Can I Transfer Money from Vanguard to Fidelity? Absolutely! Here’s How.

Yes, you absolutely can transfer money from Vanguard to Fidelity. It’s a common move investors make for various reasons, such as consolidating accounts, accessing different investment options, or taking advantage of Fidelity’s platform features. The process is generally straightforward, but understanding the nuances can save you time and potential headaches.

Understanding the Transfer Process: A Smooth Transition

Think of transferring your investments as moving houses. You need to pack everything up properly and ensure it arrives safely at its new destination. In the financial world, this involves initiating a transfer request, specifying the assets you want to move, and coordinating between Vanguard and Fidelity. There are two primary methods for transferring:

• Account Transfer (ACATS): The Automated Customer Account Transfer Service (ACATS) is the most common and efficient method for transferring securities like stocks, bonds, mutual funds, and ETFs. It automates the process and typically takes 3-5 business days.
• Check Request: This method involves liquidating your assets at Vanguard and having a check issued to you (or directly to Fidelity). It’s generally slower than ACATS and can trigger taxable events if the account isn’t tax-advantaged.

Before initiating any transfer, it’s crucial to understand the implications for your specific situation.

Key Considerations Before You Start

While transferring assets is generally simple, keep these points in mind:

• Tax Implications: Moving assets in taxable (non-retirement) accounts can trigger capital gains taxes if you sell investments at a profit before transferring. Consider an in-kind transfer, which moves the assets without selling them. Retirement accounts like IRAs and 401(k)s generally don’t have immediate tax consequences when transferred directly between institutions.
• Fees: Both Vanguard and Fidelity generally don’t charge fees to initiate or receive account transfers. However, always double-check their current fee schedules to avoid surprises. Some niche investments might carry transfer fees.
• Investment Compatibility: Not all investments are transferable “in-kind.” Fidelity might not offer the exact same mutual funds or ETFs as Vanguard. You might need to liquidate certain assets at Vanguard and repurchase similar investments at Fidelity. This could trigger taxable events in taxable accounts.
• Account Alignment: Ensure the account registration (name, address, tax ID) on both Vanguard and Fidelity accounts matches exactly. Discrepancies can delay or even prevent the transfer.

Step-by-Step Guide to Transferring Your Assets

The process might vary slightly depending on the account types and the specific assets being transferred. Here’s a general outline:

1. Open a Fidelity Account: If you don’t already have one, open a Fidelity account of the same type as your Vanguard account (e.g., a taxable brokerage account at Vanguard should be transferred to a taxable brokerage account at Fidelity).
2. Gather Your Vanguard Account Information: You’ll need your Vanguard account number(s), the type of account(s) (e.g., Roth IRA, taxable brokerage), and a recent account statement.
3. Initiate the Transfer at Fidelity: Log in to your Fidelity account and navigate to the “Transfer” or “Move Money” section. Select the option to transfer from another firm.
4. Provide Vanguard Account Details: Enter your Vanguard account information, including the account number, account type, and the assets you wish to transfer.
5. Choose Transfer Method: Select either an ACATS transfer for most securities or indicate if you need to liquidate assets and receive a check. An ACATS transfer is almost always preferable.
6. Review and Submit: Carefully review all the information you’ve entered before submitting the transfer request.
7. Track the Transfer: Fidelity will provide updates on the progress of the transfer. You can typically track it online or by contacting Fidelity customer service.
8. Verify the Transfer: Once the transfer is complete, carefully verify that all assets have been transferred correctly to your Fidelity account.

Troubleshooting Common Transfer Issues

Sometimes, things don’t go exactly as planned. Here are some common issues and how to address them:

• Transfer Delays: If the transfer is taking longer than expected (more than 5-7 business days for ACATS), contact Fidelity customer service to inquire about the status. There might be outstanding information required or a problem with the paperwork.
• Rejected Transfer: Transfers can be rejected if the account information doesn’t match, if there are restrictions on the account at Vanguard, or if the assets are not transferable. Fidelity will typically provide a reason for the rejection, allowing you to correct the issue and resubmit the request.
• Partial Transfer: Sometimes, not all assets transfer successfully. This can happen if certain assets are ineligible for transfer or if there were errors in the transfer request. Contact Fidelity to determine the cause and resolve the issue.

Frequently Asked Questions (FAQs)

Here are some common questions about transferring money from Vanguard to Fidelity:

1. What types of accounts can I transfer?

You can transfer various account types, including taxable brokerage accounts, Traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs, and 401(k)s (under certain conditions). The key is to transfer to a corresponding account type at Fidelity. For example, a Roth IRA at Vanguard must be transferred to a Roth IRA at Fidelity.

2. How long does the transfer process usually take?

An ACATS transfer typically takes 3-5 business days. Liquidating assets and receiving a check can take longer, potentially 1-2 weeks or more.

3. Will I be charged any fees for transferring my account?

Generally, neither Vanguard nor Fidelity charges fees for standard account transfers. However, it’s always best to confirm their current fee schedules. Certain specialized assets or transactions might incur fees.

4. What is an “in-kind” transfer?

An in-kind transfer means transferring your existing assets (stocks, bonds, mutual funds, ETFs) without selling them. This avoids triggering capital gains taxes in taxable accounts. It’s the preferred method for transferring assets in taxable accounts.

5. What happens if I have fractional shares in my Vanguard account?

Fractional shares, where you own less than a whole share of a stock or ETF, can sometimes be problematic during transfers. Fidelity may not support fractional shares of all securities. Vanguard may have to liquidate those shares, and the cash will be transferred to Fidelity.

6. Can I transfer my mutual funds “in-kind” even if Fidelity doesn’t offer them?

It depends. Some mutual funds are proprietary to Vanguard and cannot be held directly at Fidelity. In these cases, you’ll need to liquidate those funds at Vanguard and repurchase similar investments at Fidelity. Fidelity offers a wide range of similar, if not identical, mutual funds.

7. What if my account names or addresses don’t match between Vanguard and Fidelity?

Account registration (name, address, tax ID) must match exactly on both accounts. Any discrepancies can cause delays or rejection of the transfer. Update your information at either Vanguard or Fidelity before initiating the transfer.

8. Can I transfer assets from a trust account or custodial account?

Yes, you can transfer assets from trust accounts or custodial accounts. However, the paperwork and requirements might be more complex. You’ll likely need to provide additional documentation, such as the trust agreement or custodial agreement. Contact Fidelity for specific instructions.

9. What happens to my dividend and capital gains distributions during the transfer process?

Dividends and capital gains distributions earned during the transfer process will typically be credited to your Vanguard account until the transfer is complete. Once the transfer is finalized, any pending distributions will be sent to Fidelity.

10. Can I still trade in my Vanguard account while the transfer is in progress?

It’s generally not advisable to trade in your Vanguard account while a transfer is in progress. This can complicate the transfer and potentially lead to delays or errors. It is better to wait until the transfer is complete.

11. What if I want to transfer only a portion of my assets?

You can specify which assets you want to transfer to Fidelity. You don’t have to transfer the entire account. However, keep in mind that transferring only small amounts might not be cost-effective due to potential liquidation costs and administrative overhead.

12. What if I change my mind after initiating the transfer?

You can usually cancel the transfer request before it’s completed. Contact Fidelity customer service immediately to request a cancellation. There might be a limited window of time to cancel the transfer, so act quickly.

In conclusion, transferring assets from Vanguard to Fidelity is a manageable process with careful planning and attention to detail. By understanding the steps involved, considering the potential tax implications, and addressing any potential issues proactively, you can ensure a smooth and successful transition. Happy investing!