New DIY Investor
Good morning! I am looking to move our accounts from our current financial advisor to self -managed accounts with Vanguard. I do have a small brokerage account with Vanguard. Currently, I have an IRA and 2 Roth IRA's with our advisor. I am new to FI, and have been reading and listening to the podcasts quite a bit. Am I correct in thinking that I can move the traditonal and Roth IRA's to Vanguard into the same type of accounts with no tax implications? I have so much to learn, but I need to move these accounts soon. Our advisor is implementing new (increased) fees, and I do not want to continue with them.
I would also welcome any general advice on investment self-management. Is it beneficial to meet with a fiduciary at the beginning, or do I just need to spend my time doing more research on the topic? Thank you in advance for any tips! I have already learned so much from this community.
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Mike Madrigal
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6.5d
- I just helped my father in law with this, so the first thing you want to do is open up the similar or identical accounts at Vanguard or your preferred brokerage for each account you are transferring. You want the account open first because your money needs something to transfer in to. For example if you are transferring a Roth IRA open a new Roth IRA to transfer it into. Once the account is open you can call your existing brokerage to start the transfer process or ask the brokerage you just opened your new account with for help. You want to make sure you do a direct transfer or rollover. This prevents your equities from being sold and triggering a taxable event. Hope this helps!
I also moved a bunch of money into vanguard and I had no tax implications. I cannot give details on your situation but for me I didn’t have tax implications.
I called vanguard and they helped me set up the transfer and answered questions I had. You could do that and ask them.
Maybe it’s worth it to meet with the fiduciary to plan. Overall in glad I moved to VG for lower fees
Moving accounts from the current custodian to a new custodian is called an external transfer. Here is information from Vanguard on how do do an external transfer.
Since you're transferring retirements accounts, there is no tax consequence for the move. If you were transferring a taxable account, there may be tax consequences, for example if the advisor has you invested in proprietary funds that cannot be moved and must be cashed out. That isn't a concern with a retirement account. You can sell funds inside a retirement account without tax consequences. Only when money leaves a retirement account (a distribution) is that money taxed.
I assume you're in the accumulation stage. In this stage, there isn't anything fancy you need to be doing. Hold low-cost broad market index funds, all equities if you don't mind market volatility. If you share what funds you currently hold, what your tolerance is for risk and how many years before you retire, the community can make suggestions.
may even want some more diversification and add VT somewhere.
Others already answered the first part well. For the second part of what to be in and learning…. Read Simple Path to Wealth. That’s really all you need if you’re in the accumulation stage. VTI or VOO or any broad based low cost index fund. Simple, set it and forget it.
if within 5 yrs of retirement and 80% at FI number then listen to Risk parity radio for retirement portfolio options.
That’s all you need.
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We just did this, but with Fidelity. We opened the similar accounts, submitted the request to transfer via Fidelity and everything went well from there We were in some proprietary funds in the old accounts (that I was happy to get out of!) so we had to authorize a few things on the old advisor's end, but Fidelity kept us informed along the way.
If your old advisor charges an account closing or transfer fee, be sure to see if Vanguard will credit you for it. It was a quick form on Fidelity's end and they gave us back a few hundred, which was helpful!
All in all, it was not a bad process at all. I'm so happy to have full control of our funds and get out from under our last remaining AUM fees. Good luck!