Thinking about making the switch from Vanguard to Fidelity? Perhaps you've heard about Fidelity's robust platform, wide array of investment options, or their highly-regarded customer service. Whatever your reasons, transferring your assets doesn't have to be a headache. This comprehensive guide will walk you through the entire process, step-by-step, to ensure a smooth transition.
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Before we dive into the nitty-gritty, let me ask you: What's driving your decision to move your money? Are you looking for a broader selection of ETFs and mutual funds, a more intuitive user interface, or perhaps specific tools and research capabilities that Fidelity offers? Understanding your primary motivation can help you navigate the process with a clear purpose and ensure you're making the most of your new brokerage. Now, let's get down to business!
How to Move Money from Vanguard to Fidelity: A Step-by-Step Guide
Transferring your investments from one brokerage to another is typically done through a process called an Automated Customer Account Transfer Service (ACATS). This system allows you to move your investments "in kind," meaning your holdings (stocks, ETFs, mutual funds, etc.) are transferred directly without being sold and re-purchased, which is crucial for avoiding potential tax implications.
Step 1: Laying the Groundwork - Research and Preparation
Before you initiate any transfer, a little homework can save you a lot of hassle.
1.1. Understand Your Vanguard Holdings
- Identify Your Account Types: Are you transferring a Roth IRA, Traditional IRA, taxable brokerage account, or a combination? The transfer process can vary slightly depending on the account type.
- List Your Investments: Make a detailed list of all your holdings at Vanguard. This includes specific mutual funds, ETFs, stocks, bonds, and any cash balances.
- Check for Proprietary Funds: Vanguard is known for its proprietary mutual funds. While many Vanguard ETFs can be held at Fidelity, some Vanguard mutual funds might incur transaction fees if held at Fidelity or may need to be exchanged for Fidelity equivalents or Vanguard ETFs before transferring. It's vital to check if Fidelity supports holding your specific Vanguard mutual funds without transaction fees. If not, you'll need to consider converting them to their ETF equivalents (if available) or selling them and re-investing in Fidelity's offerings before the transfer.
- Gather Account Information: You'll need your Vanguard account number(s) and a recent account statement (dated within the last 90 days) for reference during the Fidelity transfer application.
1.2. Open a Corresponding Fidelity Account (If You Don't Have One)
You'll need a Fidelity account of the same type as your Vanguard account. For example, if you're transferring a Vanguard Roth IRA, you'll need a Roth IRA at Fidelity. If you don't have one, you can easily open it online through Fidelity's website. They often guide you through opening the correct account type as part of the transfer initiation process.
1.3. Review Fidelity's Offerings and Fees
- Investment Options: Familiarize yourself with Fidelity's mutual funds, ETFs, and other investment products. If you plan to move away from Vanguard's specific funds, this is a good time to research alternatives at Fidelity.
- Fee Structures: While both Vanguard and Fidelity are known for low costs, it's wise to review their respective fee schedules. Pay attention to:
- Account Closure Fees: Vanguard may charge a $100 processing fee for each account closure and full transfer out. Fidelity, on the other hand, typically does not charge an account closure fee. Sometimes, Fidelity might reimburse transfer-out fees charged by your previous brokerage, so it's worth asking their customer service.
- Mutual Fund Transaction Fees: As mentioned, some Vanguard mutual funds might incur transaction fees at Fidelity if they're not part of Fidelity's no-transaction-fee program.
- Other Potential Fees: Look out for wire transfer fees, physical certificate deposit fees, or any other specific fees that might apply to your situation.
Step 2: Initiating the Transfer at Fidelity (The "Pull" Method)
The most common and generally recommended way to transfer assets is to initiate the process from the receiving firm's side – in this case, Fidelity. This is often referred to as a "pull" transfer.
2.1. Log In to Your Fidelity Account and Start the Transfer
- Go to Fidelity's website (Fidelity.com) and log in to your account.
