Fidelity: Automate Investing with ETFs (M1 Finance?)

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batman2020
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Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by batman2020 » Thu Nov 28, 2019 9:18 am

I have all my accounts with Fidelity right now. Is there anyway to automate investing into ETFs? I like certain ETF's such as SLYV and DGS for factor tilting towards small cap value and have not found great alternatives in mutual funds.

I want to automate all of my investments so I am not making portfolio decisions each pay period. I have a tendency to second-guess my self, I am my own worst enemy. :D Right now I have 4 accounts with Fidelity that get funded 1-2x per month; 2 Roth IRA's, Brokeragelink, and HSA.

I have even thought about moving the Roth IRAs to M1 Finance where you can auto-invest into ETFs, rebalance automatically, etc. I wish Fidelity had this functionality for ETF's. Has anyone done this with M1?

How have you solved this problem of constant re-balancing between the accounts/making decisions each pay period?

AlohaJoe
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by AlohaJoe » Thu Nov 28, 2019 9:37 am

https://www.fidelity.com/managed-accoun ... o/overview

That is Fidelity's answer to your question.

You want it for free and they want to make money from it.

I expect that, just like ERs and trading costs, eventually brokers will offer it for free. But it may take years to get there. Zecco had free trades in 2006 and it took until 2019 for other brokerages to finally convert en mass. So maybe it'll take another decade or so?

nix4me
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by nix4me » Thu Nov 28, 2019 9:39 am

Can only do it mutual funds at Fidelity - when i look at "Automatic Investments" it only lists my mutual funds, not ETFs.

M1Finance is the only platform that allows it that i know of. M1 Finance has amazing features.

Both Fidelity and Vanguard do not. Not sure about Schwab or others.

snailderby
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by snailderby » Thu Nov 28, 2019 9:40 am

M1 Finance is a great platform.

Pros:
-- You can purchase fractional shares of ETFs.
-- You can automate your investing.
-- You can rebalance at the click of a button as often or as infrequently as you want.
-- No AUM fees.

Cons
-- Doesn't offer as many types of accounts as Fidelity (like HSAs, for example)
-- Charges fees to close an IRA or transfer it out.

Topic Author
batman2020
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by batman2020 » Thu Nov 28, 2019 9:48 am

AlohaJoe wrote:
Thu Nov 28, 2019 9:37 am
https://www.fidelity.com/managed-accoun ... o/overview

That is Fidelity's answer to your question.

You want it for free and they want to make money from it.

I expect that, just like ERs and trading costs, eventually brokers will offer it for free. But it may take years to get there. Zecco had free trades in 2006 and it took until 2019 for other brokerages to finally convert en mass. So maybe it'll take another decade or so?
0.35% monthly, yuck! I wonder if folks here have the same problem as me (the second-guessing) and opted for Fidelity Go? Can you use Fidelity Go for ETFs? I wonder if you could set it up to pay the fee out of your checking rather than out of your investment accounts.

snailderby
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by snailderby » Thu Nov 28, 2019 9:58 am

A couple things about Fidelity Go from Fidelity's website:
You may not buy and sell individual investments in your Fidelity Go® account. By enrolling in a managed account service like Fidelity Go® you turn the day-to-day management of your investments over to a team of investment professionals.
Your account will primarily hold a combination of Fidelity Flex® mutual funds. These funds generally hold domestic stocks, foreign stocks, bonds, or short-term investments. Fidelity Flex® mutual Funds are a line-up of Flex funds that have zero expense ratios, and include proprietary active and passive funds.
Last edited by snailderby on Fri Nov 29, 2019 12:23 pm, edited 1 time in total.

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whodidntante
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by whodidntante » Thu Nov 28, 2019 10:03 am

I prefer human control to robots. It's not much work to look at what you are short of and buy that. This is called market timing rebalancing by cash flow.

nix4me
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by nix4me » Thu Nov 28, 2019 11:42 am

I agree, it takes seconds to log into the Fidelity app and place a buy. I do it twice a month as I have direct deposit from my paycheck land in my Roth settlement fund every 2 weeks. I do it on my lunch break so I can see what the market is doing before buying ETFs since they trade instantly. If I buy mutual funds I wait until about 3:30 eastern to place the order to try to ensure the market doesn’t make a big move.

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batman2020
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by batman2020 » Sat Nov 30, 2019 7:58 am

snailderby wrote:
Thu Nov 28, 2019 9:58 am
A couple things about Fidelity Go from Fidelity's website:
You may not buy and sell individual investments in your Fidelity Go® account. By enrolling in a managed account service like Fidelity Go® you turn the day-to-day management of your investments over to a team of investment professionals.
Your account will primarily hold a combination of Fidelity Flex® mutual funds. These funds generally hold domestic stocks, foreign stocks, bonds, or short-term investments. Fidelity Flex® mutual Funds are a line-up of Flex funds that have zero expense ratios, and include proprietary active and passive funds.
Oh, sounds like I can't use Fidelity Go to buy individual ETF's then.

