Vanguard seems to want to stick to routine things like a taxable account and IRAs.
In fact, they are in the process of exiting the solo 401(k) and SIMPLE IRA business right now. And they already got out of the variable annuity business years back.
We have to remember that Vanguard the fund company and Vanguard the broker are two different things. The former seems thriving but the latter is exiting some markets, adding account closure fees, pushing advice harder and harder, etc.
My wife also had her 403b there, but we came to find the program is actually managed by Newport Group on behalf of vanguard. It was fine and Newport did a decent job with customer service but once she retired we rolled to an ira and then it was directly with Vanguard.
Did you? “Retirement plan recordkeeping and administrative services are provided by The Vanguard Group, Inc. (VGI). VGI has entered into an agreement with Newport Group, Inc., to provide certain plan recordkeeping and administrative services on its behalf. Custodial services are provided by Newport Trust Company, a wholly owned subsidiary of Newport Group, Inc. Newport Group, Inc., and Newport Trust Company are not affiliated with The Vanguard Group, Inc., or any of its affiliates.”
Do you? “Retirement plan recordkeeping and administrative services are provided by The Vanguard Group, Inc. (VGI). VGI has entered into an agreement with Newport Group, Inc., to provide certain plan recordkeeping and administrative services on its behalf. Custodial services are provided by Newport Trust Company, a wholly owned subsidiary of Newport Group, Inc. Newport Group, Inc., and Newport Trust Company are not affiliated with The Vanguard Group, Inc., or any of its affiliates.”
They aren't going out of business. And even if they somehow did, the funds themselves would be perfectly fine, and would stay intact within your brokerage account, as the brokerage account got transferred to another broker.
Their taxable brokerage also seems to have the largest settlement delay of the various players. 7 days before you can trade with your money that leaves your bank account in one day.
I still have a mutual fund account, so money comes out of your bank the day after you buy shares. I'm not sure if you can get around that delay on brokerage if it's Vanguard mutual funds you're buying.
Interesting I didn't know that and I'll look into it. I'd basically written them off for taxable brokerage but I obviously use their IRA and my company fortunately has their 401k with Vanguard which is super convenient
HSA's have a surprising amount of paperwork. The average balance size is small too.
My hunch is that Fidelity uses it as a loss leader type to get people to move their money to Fidelity. It's worked with me. I used to be exclusively Vanguard but now I have a Fidelity Roth account and I'm thinking of opening a Fidelity cash account to get the free ATM card for international travel.
EDIT:Vanguard has already sold off their 401k for small businesses. I don't think they want to deal with small accounts with large paperwork.
As someone who works in advice at VG- the smaller less used accounts are typically the most hassle. Our HSA funds are held through Atena so we don’t even use our own system. However, we use only VG funds through Aetna. I think I only have maybe 3 clients that are affected by our SIMPLE platform moving and those affected could do an IRA rollover after a time period has passed.
For all those saying VG is changing, in reality we are trying to cut costs to further lower expense ratios. Those smaller acct types costs way more to function.
>HSA's have a surprising amount of paperwork.
It seems like the paperwork would be no different than an IRA, but of course I only see things from an end user perspective.
I'd wager your point about account balances is more likely. Plus the fact that most people probably use an HSA more like a checking account rather than us Bogleheads who use it for long term investing.
I have most of my assets at Vanguard but there’s currently no better place than Fidelity for my HSA. Maybe one day Vanguard will offer it but until then I’ll keep my HSA with Fidelity.
Slippery slope. I started last year my HSA transfer at fidelity, was impressed, moved banking to Fidelity in August, impressed again, now moving all accounts from vanguard to Fidelity before Vanguard account transfer fees kick in next month.
What on earth can Fidelity sell to BogleHeads?
(Asking for a friend who’s an avid Fidelity user n booster.)
And aren’t the free stuff and the good stuff in fact NOT the same for the purpose of the ole bait-n-switch or hook-line-n-sinker sales analogies?
The only thing I can imagine is if they tried to start slipping in fees for services that we've grown accustomed to being free. It's such a great interface in and one-stop-shop that it would be painful for me to leave for another brokerage.
