Opinions on Consolidating Finances
 

I have some of our retirement 401k and 403b rollovers in Fidelity, Vanguard and Oppenheimer. To make things easier, I would like to consolidate and put all of our funds into one company.

We were told that even in the unlikely event that one of these firms went belly up we would not be hurt since we are not invested in these companies but in the underlying stocks, bonds and funds.

But I’d like other opinions, from a risk point of view, is there any reason why I should not do this?

Signed:

Gun Shy ever since “Bernie Madoff with the money”

I have accounts with Fidelity, T. Rowe and Vanguard...and prefer Vanguard overall.

While some people don't believe anything Consumer Reports reviews/publishes, I have personally found them to be very beneficial.

For those who are interested, here is a recent (Oct 2018) survey by CR...of various Investment Companies.


Consumer Reports Investment Company Buying Guide

It surely will makes things much easier for your heirs, beneficiaries, trustees, proxies, etc. and the executer of your estate. I can not think of any reason not to do this and six more as to why it seems like a good idea. It makes a lot of sense to remain diversified from the standpoint of financial investments, but not necessarily the organization you direct to administer them, particularly the firms you named which are about as rock solid as they come.

You may have to be a member of CR to see the entire list, so for those who aren't members...here's a pic of their top ratings.

SIPC (if the broker is a member), protects up to $500k per customer......all customer accounts per broker.

I split mine among three. I just sleep better at night if all my eggs are not in one basket. Having seen some major financial institutions fold over the years I do not believe that any account is 100% secure.

From the stand point of being properly diversified it would be difficult using 3 independent brokers unless they were talking to each other (highly unlikely), so I would vote for a single common broker. Also, pay attention if you decide to go with a single broker, as there may be opportunities to limit taxes or change investments to save future taxes.
Hope this helps, good luck with your project.

I have mutual funds with both Vanguard and Fidelity. I prefer Vanguard, but my Fidelity funds would create a huge tax liability if were to sell them and move the funds to Vanguard. So, I just keep them there. But, I would have no problem having all of my investments with Vanguard, and would prefer it that way, if I could avoid the taxes.

We're also split among three. Wife's retirement at one. My retirement at another then our personal portfolio at a third. Wasn't really by design just happened that way.

We just got finished with the process. We put everything into Vanguard because it seems they have the lowest fees of any of the big players. I think we moved from like 6 companies to just Vanguard. Patience is important, because none of it moves fast. The nice thing is you can always get someone on the phone, and they stay open after 5 pm. I still have some in the wind that hasn't completely cleared through all the regs. Hopefully we can get through this tax season, and things will simplify. If you want any contact information for VG. let me know.

Thank you for your response but I'm a little confused. Say I have positions in several individual stocks and a couple of mutual funds, that are in my Fidelity or Vanguard accounts, where/when does insurance become an issue?

Thanks.

Thank you for your response. Can you tell me why you prefer Vanguard over Fidelity and T. Rowe Price? Just wondering what your tipping point was.

Hi, thanks for your response as well. You are another who prefers Vanguard over Fidelity. Can you tell me what your reason is for that preference?

Typically, Vanguard has the lowest expense ratio in the industry for almost all of their mutual funds. Fidelity is a good company, but they have never been able to compete with Vanguard on the cost of their mutual funds, and other services.

Lower fees/loads.

Vanguard

[QUOTE=BK001;1607395]I have some of our retirement 401k and 403b rollovers in Fidelity, Vanguard and Oppenheimer. To make things easier, I would like to consolidate and put all of our funds into one company.

We were told that even in the unlikely event that one of these firms went belly up we would not be hurt since we are not invested in these companies but in the underlying stocks, bonds and funds.

But I’d like other opinions, from a risk point of view, is there any reason why I should not do this?

Signed:

If i were you i would roll the 401k and 403b into an ira account through a major brokerage firm. That way you can manage your own investments. You are currently paying management fees to the 401 and 403 plans by consolidating to an ira accout you would only pay one management fee.

[QUOTE=Fredman;1607538]In my opinion, you should definitely transfer your 401K and 403B money into an IRA. If you transfer it to Vanguard, you would not pay any management fee at all, except for the expense ratio of their funds. When I retired from the Federal Government, one of the first things I did was to transfer my retirement account into an IRA. I didn't want Congress to have any access to that money.

You might want to check into doing direct rollovers from those accounts into IRAs — like Fredman and retiredguy123 said here.

I prefer IRAs to leaving the money in the 401(k) or 403(b) because IRAs give more direct control.

If you do this, be sure you do it absolutely perfectly so that you do not trigger any tax consequences.

Regarding your original question:
I am wondering if you decide to consolidate if you will be able to keep all of your current funds. Individual stocks would roll over directly. But I do not know if mutual funds titled specifically to the firm could roll over directly to a different firm. For example, could Fidelity Contrafund roll over to Vanguard as is? (I do not know the answer to that but it might be no. Maybe somebody here knows.)

I don't think you can roll over funds or even stocks from a 401K to an IRA. You would need to cash them out and transfer the money. But, since it is tax deferred money, there would be no taxes as long as you did a direct transfer. Once the money is in your IRA. you can then purchase comparable investments within the IRA. If using Vanguard, they will be glad to help you to make the direct transfer. But, it is well worth the effort to get your money into an IRA where you have total control.

I would use several brokers. If someone compromises your account I think it would be better that you did not have all your eggs in one basket.

Thank you all for such good advice. I guess I wasn't clear but the 403B and the 401K were rollovers into IRAs when we left our respective employers. To transfer from one broker to another we have two choices: Sell and transfer into cash or do what is called "investments in kind". That was not the issue but appreciate the comments.

That sounds like a valid argument for leaving things the way they are. Thank you and all the other responders.

fidelity actually has no fee index funds now. It won't cost anything to make an appt. with Fidelity. The nice thing about them is they have an office in LSL. I think they may give you money for transferring to them. I have most of my accounts with them and it is easier at tax time

Take it all an put it on NOTHING but RED! One Spin, Exciting. You could always stay in our basement if it doesn't work out. :1rotfl:

Hope you got some good ideas here, great people, great advice.

LOL - Best offer I've had all day! :mademyday:

:1rotfl: There's no basement at the Alamo :1rotfl: sorry :1rotfl: not

You are so sharp FW and absolutely right -- The Big "N" is selling snow in a NY winter so if we follow his investment strategy and Black comes out we are to be "Homeless in The Villages".

:1rotfl:

Thanks for nuttin' N.

Re: Vanguard, t.rowe and fidelity
 

I too have atts at Vanguard, T. Rowe and Fidelity. At big plus for Fidelity is the fact that they have a location in Lake Sumter so if you want to talk to a HUMAN drop something off or pick something up it is there. If, you wish to put your holdings at T. Rowe, Vanguard without selling them you can have Fidelity hold them for you. Only caution I am aware or is that Fidelity will not
honor the reduced management fees associated with Vanguard
Admiral shares. Also, if in a company sponsored IRA, 401K etc you many find that as my wife did that there are company plans where you pay lower management fees than the same exact fund traded as a different code.
RE: Vanguard or T. Rowe
Service is mon-fri 9-5:00. Fidelity-you will find someone to answer the phone anytime including weekends.