- Navigate to the "Transfers" or "Move Money" section. Look for an option like "Transfer an account to Fidelity" or "Start a Transfer of Assets (TOA)."
- Follow the prompts to begin the online transfer request.
2.2. Provide Vanguard Account Information
- You'll be asked to provide your Vanguard account number and the exact account type (e.g., Vanguard Brokerage Account, Roth IRA, Traditional IRA).
- You might be prompted to upload a recent Vanguard statement. Having this handy will speed up the process.
- Ensure the name and address on your Vanguard account exactly match the name and address on your Fidelity account. Discrepancies can cause significant delays or even rejection of the transfer. If there are differences (e.g., a maiden name vs. married name, or a missing middle initial), you may need to provide additional documentation like a marriage certificate or a "One-and-the-Same" letter.
2.3. Choose What to Transfer
- Full Transfer: If you want to move all your assets and close your Vanguard account, select the "full transfer" option. This is generally simpler.
- Partial Transfer: If you only want to move specific holdings or a portion of your cash, choose "partial transfer." You'll then specify which assets you wish to transfer. Be meticulous here to avoid errors.
2.4. Review and Authorize
- Carefully review all the information you've entered. Accuracy is paramount to prevent delays.
- Read and agree to the terms and conditions.
- Provide your electronic signature (if required).
Step 3: What Happens Behind the Scenes (The ACATS Process)
Once you've submitted your request to Fidelity, they take over the heavy lifting.
3.1. Fidelity Contacts Vanguard
- Fidelity will submit an ACATS request to Vanguard, asking them to release your assets.
- Vanguard will review the request and verify the information.
3.2. Asset "Ring-fencing" or Liquidation
- If your assets are being transferred "in kind" (which is the goal for most ACATS transfers), Vanguard will "ring-fence" your investments. This means they are temporarily unavailable for trading at Vanguard but remain invested.
- If you have Vanguard mutual funds that aren't supported by Fidelity without transaction fees, or if you explicitly requested to sell them, Vanguard will liquidate those holdings into cash before transferring the cash to Fidelity. This is why pre-conversion to ETFs or cash is often recommended for Vanguard mutual funds if you want to avoid holding them at Fidelity with fees or forced liquidation during the transfer.
3.3. Transfer Execution
- Vanguard sends the assets (either in kind or as cash) to Fidelity through the ACATS system.
- Fidelity receives the assets and deposits them into your designated Fidelity account.
Step 4: Monitoring Your Transfer and Post-Transfer Actions
Patience is key, but staying informed is also important.
4.1. Track Your Transfer
- Fidelity usually provides a way to track the status of your transfer online. You'll typically see an estimated completion date and progress updates.
- Most ACATS transfers take 3-5 business days to complete, though some requests, especially if paperwork is involved or there are discrepancies, may take longer (sometimes up to 2-3 weeks).
- During the transfer period, it's generally not recommended to trade in the account being transferred, as this can complicate or delay the process.
4.2. Verify Your Holdings at Fidelity
- Once the transfer is complete, log in to your Fidelity account.
- Crucially, verify that all your assets have arrived correctly and that the cost basis information for your transferred investments is accurate. This is important for future tax reporting.
- If you notice any discrepancies or missing holdings, contact Fidelity customer service immediately.
4.3. Close Your Vanguard Account (If Desired)
- If you initiated a full transfer, your Vanguard account should eventually close automatically. However, it's a good idea to confirm its closure with Vanguard after a week or two to ensure there are no lingering issues or small cash balances left behind.
Pro-Tip for Vanguard Mutual Funds: Convert to ETFs First!
Many investors holding Vanguard mutual funds choose to convert them to their ETF equivalents before initiating a transfer to Fidelity. Here's why:
- Avoid Transaction Fees: Vanguard ETFs can generally be traded commission-free at Fidelity, just like Fidelity's own ETFs. This avoids potential transaction fees that might be levied on certain Vanguard mutual funds if held at Fidelity.