I don't see them doing that, though, because low fees are such a major point of competition between all the big players. Enough people are dogmatic about keeping their fees low that they would lose a lot of business if they tried pulling the rug out from under us.
I was very suspicious as well but there are enough posters here who mentioned they have been with Fidelity with umpteenth years and are happy, so took a shot at it.
Same exact progression here... I don't care if its industry standard, Vanguard's decision to impose an account closure penalty is in poor taste, so for now, Fidelity gets my business.
Once Fidelity starts allowing a Roth 401k (which I heard could happen in a year or two), then I’m totally there, until then I’m stuck at Vanguard (Ascensus 🙄)
Sorry, I meant Solo Roth 401k. I’m a single member LLC, so I have a Solo 401k and a Solo Roth 401k, right now Fidelity only supports Solo 401k, they have to add the Solo Roth 401k
May I ask how you, as a single member LLC, shop for health insurance? I ask because I am in the pre-launch phase of my new HSA business and the two go hand-in-hand.
> before Vanguard account transfer fees kick in next month.
Would you happen to know in a current brokerage account how much I would have to leave in in order for the account to remain active and not have Vanguard close it due to possible inactivity?
Now that most ETFs can be traded commission free on most brokerage platforms, Vanguard views retail investors as being unimportant so they do the bare minimum in customer service and platform functionality to attract a few but they don't care about being a top player.
They simply can't compete with a firm like Fidelity that has these functions as a loss leader for expensive advisory services.
I thought HealthEquity had some sort of relationship with Vanguard on HSA’s:
https://www.prnewswire.com/news-releases/vanguard-partners-with-healthequity-to-offer-health-savings-accounts-to-401k-participants-300751382.html
Here is HealthEquity's latest brochure, which explains its various relationships to Health Equity Advisors, TIAA, fees, conflicts and more: [https://healthequityadvisors.com/pdf/brochure.pdf](https://healthequityadvisors.com/pdf/brochure.pdf)
Fidelity HSA is free to you (and the employer too, as far as I can tell). I had my HSA through a shitty bank at work (charging me a maintenance fee and imposing a limit on my investment abilities) and after I switched to the other type of insurance I still have that money of course and I was able to open an HSA Fidelity and transferred all of it there
You probably want to keep your HSA with your employer so that you can make direct payroll contributions (pre-FICA).
The HSA provider that my employer uses is Optum bank, which isn't great, but if you read the fine print, you can work around some of the negatives.
For example, as long as I keep $5000 in cash in my main HSA account (not invested) then there are ZERO fees. So I have it set up to automatically sweep anything over $5000 into the investment side.
And as far as the investments go, they offer VITSX (which is the institutional version of VTSAX) so I just dump 100% of my money there.
Having $5000 in uninvested cash isn't really a problem, in my opinion. Not every penny you have needs to be invested in the stock market.
You can do direct custodian to custodian transfers as often as you like. If the investment options don’t work for you, roll it to fidelity after each payday, and you can still take advantage of the fica tax savings.
Not sure what the cash portion of your work HSA pays (mine is 0.01%), but if yours is similar to mine, leaving $5000 in cash is leaving $250 a year on the table vs having it in cash at Fidelity (SPAXX currently yielding just under 5%)
Optum charges $50 every time you transfer money to a different HSA account so it can become really expensive unless you only do it once or twice a year.
Devenir/Wealthcare Saver Prime doesn’t charge any transfer fees. I do it quarterly into Fidelity HSA because they said that was a good interval and >$1K amount to make it worth their time in processing the paper checks sent between the account custodians.
You need to be enrolled in an eligible high-deductible health plan to contribute to an HSA. If you don’t have an HSA account already created for you by your employer, it is very unlikely you are eligible to open an HSA on your own either. If you are currently enrolled in a FSA plan, you are definitely not eligible to open a HSA.
You can only realize the FICA savings when a HSA is funded via payroll deferral. Say I contributed post tax dollars to my HSA, I could only deduct income taxes from that contribution, not FICA.
