How much to keep at Vanguard?

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Tracker968
Posts: 86
Joined: Tue Feb 23, 2016 9:32 pm

How much to keep at Vanguard?

Post by Tracker968 » Wed Mar 25, 2020 10:49 pm

I have >$500k at Vanguard in my IRA. I have read that accounts are SIPC insured up to $500k. But on the Vanguard website it says that they have additional SIPC insurance up to $4.5MM. I think Fidelity has the same thing.
Is there any reason to move part of it out to another brokerage firm?

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FiveK
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Re: How much to keep at Vanguard?

Post by FiveK » Wed Mar 25, 2020 11:11 pm


Jim180
Posts: 408
Joined: Wed Jun 26, 2013 9:47 pm

Re: How much to keep at Vanguard?

Post by Jim180 » Wed Mar 25, 2020 11:18 pm

This is on their site. Don't know if this is what you saw or not:

https://investor.vanguard.com/investing ... protection

I have > $500K and I'm not worried at all. You're good.

rossington
Posts: 555
Joined: Fri Jun 07, 2019 2:00 am
Location: Florida

Re: How much to keep at Vanguard?

Post by rossington » Thu Mar 26, 2020 3:47 am

Tracker968 wrote:
Wed Mar 25, 2020 10:49 pm
I have >$500k at Vanguard in my IRA. I have read that accounts are SIPC insured up to $500k. But on the Vanguard website it says that they have additional SIPC insurance up to $4.5MM. I think Fidelity has the same thing.
Is there any reason to move part of it out to another brokerage firm?
No!! (First of all SIPC protection applies only to brokerage account securities.)

Please read this for reassurance:
https://www.bogleheads.org/wiki/Vanguard_safety
"Success is going from failure to failure without loss of enthusiasm." Winston Churchill.

wolf359
Posts: 2123
Joined: Sun Mar 15, 2015 8:47 am

Re: How much to keep at Vanguard?

Post by wolf359 » Thu Mar 26, 2020 7:29 am

Tracker968 wrote:
Wed Mar 25, 2020 10:49 pm
I have >$500k at Vanguard in my IRA. I have read that accounts are SIPC insured up to $500k. But on the Vanguard website it says that they have additional SIPC insurance up to $4.5MM. I think Fidelity has the same thing.
Is there any reason to move part of it out to another brokerage firm?
Not for reasons of insurance.

I keep money at both Fidelity and Vanguard, but for different reasons:

Vanguard:
- Trust - Costs are low across the board. No predatory products. No pressure to buy things. Shareholders are owners. Index funds in taxable accounts are taxed less (due to ETF patent.)
- Bulk of my funds are already here. Costs too much to switch.
- Cheapest to buy Vanguard funds from Vanguard. I prefer mutual funds to ETFs for easier automation.

Fidelity:
- Single firm risk - Having an account at a second brokerage allows access to some money should I temporarily lose access to the primary brokerage. There are a number of reasons this disruption could happen: internet problems, database problems, freeze of assets due to mysterious workings of US bank fraud system, account problems, attempted fraud (account freeze while this is resolved), etc.
- Trust - Costs are low for the funds that I use.
- Industry domination - They already manage so many company 401-k programs that I already have an account with them.
- Fidelity Rewards Credit Card - When I spend money, I can automatically add 2% cash back to my positions painlessly.
- Buckets - I put a sinking fund for vacations and other fun spending at Fidelity to keep it separate from the retirement accounts. We can watch that fun account and stay motivated to stick to the savings plan. If the money is mixed, there is a temptation to spend from retirement.

nordsteve
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Joined: Sun Oct 05, 2008 9:23 am

Re: How much to keep at Vanguard?

Post by nordsteve » Thu Mar 26, 2020 7:32 am

Like wolf359, I keep accounts at both.

One useful property of a Fidelity account is that they have physical offices you can visit if necessary.

3funder
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Joined: Sun Oct 15, 2017 9:35 pm

Re: How much to keep at Vanguard?

Post by 3funder » Thu Mar 26, 2020 7:45 am

There's no right answer to this one. Do what makes you most comfortable.

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Wiggums
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Joined: Thu Jan 31, 2019 8:02 am

Re: How much to keep at Vanguard?

Post by Wiggums » Thu Mar 26, 2020 7:48 am

I keep money at both. Mainly because my 401k moved, but why not leverage the best of both worlds.

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