Transfer IRA Account to Vanguard

Well, after a long delay, I finally called Vanguard this morning to check out the possibility of transferring my Roth IRA assets currently at Scottrade to Vanguard. I currently have a total of five funds in my portfolio and four of them are Vanguard funds: VTSMX, VWELX, VGTSX, and VIPSX. The only exception is BRSIX, which I owned since 2003. With Scottrade, after they recently started to charge fees for some popular funds that are in the transaction-fee fund category, I have to pay $2 for each pre-scheduled transaction. The fee is much higher if I don’t use the systematic purchasing plan (for more details about Scottrade, check out my Scottrade review post). The reason for making the switch is quite obvious: I already have four Vanguard funds that I want to buy and by investing directly with Vanguard, I can save that $8 a month I am currently paying for Scottrade.

I didn’t expect any problem to move those Vanguard funds to Vanguard, so my concern was on BRSIX. Before I made the call, I quickly browsed Vanguard website, but didn’t find the information I wanted, such as how much I have to pay when buying non-Vanguard funds through a retirement or brokerage account. So once I got connected to a Vanguard CSR the other day, I went straightly to the question: How much fees I have to pay to purchase this fund through Vanguard.

Bad news: The fees Vanguard charges for every transaction of this fund is $35! That’s a lot, almost at a level that I consider to be ridiculous to me for buy a mutual fund.

So I guess it doesn’t make any sense to transfer my entire account to Vanguard due to the high transaction fees Vanguard charges for non-Vanguard funds. The good news is I am able to transfer partial assets to Vanguard, meaning all the Vanguard funds I currently own in my IRA account, not the entire account. Before I can find a better place to hold BRSIX, I think it will remain with Scottrade. For the other four Vanguard funds, moving them to Vanguard can eliminate the 2% fee I am paying (I am buying $100 every month).

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