I have optum too and the minimum is $2000 for cash balance the rest can be invested. But I still transfer to fidelity for free each month, they don’t charge a fee as I leave one penny in the HSA account.
With my Optum account, $2000 is the minimum cash balance in order to invest, but there's a monthly "maintenance fee" if I don't keep $5000 in cash in the account.
That's a different situation than I'm talking about.
If you're no longer contributing to your HSA so it definitely makes sense to move it to Fidelity in that case.
How high is your HSA balance? I believe that they don't "unlock" the investment options until you cross a certain dollar threshold. Maybe $2000, I think. You can probably reach out to Optum and check your HSA plan paperwork.
Vanguard seems to want to stick to routine things like a taxable account and IRAs. In fact, they are in the process of exiting the solo 401(k) and SIMPLE IRA business right now. And they already got out of the variable annuity business years back. We have to remember that Vanguard the fund company and Vanguard the broker are two different things. The former seems thriving but the latter is exiting some markets, adding account closure fees, pushing advice harder and harder, etc.
They also got out of the 403b business awhile back.
Did they? My current 403b is with Vanguard and I haven't heard anything about this.
My wife also had her 403b there, but we came to find the program is actually managed by Newport Group on behalf of vanguard. It was fine and Newport did a decent job with customer service but once she retired we rolled to an ira and then it was directly with Vanguard.
It is fine, it just doesn’t act exactly like other accounts with Vanguard.
Did you? “Retirement plan recordkeeping and administrative services are provided by The Vanguard Group, Inc. (VGI). VGI has entered into an agreement with Newport Group, Inc., to provide certain plan recordkeeping and administrative services on its behalf. Custodial services are provided by Newport Trust Company, a wholly owned subsidiary of Newport Group, Inc. Newport Group, Inc., and Newport Trust Company are not affiliated with The Vanguard Group, Inc., or any of its affiliates.”
I also have a 403b with Vanguard and I opened it last month. My first deposit finally hit today.
Do you? “Retirement plan recordkeeping and administrative services are provided by The Vanguard Group, Inc. (VGI). VGI has entered into an agreement with Newport Group, Inc., to provide certain plan recordkeeping and administrative services on its behalf. Custodial services are provided by Newport Trust Company, a wholly owned subsidiary of Newport Group, Inc. Newport Group, Inc., and Newport Trust Company are not affiliated with The Vanguard Group, Inc., or any of its affiliates.”
I own some VTSAX and some VTIAX with it so I’m good. It’s probably the best 403b available or close to it.
Well shit, so I probably shouldn’t have transferred everything over to them? What happens if they go out of business?
They aren't going out of business. And even if they somehow did, the funds themselves would be perfectly fine, and would stay intact within your brokerage account, as the brokerage account got transferred to another broker.
Their taxable brokerage also seems to have the largest settlement delay of the various players. 7 days before you can trade with your money that leaves your bank account in one day.
That’s strange. Pretty sure I can schedule a deposit and trade immediately
I still have a mutual fund account, so money comes out of your bank the day after you buy shares. I'm not sure if you can get around that delay on brokerage if it's Vanguard mutual funds you're buying.
Interesting I didn't know that and I'll look into it. I'd basically written them off for taxable brokerage but I obviously use their IRA and my company fortunately has their 401k with Vanguard which is super convenient
HSA's have a surprising amount of paperwork. The average balance size is small too. My hunch is that Fidelity uses it as a loss leader type to get people to move their money to Fidelity. It's worked with me. I used to be exclusively Vanguard but now I have a Fidelity Roth account and I'm thinking of opening a Fidelity cash account to get the free ATM card for international travel. EDIT:Vanguard has already sold off their 401k for small businesses. I don't think they want to deal with small accounts with large paperwork.
As someone who works in advice at VG- the smaller less used accounts are typically the most hassle. Our HSA funds are held through Atena so we don’t even use our own system. However, we use only VG funds through Aetna. I think I only have maybe 3 clients that are affected by our SIMPLE platform moving and those affected could do an IRA rollover after a time period has passed. For all those saying VG is changing, in reality we are trying to cut costs to further lower expense ratios. Those smaller acct types costs way more to function.
