How much is too much in a Fidelity or VG account?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
throwaway37837812
Posts: 2
Joined: Sun Apr 15, 2018 6:59 pm

How much is too much in a Fidelity or VG account?

Post by throwaway37837812 » Sun Apr 15, 2018 7:03 pm

Hi esteemed bogleheads -

After saving one paycheck at a time for a long time, I have a nice windfall coming my way and expect it will push my Fidelity balance to approximately $4.5-$6m now (and hopefully more with growth!).

Is this too much to leave in a Fidelity account? What is their average account balance?

I imagine sales people may be annoying, but I can handle that - I truly enjoy investing my own money and will mostly be in a mix of index funds an treasurys.

Just wondering if it's too risky or there is something I'm not thinking about?

Regards

Silk McCue
Posts: 698
Joined: Thu Feb 25, 2016 7:11 pm

Re: How much is too much in a Fidelity or VG account?

Post by Silk McCue » Sun Apr 15, 2018 7:26 pm

Please check out this link on our site for managiing windfalls. It is an excellent place to start. Be careful and be wise.

https://www.bogleheads.org/wiki/Managing_a_windfall

Cheers

throwaway37837812
Posts: 2
Joined: Sun Apr 15, 2018 6:59 pm

Re: How much is too much in a Fidelity or VG account?

Post by throwaway37837812 » Sun Apr 15, 2018 7:32 pm

Silk McCue wrote:
Sun Apr 15, 2018 7:26 pm
Please check out this link on our site for managiing windfalls. It is an excellent place to start. Be careful and be wise.

https://www.bogleheads.org/wiki/Managing_a_windfall

Cheers
Thank you - have read this and had it bookmarked for many years!

Jack FFR1846
Posts: 6648
Joined: Tue Dec 31, 2013 7:05 am

Re: How much is too much in a Fidelity or VG account?

Post by Jack FFR1846 » Sun Apr 15, 2018 7:33 pm

Seeing classes of funds in Fidelity with minimums of $100M give me faith that a few million are probably not a problem.
Bogle: Smart Beta is stupid

User avatar
JamesSFO
Posts: 3014
Joined: Thu Apr 26, 2012 10:16 pm

Re: How much is too much in a Fidelity or VG account?

Post by JamesSFO » Sun Apr 15, 2018 7:34 pm

Unlike savings accounts with FDIC insurance there isn't the same type of guarantee in brokerage accounts (SIPC coverage isn't really quite the same, it protects against "loss" of the securities, e.g. a VG or Fido employee somehow manages to remove securities from your account).

I personally have nearly 90% with VG but do keep 10% with Fido so that if something catastrophic happened with Vanguard for a while (e.g. 1 week long denial of service) I could get money from the other.

Grt2bOutdoors
Posts: 17978
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: How much is too much in a Fidelity or VG account?

Post by Grt2bOutdoors » Sun Apr 15, 2018 7:41 pm

throwaway37837812 wrote:
Sun Apr 15, 2018 7:03 pm
Hi esteemed bogleheads -

After saving one paycheck at a time for a long time, I have a nice windfall coming my way and expect it will push my Fidelity balance to approximately $4.5-$6m now (and hopefully more with growth!).

Is this too much to leave in a Fidelity account? What is their average account balance?

I imagine sales people may be annoying, but I can handle that - I truly enjoy investing my own money and will mostly be in a mix of index funds an treasurys.

Just wondering if it's too risky or there is something I'm not thinking about?

Regards
Your funds are held in custody-segregated from Fidelity or Vanguard’s own monies and corporate obligations. Seeing that large institutional investors with billions leave money invested at these firms, the risk you need to be concerned with relates to your own accounts asset allocation.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

MikeG62
Posts: 700
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: How much is too much in a Fidelity or VG account?

Post by MikeG62 » Sun Apr 15, 2018 7:54 pm

throwaway37837812 wrote:
Sun Apr 15, 2018 7:03 pm
Hi esteemed bogleheads -

After saving one paycheck at a time for a long time, I have a nice windfall coming my way and expect it will push my Fidelity balance to approximately $4.5-$6m now (and hopefully more with growth!).

Is this too much to leave in a Fidelity account? What is their average account balance?

Regards
I truly would not worry about this. You are not investing “in” Fidelity, but “through” Fidelity (with Fidelity simply being the vehicle (broker) through which you are acquiring the individual index funds and treasuries). This is not like having money in the bank in excess of FDIC insurance limits and the bank goes under or investing in a single stock with the company subsequently going out of business. If something happens to Fidelity, you still own the individual index funds or treasuries. While you may not have immediate access to the assets, eventually you would.

User avatar
sperry8
Posts: 1518
Joined: Sat Mar 29, 2008 9:25 pm
Location: Miami FL

Re: How much is too much in a Fidelity or VG account?

