Tuesday, May 26, 2009

Jumping Ship: Moving Roth IRA to Vanguard

Last week I decide to pull the trigger on moving my Roth IRA from Edward Jones to Vanguard. I have been contemplating doing this for a while, but just did not have the time to do it. One of the main reasons for switching the account over is so that I could have more control. I also wanted to make sure that I do my research and find out which investments are right for me. 

I opened my Roth IRA in 2005 with Edward Jones with a tax return I had received. One of the first things I learned by opening this account was that the adviser was selling me on buying a fund with a front load of over 5%. I spoke with my father and we decided to go with a 1.45% load upfront with no yearly charge. Recently Edward Jones was getting rid of the fund I was investing in and I had to choose another one. Again I was was sold on changing over to a Fund which has a 5.75% load charge. With seeing how Vanguard's low investment cost are was the main factor that lead me away from Edward Jones and to take control of all my investment's myself.

One other thing that I learned as well with switching over is that the funds I have, have a fee if I moved money out of the fund before 7 years. It comes out to about between $140-160, which I don't want to lose, but in the long run I think it will be the best choice, especially since this year one of my goals is to max out my Roth. With keeping an Edward Jones account I have a yearly fee for them managing my account for around $40. I think I can make it up in the long run and no need to pay the extra fee when I could be investing that money.

It would not be fair to Edward Jones if I did not admit that I had a good experience using them. My adviser called me every quarter to check on me and told me some investments he liked. He was never pushy and he told me to reach out to him if I had any questions or investments I wanted him to check into. I believe Edward Jones is a great company for someone who isn't interested in doing all the work and don't mind someone else managing their money. Just with starting to look more closely to all my investments I feel this is the best decision for me and that it can save me some money in the long run.

Making the change over to Vanguard so far has been very nice experience, their customer service helped me with transferring everything over. They stayed on the phone with me and walked me step by step through the process. I have heard many bloggers speak highly of Vanguard and I am looking forward to my Roth being with Vanguard. If it is as good as I hope it is, I will be transferring my old 401k to a Vanguard IRA as well where I can mange most of my investments in one place instead of all over the place as of right now.

Did I make the right decisions? Let me know, also I have about 19 days before the money is completely transfered, I am researching different funds to purchase once the money is there. If you have any that you like leave me a comment and I will research it!


  1. Well, I think Ben Graham would probably say the cost of the management of the fund is the greatest factor in determining your returns - since apparently, the vast majority of funds barely match the market, if not trail it.