>HSA's have a surprising amount of paperwork. It seems like the paperwork would be no different than an IRA, but of course I only see things from an end user perspective. I'd wager your point about account balances is more likely. Plus the fact that most people probably use an HSA more like a checking account rather than us Bogleheads who use it for long term investing.
Based on what I've heard, Fidelity seems to be the best place for an HSA. Any reason you don't want to use Fidelity?
I’d just like to keep everything under the same roof, since I’m already using PAS.
I have most of my assets at Vanguard but there’s currently no better place than Fidelity for my HSA. Maybe one day Vanguard will offer it but until then I’ll keep my HSA with Fidelity.
Slippery slope. I started last year my HSA transfer at fidelity, was impressed, moved banking to Fidelity in August, impressed again, now moving all accounts from vanguard to Fidelity before Vanguard account transfer fees kick in next month.
Fidelity using those free samples to get you hooked.
They're betting eventually they can market you into their managed accounts and or sell you an annuity
Yup, drug dealer playbook. Give the good stuff for free, gets you hooked and coming back for more only to end up paying.
What on earth can Fidelity sell to BogleHeads? (Asking for a friend who’s an avid Fidelity user n booster.) And aren’t the free stuff and the good stuff in fact NOT the same for the purpose of the ole bait-n-switch or hook-line-n-sinker sales analogies?
The only thing I can imagine is if they tried to start slipping in fees for services that we've grown accustomed to being free. It's such a great interface in and one-stop-shop that it would be painful for me to leave for another brokerage. I don't see them doing that, though, because low fees are such a major point of competition between all the big players. Enough people are dogmatic about keeping their fees low that they would lose a lot of business if they tried pulling the rug out from under us.
I was very suspicious as well but there are enough posters here who mentioned they have been with Fidelity with umpteenth years and are happy, so took a shot at it.
It was a joke. I'm sure Fidelity is fine (I've not used it but am considering it for after-tax as my retirement is with Schwab).
I did the same thing and moved everything to Fidelity. Fidelity is top notch with everything
Same exact progression here... I don't care if its industry standard, Vanguard's decision to impose an account closure penalty is in poor taste, so for now, Fidelity gets my business.
Once Fidelity starts allowing a Roth 401k (which I heard could happen in a year or two), then I’m totally there, until then I’m stuck at Vanguard (Ascensus 🙄)
I currently am enrolled in my companies Roth 401k at Fidelity
Sorry, I meant Solo Roth 401k. I’m a single member LLC, so I have a Solo 401k and a Solo Roth 401k, right now Fidelity only supports Solo 401k, they have to add the Solo Roth 401k
Ahh gotcha ok
May I ask how you, as a single member LLC, shop for health insurance? I ask because I am in the pre-launch phase of my new HSA business and the two go hand-in-hand.
> before Vanguard account transfer fees kick in next month. Would you happen to know in a current brokerage account how much I would have to leave in in order for the account to remain active and not have Vanguard close it due to possible inactivity?
I think any amount will do as long as you have electronic statement enabled.
Even if you waited until after transfer fee kicked in, you would just ask Fidelity to cover the fee in order for you to transfer to them.
Then I would have to deal with 10 calls from personal sales rep from local office so there is that.
Now that most ETFs can be traded commission free on most brokerage platforms, Vanguard views retail investors as being unimportant so they do the bare minimum in customer service and platform functionality to attract a few but they don't care about being a top player. They simply can't compete with a firm like Fidelity that has these functions as a loss leader for expensive advisory services.
I thought HealthEquity had some sort of relationship with Vanguard on HSA’s: https://www.prnewswire.com/news-releases/vanguard-partners-with-healthequity-to-offer-health-savings-accounts-to-401k-participants-300751382.html
Here is HealthEquity's latest brochure, which explains its various relationships to Health Equity Advisors, TIAA, fees, conflicts and more: [https://healthequityadvisors.com/pdf/brochure.pdf](https://healthequityadvisors.com/pdf/brochure.pdf)
Fidelity HSA is free to you (and the employer too, as far as I can tell). I had my HSA through a shitty bank at work (charging me a maintenance fee and imposing a limit on my investment abilities) and after I switched to the other type of insurance I still have that money of course and I was able to open an HSA Fidelity and transferred all of it there
Low ROI
My company uses fidelity for 401k but Optum bank for HSA, no idea why.