Post by sperry8 » Sun Apr 15, 2018 8:01 pm

Although I agree and appreciate the answers herein, I too keep ~15% of my assets with Fidelity as a "risk diversification tool". I simply transferred them in-kind and they just sit there. It costs me $0. In the future should something occur that delays my Vanguard access, I will appreciate having both accounts. I see no downside to keeping both open (other than 2 incoming tax forms annually that I must collect and hand to my accountant).
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

Nekrotok
Posts: 111
Joined: Wed Aug 10, 2016 3:44 pm

Re: How much is too much in a Fidelity or VG account?

Post by Nekrotok » Sun Apr 15, 2018 8:58 pm

Jack FFR1846 wrote:
Sun Apr 15, 2018 7:33 pm
Seeing classes of funds in Fidelity with minimums of $100M give me faith that a few million are probably not a problem.
Yes, I'm hoping for the day when I can upgrade to fsktx and vitsx! OP, you got nothing to worry about.

User avatar
Sandtrap
Posts: 4257
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳

Re: How much is too much in a Fidelity or VG account?

Post by Sandtrap » Sun Apr 15, 2018 10:29 pm

At 5 mil + in Vanguard you will be eligible for "Flagship Select" status.
https://investor.vanguard.com/wealth-management/
But, as a "Boglehead", you will likely not need their services anyway.
However, there are reduced or zero fees for a number of items.

As Vanguard is presently at $ 5.1 TRILLION in Assets Under Management (just shy of a "Gazillion").
There's not much to worry about. $5-6 million is far less than a drop in that bucket.

If it makes you more comfortable, keep your Tier 1 in Fidelity and the rest in Vanguard.

aloha
j :D

mhalley
Posts: 5601
Joined: Tue Nov 20, 2007 6:02 am

Re: How much is too much in a Fidelity or VG account?

Post by mhalley » Mon Apr 16, 2018 11:29 am

I like having my money in multiple brokerages in case of the possibility of account takeover. Most likely if something did happen, the money would eventually be recovered, but I sleep better at night knowing that one hack won’t put ALL of my money at risk.

CurlyDave
Posts: 421
Joined: Thu Jul 28, 2016 11:37 am

Re: How much is too much in a Fidelity or VG account?

Post by CurlyDave » Mon Apr 16, 2018 11:40 am

mhalley wrote:
Mon Apr 16, 2018 11:29 am
I like having my money in multiple brokerages in case of the possibility of account takeover. Most likely if something did happen, the money would eventually be recovered, but I sleep better at night knowing that one hack won’t put ALL of my money at risk.
While I agree that multiple brokerages is best, a kind of a half-way measure is multiple accounts at the same brokerage. They add up to enough that customer service pays attention when I call, which would probably not be the case if split between two brokerage houses, and a simple hack will not put all of my assets out of reach.

If I had as much as the OP, I would put enough to get top tier customer service in a separate brokerage and just let it sit in case of emergency or a massive computer failure.

User avatar
AAA
Posts: 926
Joined: Sat Jan 12, 2008 8:56 am

Re: How much is too much in a Fidelity or VG account?

Post by AAA » Fri Apr 20, 2018 9:28 am

MikeG62 wrote:
Sun Apr 15, 2018 7:54 pm
I truly would not worry about this. You are not investing “in” Fidelity, but “through” Fidelity (with Fidelity simply being the vehicle (broker) through which you are acquiring the individual index funds and treasuries). This is not like having money in the bank in excess of FDIC insurance limits and the bank goes under or investing in a single stock with the company subsequently going out of business. If something happens to Fidelity, you still own the individual index funds or treasuries. While you may not have immediate access to the assets, eventually you would.
I'm currently thinking about brokerage diversification so this thread is very relevant. As to your comment, what if that "something" that happens to Fidelity is that for whatever reason - employee fraud, computer virus, software bug, etc - they no longer have a record of which funds I own through them?

goingup
Posts: 2989
Joined: Tue Jan 26, 2010 1:02 pm

Re: How much is too much in a Fidelity or VG account?

Post by goingup » Fri Apr 20, 2018 10:00 am

One broker and one bank for us. There's no "too much" at places like Vanguard, Fidelity, Schwab. Consolidation and simplicity are more valued than redundancy by me.

MikeG62
Posts: 700
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: How much is too much in a Fidelity or VG account?

Post by MikeG62 » Fri Apr 20, 2018 10:31 am

AAA wrote:
Fri Apr 20, 2018 9:28 am
MikeG62 wrote:
Sun Apr 15, 2018 7:54 pm
I truly would not worry about this. You are not investing “in” Fidelity, but “through” Fidelity (with Fidelity simply being the vehicle (broker) through which you are acquiring the individual index funds and treasuries). This is not like having money in the bank in excess of FDIC insurance limits and the bank goes under or investing in a single stock with the company subsequently going out of business. If something happens to Fidelity, you still own the individual index funds or treasuries. While you may not have immediate access to the assets, eventually you would.
I'm currently thinking about brokerage diversification so this thread is very relevant. As to your comment, what if that "something" that happens to Fidelity is that for whatever reason - employee fraud, computer virus, software bug, etc - they no longer have a record of which funds I own through them?
Ok, I'll bite.

