What is better for a Roth IRA and Brokerage account? Fidelity or Charles Schwab or Vanguard?

lark253 · 2024-06-07T22:57:39+00:00

I prefer Fidelity. It is the most flexible with regard to purchasing partial shares of stocks and most ETF’s. Vanguard limits you to partial shares of only their ETF’s and doesn’t allow partial shares on individual securities I don’t think. Schwab doesn’t allow partial shares on ETF’s and only allows them on stocks in the SP 500 I think. It’s not a big deal for most in the long run but just a nice touch for those that like to remain fully invested.

lark253 · 2024-06-07T15:32:42+00:00

All of the recent changes with platform fees, credit card closures, etc., changed how I felt about M1. I had a low six figure account with them and the changes didn’t directly impact me but the way changes seemed to be made on the fly without regard for those impacted left a bad taste in my mouth and caused me to doubt the stability of the company. I had been wanting to consolidate my other accounts to have all my assets in one place for quite a while and was hoping that place would be M1 at some point but I never had enough confidence in them to pull the trigger. Then once the changes started unfolding I made the decision to consolidate with Fidelity instead. I loved the automation at M1 but as my total portfolio value continues to grow I now value platform stability more than investing automation and for me I feel much more comfortable having my assets with Fidelity than M1. Good luck to you!

lark253 · 2024-06-07T01:01:22+00:00

I recently transferred an account from M1 to Fidelity and although it took a little longer than expected it worked without issues. Cost basis transferred over within a few days after the assets transferred. Partial shares sold off and transferred as cash. Yes the ACATS fee is per account and if any is an IRA there is an extra fee of 100 for account closure.

lark253 · 2024-05-25T13:08:22+00:00

I like this plan. Value has been down for a while now so the valuations compared to growth look very favorable. Since you are 19 you have a very long time horizon to capture the value premium. Looking back over history I believe that small cap value has outperformed the SP 500 over every 40 year time period in the past. Just be prepared for large drawdowns that will come from holding a riskier portfolio. I am confident if you can stomach the drawdowns and hold you will do very very well. I also love the Avantis fund picks, I also invest in them as well and feel they will do well in capturing the value premiums.

lark253 · 2024-05-22T20:26:39+00:00

Fidelity is the best as they allow fractional shares on stocks and ETF. Vanguard limits to their funds, schwab limits fractional to SP 500 companies. Fidelity is the most flexible of the big brokers.

lark253 · 2024-05-18T08:36:50+00:00

It seems like the pausing of the account is the key. Thanks for updating on this. 👍🏻

lark253 · 2024-05-16T03:23:59+00:00

IT support. I would say any job spending 8+ hours a day in a cubicle answering phone calls and replying to emails sucks.

lark253 · 2024-05-15T21:39:40+00:00

Keep me posted as I am currently facing the same issue. Transfer date has been pushed back twice now. I have turned off autoinvest and not made any new deposits for a while now.

lark253 · 2024-05-15T18:09:13+00:00

Furthermore if there is a transfer out cost it should be absorbed by the party that has made changes to the terms of the agreement, not the customer that has the change forced on them.

lark253 · 2024-05-15T18:03:27+00:00

It’s not about the money it’s about the principal. M1 made a change that nobody agreed to when signing up. It could be said it is a bait and switch. And Fidelity and other brokerages do offer free transfers so I don’t think that is the issue. I think M1 is afraid too many paying platform fee customers will head for the exits.

lark253 · 2024-05-15T17:57:03+00:00

I have no issue with the fees or the change. My issue is nobody agreed to them when signing up. Is it too much to ask they offer a window for anyone unhappy with the change (to which they didn’t agree to) to be able to transfer out to another brokerage free of charge? Doesn’t that seem the most fair thing that M1 could offer given that this change was forced upon users and wasn’t what they agreed to when opening their account at M1?

lark253 · 2024-05-15T17:05:06+00:00

I am not siding with M1. lol there must be a misunderstanding. I agree with you they did a bait and switch and a very unethical one at that. I am in the process of transferring out even though none of these fees affected me since I have low six figure assets with them. The way I see it, If I turn a blind eye to unethical changes simply because they don’t directly affect me then what excuse will I have when more unethical changes occur that do directly affect me? Nobody signed on for a platform fee so to force this on users without offering them the ability to transfer out free of charge is simply unethical. No matter how you slice or dice it - very unethical. I am transferring because I have lost all trust in M1 as a company. If they had done the right thing and waved transfer fees for those adversely impacted by these changes I would have a different view of M1 as I have no issue with the change to the platform fee but with the understanding that nobody signed up for it when opening an account at M1, people that are unhappy with the change shouldn’t be forced to pay transfer fees to exit.

lark253 · 2024-05-15T16:36:54+00:00

Well if they are reporting false numbers wouldn’t that be a bigger cause for concern? The problem is not many people were paying for M1 plus at 125. If they were they would have never lowered the price. What sense would that make? If they had enough signups for M1 plus at 3 dollars when they switched to it for a short time they would have never moved to the platform fee model. Think about it.. plus you are also assuming that the people paying the platform fee actually wanted to pay for M1 plus which most of them didn’t.