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Wiggums
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by Wiggums » Sat Nov 30, 2019 8:17 am

nix4me wrote:
Thu Nov 28, 2019 9:39 am
Can only do it mutual funds at Fidelity - when i look at "Automatic Investments" it only lists my mutual funds, not ETFs.

M1Finance is the only platform that allows it that i know of. M1 Finance has amazing features.

Both Fidelity and Vanguard do not. Not sure about Schwab or others.
The only options at Fidelity are:
Use mutual funds
Use Fidelity service at .035

I think the issue with ETFs is that you don’t know the cost. So until they allow partial shares at Fidelity, you cannot schedule purchases of ETFs

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batman2020
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by batman2020 » Sat Nov 30, 2019 9:43 am

Would you switch to mutual funds to automate everything? I thought about it but the exposure to small cap value is just not as good with any mutual funds I can find as SLYV, DLS, and DGS.

yogesh
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by yogesh » Sat Nov 30, 2019 9:59 am

batman2020 wrote:
Sat Nov 30, 2019 9:43 am
Would you switch to mutual funds to automate everything? I thought about it but the exposure to small cap value is just not as good with any mutual funds I can find as SLYV, DLS, and DGS.
Fidelity Small cap value index?
https://www.fidelity.com/mutual-funds/f ... ndex-funds
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040

stan1
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by stan1 » Sat Nov 30, 2019 10:29 am

Wait a few months and see what Schwab offers. One of the key enablers of automated investing like M1 is doing is trading in fractional shares (dollars) not whole shares. Trading in dollars is what people like about Vanguard mutual fund accounts. Schwab has announced they will start offering fractional share trading. If they add it to their no-cost Intelligent Portfolio offering it may be very similar to M1 although might be limited in the set of ETFs supported.

I think what will happen eventually is that all the large brokerages have a platform like M1 where you can purchase in dollars and reallocate at no cost. You'll only pay fees if you want or need to talk to a person like with Schwab's Intelligent Portfolio Premium service which has a monthly fee that is not AUM based.

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batman2020
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by batman2020 » Sun Dec 01, 2019 8:41 am

yogesh wrote:
Sat Nov 30, 2019 9:59 am
batman2020 wrote:
Sat Nov 30, 2019 9:43 am
Would you switch to mutual funds to automate everything? I thought about it but the exposure to small cap value is just not as good with any mutual funds I can find as SLYV, DLS, and DGS.
Fidelity Small cap value index?
https://www.fidelity.com/mutual-funds/f ... ndex-funds
I look at this fund but it does not follow the same index as SLYV. SLYV follows the S&P SmallCap 600 Value Index. FISVX follows the Russell 2000 Value index. There's lots of evidence the S&P 600 consistently outperforms the Russell 2000. Also the S&P 600 has a committee to assess quality (quality filter) each year on the companies they include in the index, not just blindly look at 'X' number of companies as the Russell 2000 does.

This would solve my problem however of automating things.

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batman2020
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by batman2020 » Sun Dec 01, 2019 8:52 am

stan1 wrote:
Sat Nov 30, 2019 10:29 am
Wait a few months and see what Schwab offers. One of the key enablers of automated investing like M1 is doing is trading in fractional shares (dollars) not whole shares. Trading in dollars is what people like about Vanguard mutual fund accounts. Schwab has announced they will start offering fractional share trading. If they add it to their no-cost Intelligent Portfolio offering it may be very similar to M1 although might be limited in the set of ETFs supported.

I think what will happen eventually is that all the large brokerages have a platform like M1 where you can purchase in dollars and reallocate at no cost. You'll only pay fees if you want or need to talk to a person like with Schwab's Intelligent Portfolio Premium service which has a monthly fee that is not AUM based.
Yes, this. Fidelity should move to allow fractional shares and automate the purchase of ETFs similar to M1 to stay competitive. I'm seriously considering moving my Roth IRAs to M1 to automate things.

stan1
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by stan1 » Sun Dec 01, 2019 1:53 pm

batman2020 wrote:
Sun Dec 01, 2019 8:52 am
stan1 wrote:
Sat Nov 30, 2019 10:29 am
Wait a few months and see what Schwab offers. One of the key enablers of automated investing like M1 is doing is trading in fractional shares (dollars) not whole shares. Trading in dollars is what people like about Vanguard mutual fund accounts. Schwab has announced they will start offering fractional share trading. If they add it to their no-cost Intelligent Portfolio offering it may be very similar to M1 although might be limited in the set of ETFs supported.