Companies like Fidelity have very robust disaster recovery plans in place. Id' expect this to include among other things multiple backup's as well as offsite location(s) that can be brought up relatively quickly to operate in place of their traditional IT center(s).

Failing all that, how about going back to your most recent monthly statement(s)?

User avatar
AAA
Posts: 926
Joined: Sat Jan 12, 2008 8:56 am

Re: How much is too much in a Fidelity or VG account?

Post by AAA » Fri Apr 20, 2018 10:49 am

MikeG62 wrote:
Fri Apr 20, 2018 10:31 am

Ok, I'll bite.

Companies like Fidelity have very robust disaster recovery plans in place. Id' expect this to include among other things multiple backup's as well as offsite location(s) that can be brought up relatively quickly to operate in place of their traditional IT center(s).

Failing all that, how about going back to your most recent monthly statement(s)?
I'll bite too - since a monthly statement can be forged, do you think a company like Fidelity would reimburse someone based on a pdf file that they submit. And even if such a procedure were in place, it seems it would take a very long time before everything was back to normal at the firm.

Of course all these scenarios are very unlikely, but as one's assets grow and they are all at one firm, the consequence of a problem also grows.

I check monthly statements online but don't save them. Maybe I should. :wink:

RAchip
Posts: 239
Joined: Sat May 07, 2016 7:31 pm

Re: How much is too much in a Fidelity or VG account?

Post by RAchip » Fri Apr 20, 2018 10:55 am

Vanguard sends you a text when there is any transaction on your account. If there were to be any unauthorized transaction you get a txt and can call and stop it.

I wouldn't hesitate to hold any amount of money at Vanguard.

User avatar
bertilak
Posts: 5837
Joined: Tue Aug 02, 2011 5:23 pm
Location: East of the Pecos, West of the Mississippi

Re: How much is too much in a Fidelity or VG account?

Post by bertilak » Fri Apr 20, 2018 11:05 am

AAA wrote:
Fri Apr 20, 2018 10:49 am
MikeG62 wrote:
Fri Apr 20, 2018 10:31 am
I check monthly statements online but don't save them. Maybe I should. :wink:
I download and save the PDFs every month. Yes, it is a bit of a pain. The pain comes because Vanguard downloads all get the same file name so I have to rename each file. This involves coming up with and sticking to a naming convention as well as being careful not to misname anything.

The PDFs are backed up in three ways. The backups are all automated and therefore pain-free:
  1. CrashPlan backups to a local hard drive on my router.
  2. CrashPlan cloud.
  3. OneDrive cloud.
May neither drought nor rain nor blizzard disturb the joy juice in your gizzard. -- Squire Omar Barker, the Cowboy Poet

MikeG62
Posts: 700
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: How much is too much in a Fidelity or VG account?

Post by MikeG62 » Fri Apr 20, 2018 12:09 pm

AAA wrote:
Fri Apr 20, 2018 10:49 am
MikeG62 wrote:
Fri Apr 20, 2018 10:31 am

Ok, I'll bite.

Companies like Fidelity have very robust disaster recovery plans in place. Id' expect this to include among other things multiple backup's as well as offsite location(s) that can be brought up relatively quickly to operate in place of their traditional IT center(s).

Failing all that, how about going back to your most recent monthly statement(s)?
I'll bite too - since a monthly statement can be forged, do you think a company like Fidelity would reimburse someone based on a pdf file that they submit. And even if such a procedure were in place, it seems it would take a very long time before everything was back to normal at the firm.

Of course all these scenarios are very unlikely, but as one's assets grow and they are all at one firm, the consequence of a problem also grows.

I check monthly statements online but don't save them. Maybe I should. :wink:

Yes you should save copies of your monthly statements. I do so electronically (with a backup updated weekly).

Somehow if the scenario you paint comes to pass (Fidelity's systems go down in a way that they cannot be brought back up and "all" disaster recovery, redundant and backup systems fail as well), proving the statements you have downloaded are legitimate may well be the least of your worries.

Some risks are worth worrying about and other are not. This one falls in the latter camp for me.

User avatar
JoMoney
Posts: 4781
Joined: Tue Jul 23, 2013 5:31 am

Re: How much is too much in a Fidelity or VG account?

Post by JoMoney » Fri Apr 20, 2018 12:14 pm

Mark Twain in Pudd'nhead Wilson's Calendar wrote:Behold, the fool saith, "Put not all thine eggs in the one basket"-- which is but a manner of saying, "Scatter your money and your attention"; but the wise man saith, "Put all your eggs in the one basket and--_watch that basket!_"
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

Post Reply