Partially inspired by Five Cent Nickel’s article on Reconsidering Our Asset Allocation, partly by my recent read of Burton G. Malkiel’s A Random Walk Down Wall Street, and partly by an urge to simplify, I have recently been consolidating a number of retirement accounts from a number of brokerages to one. I have chosen Vanguard as the host for the bulk of our assets, primarily because it offers the index fund options that I want with very low fees.
The process for consolidating is pretty easy. I logged into our existing Vanguard accounts and filled out 5 questionnaire pages that detailed what I wanted to move, from where, and into what fund(s). At the end of the process, I was prompted to download and print out a PDF to sign and return to Vanguard. This process had to be completed for each brokerage account not yet at Vanguard.
I called Fidelity to make sure that there would be no problem with Vanguard getting the money for the transfer. I was informed that in order for this to go smoothly, I would have to move all of our assets into cash positions. And by the way, I was told, I should do this today since the market is up… advice that smelled of market timing to me and was promptly ignored… Instead, I opted to wait until I knew Vanguard would have received our paperwork and started to execute the transaction.
Within a few days I saw that one of the Fidelity accounts was empty and the Vanguard had increased my almost the same value. Almost? you ask? Yes, Fidelity took a $50 “cash out” fee out of the money that was transferred. After researching this point for 30 minutes or so, I was unable to find this fee stated, explicitly, anywhere on Fidelity’s website. It does say that the law allows them to charge one, but they don’t say what the charge will be.
So I guess this is just Fidelity’s way of saying, “Don’t let the door hit you on the way out.” And this is yet another reason that I can’t, in good faith, recommend Fidelity to any potential investors who might seek my advice on the matter, even if it is the home town favorite in my neck of the woods.