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Kansas Kid
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In reply to Hungry Ojos • 7:59p, 1/24/24
Hungry Ojos said:
So they'll tell you what to buy or what specific mutual funds to invest in? How do they charge me for that service? Isn't that the same as just having a broker? I know it's pathetic, but I honestly have no idea.
Here is Vanguard's fee structure and some of what they can do. I haven't used them but know many who have.

[url=https://investor.vanguard.com/wealth-management/services?cmpgn=RIG:PS:XXX:PAS:05222023:GSM:BD_PAS_UHNW_Phrase:NOTARG:NONE:BD_WealthManagement:Ad&gad_source=1&gclid=EAIaIQobChMIsN76jrj3gwMVRy7UAR0osQzmEAAYAiAAEgJk-vD_BwE&gclsrc=aw.ds]https://investor.vanguard.com/wealth-management/services?cmpgn=RIG:PS:XXX:PAS:05222023:GSM:BD_PAS_UHNW_Phrase:NOTARG:NONE:BD_WealthManagement:Ad&gad_source=1&gclid=EAIaIQobChMIsN76jrj3gwMVRy7UAR0osQzmEAAYAiAAEgJk-vD_BwE&gclsrc=aw.ds[/url]
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Dr T and the Women
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In reply to Hungry Ojos • 8:12p, 1/24/24
AG
I have a good guy in Austin at Merrill

I have beaten him down on fees but I did deliver his baby

If interested I'll make an introduction
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P.H. Dexippus
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9:12p, 1/24/24
AG
Another vote for Fidelity. Just went through consolidating accounts for my wife and I at Fidelity, and it couldn't be easier. Brought brokerage, HSA, and IRA accounts over from Schwab, ETrade, Merril, Optum. Already had our 529s at Fidelity. I'm awaiting a final matching contribution to land from a terminated employer plan through Vanguard, then will be moving that over as well. Have 80% of funds in total market and S&P 500 index funds. We setup a Fidelity Charitable donor advised fund to make tax efficient gifts, we are using a Fidelity joint brokerage account as a checking/bill pay account earning almost 5% on the cash parked there, and have the Fidelity 2% unlimited cash back credit card.

You'd qualify as Private Client Group with dedicated support at that net worth. FWIW, I'm a law partner a few years behind you on both age and balance sheet. Had to dodge NWM solicitations for years and some whole life insurance hard sells.
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Ag92NGranbury
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In reply to Aggie09Derek • 9:22p, 1/24/24
AG
Aggie09Derek said:
Need an 8 figure thread

Deca Thread!
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ToddyHill
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7:15a, 1/25/24
AG
We are in the process of moving our holdings from Schwab to Fidelity. We've only met with Fidelity twice, but I'm impressed. One thing that is huge...they are not on commission. I manage our holdings, so we won't be going into their wealth advisory, or whatever they call it. Plus, I like the fact they are privately held. If there are any negatives about Fidelity, I'd like to hear them. Thus far, all we've heard has been positive.
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Cyp0111
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In reply to ToddyHill • 8:18a, 1/25/24
Fidelity is great as is vanguard.
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Aggie09Derek
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In reply to ToddyHill • 8:37a, 1/25/24
AG
So what exactly are they doing for you that Schwab is not?

I recently got moved from TD to Schwab and not loving the app but good chance it's just me needing to dive in further and learn where stuff is.

I make 2-3 trades a month on average and 60-70% of my non retirement brokerage account is in individual stocks.
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ToddyHill
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In reply to Aggie09Derek • 9:53a, 1/25/24
AG
I've been with Schwab for over 40 years. All of it self-directed (for the most part).

A little over a year ago, Schwab mismanaged our portfolio, resulting in a mid five figure hit to our assets. While the mid level Schwab professionals have acknowledged the mistake, Schwab's Legal team in Westlake, and their Risk Management in Phoenix have told us to pound sand, and will not compensate us fully for the losses.

I have had no issues with Schwab all these years, and I like their platform. However, when we agreed to have our portfolio professionally managed, the wheels came off.

As such, we're now moving our assets.
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Pepper Brooks
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In reply to Cyp0111 • 10:58a, 1/25/24
AG
Cyp0111 said:
Fidelity is great as is vanguard.


Fidelity is far more flexible when it comes to fund selection and the app/GUI is better. I just moved everything from Vanguard in December.
“There is no red.
There is no blue.
There is the state.
And there is you.”

“As government expands, Liberty contracts” - R. Reagan
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YouBet
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In reply to Cyp0111 • 12:23p, 1/25/24
AG
Cyp0111 said:
Fidelity is great as is vanguard.


Yep, and they have same or similar funds as Vanguard's that are actually cheaper in many cases. I see Vanguard funds thrown around here a lot and I'm not disparaging them at all but I've found Fidelity's like fund performs better (even if only slightly) in many cases.