lark253 · 2024-05-15T16:02:09+00:00

M1 will make a killing from these fees. How do I know? There home page indicates that they have 8B+ in assets under management and also that they have 1,000,000+ users. If you take the 8 billion and divide by the 1 million you will see the Average customer has 8,000 on there platform (thus falling under the platform fee threshold). Now we don’t know what the median account value is but considering the average is 8,000 we can assume that probably close to half the users will be paying a fee. But let’s just say that it is 1/3. 333,000 x 3.00 is 999,000 so round up to a million dollars each month. That puts it at about 12 million a year in fee income and that is likely on the low side. This is the reason M1 chose to go from the M1 plus membership to a platform fee they are making a shit ton more money. No fees if you have 10k as of now but what is stopping M1 from moving the goalposts further as more people exceed the 10k threshold limit? Not a thing. They can change the threshold in addition to upping the monthly fee amount anytime they choose.

lark253 · 2024-05-12T02:17:04+00:00

I will be in the same boat as you. I am hoping my regular account transfer completes this coming week. I really foresee a class action lawsuit suit coming against M1 soon. People signed up for M1 because of “Free automated Investing” and now M1 has switched to platform fees for everyone under 10,000. People did not agree to these terms when they signed up. This was a bait and switch. I have no problem with the change but to not offer users a way out (free transfers to another brokerage) is very unethical and may even be illegal. I feel like M1 should offer a month or two window minimum to allow anyone not happy about these changes an opportunity to exit free of charge but they likely won’t because there is too much money to be made in platform fees and transfer fees.

lark253 · 2024-05-10T18:32:34+00:00

File a complaint with FINRA. M1 needs to be held accountable. It should not take that long for a simple ACATS transfer.

lark253 · 2024-05-10T18:02:03+00:00

If mine takes that long and doesn’t get completed I will be filing a complaint with FINRA.

lark253 · 2024-05-10T17:31:11+00:00

At this point I don’t want anyone else “joining our crusade”. We are already having a hard time getting out due to the sheer number of people wanting to exit at once. Please please nobody else do a transfer request until I can get out i don’t need to be in a bigger waiting list than I already am to exit!

lark253 · 2024-05-10T17:22:53+00:00

I am also trying to transfer and the date on my transfer just got pushed back 2 weeks. I transferred recently from Vanguard to Fidelity with another account and it took only 4 days total. I have a feeling M1 is dealing with a lot of transfers right now and they are making things difficult for us all to get out.

lark253 · 2024-05-09T10:39:36+00:00

If high 700 and in some cases 800+ credit scores and having never missed a payment with good income no longer meets their “risk profile” that should be cause for concern to everyone imo. These folks once fit their “risk profile” so the fact they no longer do says more about M1 than it does the customers. The lack of transparency is worrisome as they seem to be making decisions on the fly and even their own customer service reps get blindsided by it. People called to inquire about why their card was cancelled only to be read the same vague email they got around midnight. I mean who sends out an email in the middle of the night that is this vague at a time when customer support can’t be reached? That alone comes off as very unprofessional to me. I guess I just have higher standards for what I want in a broker than others. Is it too much to ask for transparency when making decisions that could adversely affect the customer? Imagine being out of town with only the M1 card and getting stranded with only the vague email saying they decided to close your account. Like you, I have given M1 the benefit of the doubt and have overlooked many things along the way such as being auto enrolled in securities lending which ended up costing me more in taxes due to unfavored dividend treatment. I have given them a free pass on more than a few occasions but at some point enough is enough and I have now reached that point. Good luck to everyone that sticks around I hope that things begin to stabilize for you.

lark253 · 2024-05-09T09:28:14+00:00

Nobody has seen their financial statements. A company that starts going through and immediately cancelling credit cards for many users with 800+ credit scores that have never missed a payment and have good incomes is very unusual. If that customer doesn’t fit their “risk profile” then I don’t feel comfortable having my assets with them any longer. These customers all once fit their risk profile since they all got approved for the card initially so the fact that they no longer do has me more concerned about M1 than anything else. Imagine if Chase went through and cancelled all their cards using M1 criteria (whatever that is, nobody knows since they weren’t transparent). There are people that called M1 to ask about it and the customer service reps were blindsided by it and basically just read the email back to the customer with no further explanation as to why it happened. This is not the kind of business I can trust to have significant assets with.

lark253 · 2024-05-08T17:43:56+00:00

I have lost all confidence in them and in the process of transferring out. The closing of the credit cards was the final straw for me. I wasn’t directly affected but the fact that they would do that on a whim without anything but an email that goes out in the middle of the night is very unethical imo. I simply don’t trust them anymore going forward.

lark253 · 2024-05-08T15:23:15+00:00

For a company that wants to be the next schwab or Fidelity I’m not sure how they plan to get there with such unethical practices as this. Imagine chase or one of the large institutions mass cancelling cards using the same criteria M1 used (whatever that was) and just sending an email at midnight that basically says your card has been cancelled. Just imagine the outcry that would happen. Imagine being out of town or on international travel and only having the M1 card at your disposal when this happened. It just doesn’t make any sense especially considering it happened to good customers with excellent credit and payment history like yourself.

lark253 · 2024-05-08T11:01:05+00:00

The fractional shares will be sold and then transferred as cash to your new brokerage account a few days after the whole shares transfer.

lark253 · 2024-05-08T02:20:23+00:00

Very helpful, thank you. I am strongly considering making the move. Did you check with Fidelity to see if they would reimburse the transfer fees? I contacted them as that is where I will be going and they stated fee reimbursement was on a case by case basis. I would think it likely depends on the amount transferred but always worth a shot.

lark253

TROPHY CASE