In one of my earlier posts I wrote about firing our financial advisor and transferring assets to Vanguard. We initiated this process a month ago and I’m still waiting on the transfer to complete. Here’s a few tips I can give you that might help explain the process and give you an idea of what to expect.
Notify your advisor ahead of time
I took the initiative and called my advisor before I filled out the transfer forms with Vanguard. I did this mostly out of respect and I felt it was the adult thing to do. What I didn’t know that I needed to do in that call was request all assets to be liquidated. This would have sped up the transferring process considerably.
Instead, I got a letter from Vanguard saying the transfer couldn’t be completed because some of the assets held in our current IRA could not be purchased through Vanguard. The process essentially came to a halt at that point.
So I called back and asked that all assets be liquidated. I then assumed that the transfer would complete automatically. After two weeks of nothing happening on either end I made some phone calls where I learned that the transfer had to be initiated again. This again takes another 3-5 business days.
The other reason this is valuable advice is because it will save you on sales charges. We owned some American Funds which can be held in a Vanguard account. Those funds transferred with the initial request, but we were then charged a $20 sales charge to sell each fund from within the Vanguard IRA. That could have been avoided by liquidating all assets in the current IRA prior to transfer.
There will be fees
Fees, upon fees, upon fees. I already mentioned the sales charge for selling non Vanguard funds in a Vanguard IRA. Our current firm (I won’t name names, but it rhymes with Schmedward Schmones) charges fees to close the account. Each account. $95 to be exact. I’m not sure what the industry standard is, but I would anticipate paying something.
I’ve heard of people being able to get their fees waived, but this was in regards to liquidating an estate so I don’t think I would have the same luck. I didn’t even attempt. I was pretty frustrated with the hang-ups on transferring the IRAs that I didn’t want to spend any more time on the phone.
Pick your funds ahead of time
After establishing my desired asset allocation, I spent several hours researching fund options. I did this because I wanted to not feel rushed by having a pile of cash sitting in the account doing nothing. I wanted to be able put it to work the second I was able to, minimizing time out of the market.
There were several times where I decided to add one fund or drop another when I was researching and I didn’t want to second guess myself right before I pushed the “buy” button. Have a plan for which funds you will purchase and stick to it.
What are you waiting for?
There you go! Learn from my hiccups and get yourself going. The process is really quite simple. I just had a few minor bumps that have dragged the timeline out longer than I would have liked. Vanguard has excellent customer service and the few times I’ve had to call, I’ve experienced almost no hold time and very friendly staff.