Anecdotally, Vanguard's customer service is not as strong as Fidelity's. My mom moved all of their stuff from Vanguard to Fidelity because Vanguard kept screwing up her paperwork.

Also, the Fidelity Charitable account is badass for those looking for a centralized charity solution to fund, grant, and then get one document for tax purposes.
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MAS444
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In reply to ToddyHill • 12:28p, 1/25/24
AG
Quote:
A little over a year ago, Schwab mismanaged our portfolio, resulting in a mid five figure hit to our assets.
What did they do/not do more specifically if you don't mind saying? I have a rollover account there that they manage is why I'm asking.
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P.H. Dexippus
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12:59p, 1/25/24
AG
If you are going to be bringing high 6 to low 7 figures over to Fidelity, call them up or better yet, walk into a retail location and ask about transfer incentives they will offer you. They regularly run promotion for transferring in assets or will match bonus offers from other firms.

https://www.bogleheads.org/forum/viewtopic.php?t=196884&start=7400
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EvenPar
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In reply to Spinnerag • 2:03p, 1/25/24
AG
Spinnerag said:


Also, whole life isn't a good tool to build wealth. Term life is the way to go.


I guess it's safe to presume you don't prescribe to the "Be Your Own Bank" model that While Life can offer if set up correctly. Can you explain how you are building wealth with Term Life?
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P.H. Dexippus
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In reply to EvenPar • 2:06p, 1/25/24
AG
EvenPar said:
Spinnerag said:


Also, whole life isn't a good tool to build wealth. Term life is the way to go.


I guess it's safe to presume you don't prescribe to the "Be Your Own Bank" model that While Life can offer if set up correctly. Can you explain how you are building wealth with Term Life?

By taking the difference between the huge premiums and commissions associated with whole life, and the modest commissions of term life, and investing the difference.
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Cyp0111
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In reply to EvenPar • 2:09p, 1/25/24
I mean- anyone can take a margin loan against shares but not have the high fee burden of a whole life policy.
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ToddyHill
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In reply to MAS444 • 4:57p, 1/25/24
AG
Quote:
What did they do more specifically if you don't mind saying? I have a rollover account there
About 15 months ago, we opted to sign on with their Wealth Advisory group. After reviewing our portfolios, they strongly recommended we reduce our energy holdings, which at that time were about 20% of our assets. I agreed, and about 90% of our energy holdings were sold.

6 months later, we get hit with an IRS tax bill for a little over $42,000. Unbeknown to me at the time, Limited Partnership Units that are sold, even in a Rollover IRA, are subject to UBIT taxes. Everything that was sold were in two rollover IRA's. When I reached out to the Wealth Advisor, he refused to return my email or call me. When we finally met face to face, he denied his actions triggered the tax. The irony is that I never planned to sell the units. They paid a healthy dividend, which we planned to use in our retirement years

After a few more weeks of digging, and showing them the tax forms, Schwab admitted the mistake. We terminated our involvement with the Wealth Advisor, and will be soon transferring our accounts to Fidelity.

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MAS444
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In reply to ToddyHill • 5:11p, 1/25/24
AG
Damn that sux. Thanks for the info. You should maybe talk to a lawyer that handles securities cases.
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Dr T and the Women
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In reply to ToddyHill • 5:19p, 1/25/24
AG
ToddyHill said:
Quote:
What did they do more specifically if you don't mind saying? I have a rollover account there
About 15 months ago, we opted to sign on with their Wealth Advisory group. After reviewing our portfolios, they strongly recommended we reduce our energy holdings, which at that time were about 20% of our assets. I agreed, and about 90% of our energy holdings were sold.

6 months later, we get hit with an IRS tax bill for a little over $42,000. Unbeknown to me at the time, Limited Partnership Units that are sold, even in a Rollover IRA, are subject to UBIT taxes. Everything that was sold were in two rollover IRA's. When I reached out to the Wealth Advisor, he refused to return my email or call me. When we finally met face to face, he denied his actions triggered the tax. The irony is that I never planned to sell the units. They paid a healthy dividend, which we planned to use in our retirement years

After a few more weeks of digging, and showing them the tax forms, Schwab admitted the mistake. We terminated our involvement with the Wealth Advisor, and will be soon transferring our accounts to Fidelity.

I think you would have been paying taxes the whole time. UBTI

https://www.fidelity.com/tax-information/tax-topics/ubti
No material on this site is intended to be a substitute for professional medical advice, diagnosis or treatment. See full Medical Disclaimer.
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Kansas Kid
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In reply to Dr T and the Women • 5:26p, 1/25/24
Dr T and the Women said:
ToddyHill said:
Quote:
What did they do more specifically if you don't mind saying? I have a rollover account there
About 15 months ago, we opted to sign on with their Wealth Advisory group. After reviewing our portfolios, they strongly recommended we reduce our energy holdings, which at that time were about 20% of our assets. I agreed, and about 90% of our energy holdings were sold.

