracket is missing and I can't add it back in. Gotta love it. Probably time for a new keyboard. Hope I didn't start a run on Apple stock here! :twisted:

Greatness
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Re: Leaving Fidelity

Post by Greatness » Thu Mar 20, 2014 1:25 pm

damjam wrote:
Greatness wrote:... All in all, I am sure the Bogle family is doing as well or better than then Johnson family. ...


Correct me if I am wrong, but it is my understanding that the Johnson family counts their wealth in the billions and the Bogles in the, at most, tens of millions. Big difference to me.


The Bogdaddy has a net worth of 100 million +. Good for him. He deserves it. However, when you are talking about that number, of the billions the Abbie has, it really doesn't matter. It's more than anyone can realistically spend in a lifetime. Especially when your approaching 85.

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Re: Leaving Fidelity

Post by placeholder » Thu Mar 20, 2014 2:30 pm

vested1 wrote:I noticed that and have found that my Apple wireless keyboard won't type certain symbols anymore.

I sent a report into the mods maybe they can fix it.

dbr
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Re: Leaving Fidelity

Post by dbr » Thu Mar 20, 2014 2:38 pm

How on earth are people ending up with these pesky reps? I don't have and have never had a "rep" at any fund company. Maybe somebody from Fidelity called once and we just said we weren't interested. Our accounts wherever they are have gotten along fine without. Anyway, if someone at a fund company suggests investing advice to you, just ignore it, and certainly don't ask for it.

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fandango
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Re: Leaving Fidelity

Post by fandango » Thu Mar 20, 2014 3:11 pm

I have accounts at both Vanguard and Fidelity.

I have not received solicitation calls from either firm.

However, when I call Fidelity and ask for some specific information, I experience some pressure to accept portfolio management services (at a cost, of course), and I always decline.
When I call Vanguard my "Account Executive" can never be reached directly and does not get back with me for several days.

So, I have some misgivings about both Fidelity and Vanguard. Unfortunately, I have yet to find anyone who has a reputation for being better (although I have heard some positive things about TIAA-CREFF).

I think that I just don't like having someone between me and my money! Guess that's a necessary evil in today's world.

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Re: Leaving Fidelity

Post by placeholder » Fri Mar 21, 2014 4:16 pm

With custodians that have a local presence I will usually get a call from someone there as a contact point but I never return the call and I've never had any pressure for management when calling customer service.

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Leif
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Re: Leaving Fidelity

Post by Leif » Fri Mar 21, 2014 6:53 pm

I had a bad rep at Vanguard. This is at a time when I had more money at Vanguard and I had a dedicated rep. I just asked for a new rep and they changed for me. No big deal. Later I took some money out so now I get whoever answers the phone first. I've had good luck with these reps. I also have a Fidelity account. I've had very good service from them.
Investors should diversify across many asset-classes so that whatever happens, we will not have all our investments in underperforming asset classes and thereby fail to meet our goals-Taylor Larimore

blevine
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Re: Leaving Fidelity

Post by blevine » Fri Mar 21, 2014 11:14 pm

You just have to be able to say no firmly and definitively.

I walked into a Citibank branch this week, to deposit a largish check.
Usually use iphone or ATM to scan checks, but large checks not taken by the iphone deposit,
so you have to bring to branch. There was no line at teller, decided to deposit
there instead of the ATM. Big mistake. "would you like to open a savings acct" NO
"would you like a home equity LOC" NO Last time I see a teller in person. ATM all the way.

mhlambert
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Re: Leaving Fidelity

Post by mhlambert » Fri Mar 21, 2014 11:27 pm

Move your money to where you can get what you want with the lowest fees. Most likely this will end up being Vanguard.

DualIncomeNoDebt
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Re: Leaving Fidelity

Post by DualIncomeNoDebt » Sat Mar 22, 2014 12:59 am

pbziegler wrote:because I though if I died my wife wouldn't know how to managed the money.


You should research prior posts concerning this topic. There are several concerning surviving spouse/partner and investments, and how to undertake a simple Vanguard allocation so that the survivor isn't confused or taken advantage of.

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jfn111
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Re: Leaving Fidelity

Post by jfn111 » Sat Mar 22, 2014 8:53 am

I have most of my investments at Fidelity. I receive a call from their PCG group about twice a year offering different services. I don't return the calls. It's nice to know they have help if needed but no one's put a gun to my head forcing me to talk to them.

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