Sunday, June 24, 2018

Avoiding IRA Transfer Fee: Fidelity Rollover Roth IRA to Vanguard

I decided to consolidate my Roth IRAs at Vanguard instead of having them at various financial institutions. Fidelity has a $50 full transfer/close fee and $0 partial transfer fee for Roth IRAs. Here are my failed steps to try and avoid this fee:

1) Move all funds except $1 into the money market settlement fund.
2) Initiate transfer on Vanguard side, specifying partial transfer.
3) Vanguard says there is a problem, Fidelity claims this is a full transfer
4) Fidelity says this is a full transfer because the remaining non-cash funds are in a fund with a minimum that is not met, so that position must be liquidated as well.
5) I give up and agree to the full transfer. Get charged $50.

After agreeing to the full transfer and thus fee, I realized I could have tried purchasing an ETF (so there is no fund minimum). Fidelity has many iShares ETFs that trade for free. SLVP has a share price of $10. So perhaps one can buy 1 share of SLVP and move the rest out without any fee! Please report back if this works.

The other option is to perform an indirect rollover. Anyone know if this successfully avoids the fee at Fidelity? I've read this does not work at Wells Fargo as WF requires keeping minimum of the fee ($95) in the account.

Edit: This is now all moot. Fidelity no longer charges a closeout fee. Thanks for making this change in August 2018, the month after I closed out my IRA.

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