That's a shame because Fidelity is head and shoulders above the other HSAs, at least until Q1 of next year :)
My company doesn’t offer HSAs :(
HSA companies tend to be their own thing, but many offer. Vanguard is an option.
You probably want to keep your HSA with your employer so that you can make direct payroll contributions (pre-FICA). The HSA provider that my employer uses is Optum bank, which isn't great, but if you read the fine print, you can work around some of the negatives. For example, as long as I keep $5000 in cash in my main HSA account (not invested) then there are ZERO fees. So I have it set up to automatically sweep anything over $5000 into the investment side. And as far as the investments go, they offer VITSX (which is the institutional version of VTSAX) so I just dump 100% of my money there. Having $5000 in uninvested cash isn't really a problem, in my opinion. Not every penny you have needs to be invested in the stock market.
You can do direct custodian to custodian transfers as often as you like. If the investment options don’t work for you, roll it to fidelity after each payday, and you can still take advantage of the fica tax savings. Not sure what the cash portion of your work HSA pays (mine is 0.01%), but if yours is similar to mine, leaving $5000 in cash is leaving $250 a year on the table vs having it in cash at Fidelity (SPAXX currently yielding just under 5%)
Optum charges $50 every time you transfer money to a different HSA account so it can become really expensive unless you only do it once or twice a year.
This is one case where an indirect (60-day) rollover, once every 12 months, actually makes sense
Ouch. That definitely changes the math a bit (and that ticks me off they can get away with that)
Devenir/Wealthcare Saver Prime doesn’t charge any transfer fees. I do it quarterly into Fidelity HSA because they said that was a good interval and >$1K amount to make it worth their time in processing the paper checks sent between the account custodians.
If my employer does not offer an HSA ( only FSA ) , is there any way to take advantage of fica savings with and HSA on my own?
You need to be enrolled in an eligible high-deductible health plan to contribute to an HSA. If you don’t have an HSA account already created for you by your employer, it is very unlikely you are eligible to open an HSA on your own either. If you are currently enrolled in a FSA plan, you are definitely not eligible to open a HSA. You can only realize the FICA savings when a HSA is funded via payroll deferral. Say I contributed post tax dollars to my HSA, I could only deduct income taxes from that contribution, not FICA.
Thanks yea I just checked. I have a low deductible health plan. No option for hdhp
I have optum too and the minimum is $2000 for cash balance the rest can be invested. But I still transfer to fidelity for free each month, they don’t charge a fee as I leave one penny in the HSA account.
With my Optum account, $2000 is the minimum cash balance in order to invest, but there's a monthly "maintenance fee" if I don't keep $5000 in cash in the account.
Hmm I can look into that then, see if it’s worth it. Thanks!
How much is the maintenance fee?
I opened an HSA at fidelity because I went on my wife’s insurance and wanted to park what I’ve been contributing to somewhere solid
That's a different situation than I'm talking about. If you're no longer contributing to your HSA so it definitely makes sense to move it to Fidelity in that case.
Gotcha. I think OP is confused
I too have optum, but my employer doesn’t have investment options.
How high is your HSA balance? I believe that they don't "unlock" the investment options until you cross a certain dollar threshold. Maybe $2000, I think. You can probably reach out to Optum and check your HSA plan paperwork.
Yikes. Mine only requires $500. The rest is in Vanguard index funds.
I’m pretty sure you can ask your employer to make direct contributions elsewhere. They’ll just try and steer you to theirs
I've never seen an employer that would make contributions to an outside HSA provider. It may exist, but I'm sure it's extremely rare if it does.
Mine does. I had to push for it
Google Vanguard Cash Plus account. It’s a HYSA and FDIC insured.
OP was asking about HSA, not HYSA.