- Maintain Investment Exposure: Converting to an ETF allows you to maintain your investment exposure to the underlying index or asset class without selling and repurchasing, thus avoiding capital gains taxes (for taxable accounts) and minimizing time out of the market.
- Simplified Transfer: It simplifies the transfer process as ETFs are typically easier to transfer "in kind" between brokerages.
To do this, you would contact Vanguard before initiating the Fidelity transfer and request a conversion of your mutual fund shares to their corresponding ETF shares. Once converted, you can then proceed with the ACATS transfer to Fidelity.
10 Related FAQ Questions (Starting with 'How to')
Here are some common questions you might have about transferring your investments:
How to check the status of my transfer?
You can typically check the status of your transfer by logging into your Fidelity account and navigating to the "Transfers" or "Move Money" section. There should be a "Track a Transfer" or similar option that provides updates.
How to avoid transfer fees?
Vanguard may charge a $100 account closure and full transfer-out fee. While Fidelity generally doesn't charge for receiving transfers, they may reimburse transfer fees charged by your previous firm. It's worth contacting Fidelity customer service to inquire about this possibility. Converting Vanguard mutual funds to ETFs before transferring can also help avoid transaction fees at Fidelity.
How to transfer only specific investments?
When initiating the transfer on Fidelity's website, you will typically have the option to choose between a "full transfer" or a "partial transfer." Select "partial transfer" and then specify the exact investments (e.g., number of shares of a particular stock or ETF) you wish to move.
How to handle retirement account transfers (IRAs, Roth IRAs)?
Transfers for retirement accounts like IRAs and Roth IRAs are also done via the ACATS system and are generally non-taxable events as long as you transfer to a like account type (e.g., Roth IRA to Roth IRA). Fidelity will guide you through matching the account types during the transfer process.
How to ensure my cost basis information is transferred correctly?
When transferring "in kind," your cost basis information should automatically transfer with your holdings. However, it's crucial to verify this information once the assets arrive at Fidelity. If you notice any discrepancies, contact Fidelity's customer service with your Vanguard statements to get it corrected.
How to transfer if my name/address doesn't match?
If there are discrepancies in your name or address between your Vanguard and Fidelity accounts, the transfer may be delayed or rejected. You will likely need to provide additional documentation, such as a marriage certificate, divorce decree, or a "One-and-the-Same" letter, to prove your identity and ownership of both accounts. Contact Fidelity's transfer specialist team for guidance.
How to transfer cash balances?
Any cash held in your Vanguard account can be transferred along with your investments as part of a full or partial ACATS transfer. If you only want to transfer cash, you might also consider an Electronic Funds Transfer (EFT) or wire transfer, though these are typically initiated from your bank and have different processing times and potential fees.
How to transfer if I have Vanguard mutual funds?
If you hold Vanguard mutual funds, consider converting them to their ETF equivalents before initiating the transfer to Fidelity. This can help you avoid potential transaction fees on those mutual funds at Fidelity and maintain your investment exposure. If a direct ETF equivalent isn't available or you prefer not to convert, you may need to sell the mutual funds at Vanguard and transfer the cash, then repurchase at Fidelity. Always check Fidelity's policy on specific Vanguard mutual funds.
How long does it typically take to transfer?
Most ACATS transfers from Vanguard to Fidelity take 3-5 business days to complete once initiated. However, if there are any issues with paperwork, mismatched information, or complex holdings, it could take longer, sometimes up to a few weeks.
How to get help if my transfer is stuck or delayed?
If your transfer is taking longer than expected or you encounter issues, the first point of contact should be Fidelity's customer service. Since they initiated the "pull" transfer, they are best equipped to investigate the delay with Vanguard and provide updates or request additional information. Be sure to have your account numbers and any relevant transfer confirmation details handy.