I think what will happen eventually is that all the large brokerages have a platform like M1 where you can purchase in dollars and reallocate at no cost. You'll only pay fees if you want or need to talk to a person like with Schwab's Intelligent Portfolio Premium service which has a monthly fee that is not AUM based.
Yes, this. Fidelity should move to allow fractional shares and automate the purchase of ETFs similar to M1 to stay competitive. I'm seriously considering moving my Roth IRAs to M1 to automate things.
With Schwab since they are the first large brokerage to head this way it will be interesting to see if fractional share purchases apply to:
1) Only their intelligent portfolio robovisor offerings (limited to 53 ETFs of their choosing)
2) Standard accounts outside the robovisor using most ETFs and stocks
3) All accounts and all ETFs including leveraged (where M1 is at today for they types of accounts they offer)

Then:
Will the user interface offer the choice of trading in shares and dollars? There are times and reasons to do both especially in a taxable account.

Will fractional shares apply to retail accounts only or will it also be used for Schwab managed portfolio, 401K plans they administer, and 3rd party advisor accounts? I'm guessing they will apply it to 401K accounts and move them into intelligent portfolio robovisor model unless there are regulatory hurdles.

Seems like they could then offer a marketplace for asset allocations (free, subscription at a flat rate per month, and if they want to really monetize it they could do AUM based as well).

dru808
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by dru808 » Sun Dec 01, 2019 2:33 pm

M1 finance is an incredibly easy to use broker. The dynamic rebalance and fractional shares make it easy peesy. I recommend it.

dacalo
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by dacalo » Sun Dec 01, 2019 4:07 pm

M1 Finance just had a fiasco; they withdrew money twice for some customers which happened to me. I am going to move my money to Fidelity, don't want to deal with this kind of "mistakes."

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CyclingDuo
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by CyclingDuo » Sun Dec 01, 2019 10:43 pm

batman2020 wrote:
Thu Nov 28, 2019 9:18 am
I have all my accounts with Fidelity right now. Is there anyway to automate investing into ETFs? I like certain ETF's such as SLYV and DGS for factor tilting towards small cap value and have not found great alternatives in mutual funds.

I want to automate all of my investments so I am not making portfolio decisions each pay period. I have a tendency to second-guess my self, I am my own worst enemy. :D Right now I have 4 accounts with Fidelity that get funded 1-2x per month; 2 Roth IRA's, Brokeragelink, and HSA.

I have even thought about moving the Roth IRAs to M1 Finance where you can auto-invest into ETFs, rebalance automatically, etc. I wish Fidelity had this functionality for ETF's. Has anyone done this with M1?

How have you solved this problem of constant re-balancing between the accounts/making decisions each pay period?
M1 Finance for auto-investing into ETF's (and fractional shares).

No fees and easy to set up with your bank account to have it all automated. No need to second guess yourself - just set up an account with your custom made pie(s) and have at it. We use the SLYV as one of our slices in the Merriman Ultimate Buy & Hold portfolio pie at M1. Each subsequent automatic investment funds the slices of the pie that have dipped below their targeted % allocation first, before funding the other slices making M1 on autopilot for rebalancing. It's about as hands off as you can get. Might be a good way to take care of your second guessing and being your own worst enemy.

CyclingDuo
"Everywhere is within walking distance if you have the time." ~ Steven Wright

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batman2020
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by batman2020 » Mon Dec 02, 2019 12:14 pm

dacalo wrote:
Sun Dec 01, 2019 4:07 pm
M1 Finance just had a fiasco; they withdrew money twice for some customers which happened to me. I am going to move my money to Fidelity, don't want to deal with this kind of "mistakes."
Curious what happened? Did they take steps to resolve this?

MotoTrojan
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Re: Fidelity: Automate Investing with ETFs (M1 Finance?)

Post by MotoTrojan » Mon Dec 02, 2019 12:21 pm

batman2020 wrote:
Mon Dec 02, 2019 12:14 pm
dacalo wrote:
Sun Dec 01, 2019 4:07 pm
M1 Finance just had a fiasco; they withdrew money twice for some customers which happened to me. I am going to move my money to Fidelity, don't want to deal with this kind of "mistakes."
Curious what happened? Did they take steps to resolve this?
I am not familiar with this situation but in general there customer service has been quite good (very responsive) with even the CEO responding to some issues on public blogs. That doesn't mean mistakes can't happen and they are certainly more likely to happen at M1 than a major broker.

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