6 months later, we get hit with an IRS tax bill for a little over $42,000. Unbeknown to me at the time, Limited Partnership Units that are sold, even in a Rollover IRA, are subject to UBIT taxes. Everything that was sold were in two rollover IRA's. When I reached out to the Wealth Advisor, he refused to return my email or call me. When we finally met face to face, he denied his actions triggered the tax. The irony is that I never planned to sell the units. They paid a healthy dividend, which we planned to use in our retirement years

After a few more weeks of digging, and showing them the tax forms, Schwab admitted the mistake. We terminated our involvement with the Wealth Advisor, and will be soon transferring our accounts to Fidelity.

I think you would have been paying taxes the whole time. UBTI

https://www.fidelity.com/tax-information/tax-topics/ubti

MLPs, which I assume they were, shouldn't be held in a tax advantaged account for that reason.

If you have them in a regular account, also remember the depreciation benefit you get each year that makes the dividends largely tax deferred is "recaptured" as ordinary income when you sell. If you have had them for a long time, this tax bill can be sizable on top of the usual capital gains.

Note: if you die while holding them, the basis is stepped up and all of the ordinary and capital gains income is avoided.
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ToddyHill
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In reply to MAS444 • 5:55p, 1/25/24
AG
Unfortunately, when you sign on with the Wealth Management group, you agree to binding Arbitration. I went through arbitration about 20 years ago, and quickly learned it's a stacked deck against the little guy.
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ToddyHill
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In reply to Kansas Kid • 5:56p, 1/25/24
AG
Quote:
Note: if you die while holding them, the basis is stepped up and all of the ordinary and capital gains income is avoided.
That was my plan.
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Kansas Kid
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In reply to ToddyHill • 6:27p, 1/25/24
ToddyHill said:
Quote:
Note: if you die while holding them, the basis is stepped up and all of the ordinary and capital gains income is avoided.
That was my plan.

Your rollover IRA wouldn't have enjoyed that step up on the MLPs.
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Mmetag10
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In reply to Kansas Kid • 6:43p, 1/25/24
AG
How does it affect an hsa?
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Kansas Kid
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In reply to Mmetag10 • 6:47p, 1/25/24
Mmetag10 said:
How does it affect an hsa?
They have the same issue as IRAs. UBTI above $1,000 triggers tax liability and no step up on death.

Here is how Fidelity handles it.

An IRA is an exempt entity separate from the beneficial owner of the IRA and can be subject to taxation on its own. UBTI is subject to taxation in all varieties of retirement accounts, such as IRAs, retirement plans like Keoghs, and health savings accounts (HSA). When total positive UBTI across all applicable investments held in a retirement account equals $1,000 or more, then Form 990-T must be filed.
Preparation and tax filing
  • As custodian, Fidelity will complete and file Form 990-T on behalf of your retirement account.
  • We will pay any resulting taxes, penalties, and interest from available cash in your account.
  • Any amounts remitted from the account to pay this tax will not be reported as a taxable distribution on IRS Form 1099-R.
  • Review any net operating losses (NOLs), MLPs, or LPs with your tax advisor. This information may reduce your tax liability. Any additional information may be submitted to Fidelity using the Supporting information for Form 990-T filing (PDF) form.
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ToddyHill
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In reply to Kansas Kid • 7:43p, 1/25/24
AG
Thanks for that info. Very interesting.
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Kansas Kid
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In reply to ToddyHill • 8:18p, 1/25/24
If you want MLP exposure in a tax advantaged account, buy an ETF like KYN or AMLP. Note: KYN uses leverage and is a CEF trading at a discount to par.
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ToddyHill
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In reply to Kansas Kid • 10:20a, 1/26/24
AG
Thank you Kansas
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canadianAg
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3:33p, 2/10/24
AG
Have always followed this thread with interest as it was started as I was in my senior year at A&M. But I don't think I've contributed anything.

I've been doing the typical rate race in corporate America and have always had the goal of having a liquid net worth of $1m by 35. Below is my current makeup. It will be heavily market dependent but we have a shot, although more than likely I think we hit it at 36 (currently 32). We've managed to do this with my wife only working part time (10-15 hours a week) for several years now after we started having kids. It can be done, we just don't keep up with the jones'. We keep vehicles a long time. We agreed to get a $30k minivan instead of a $60k suburban even though that's what everyone has. Haven't stretched housing too far. We prefer to spend money on vacations but we still try to take advantage of credit cards etc… I've also been very fortunate in my career to ride someone's coattails and progress quicker than I expected but I certainly worked hard to get noticed and paid my dues early.

It's exciting to finally have it within sight it feels like.

401k: $270k (50/50 Roth and tradition).
Company stock: $120k
Cash value of defined contribution pension: $90k
Roth IRA: $35k
Traditional IRA: $25k
HSA: $40k
Cash: $75k
Not counted: company medical retirement account, no telling if I'll survive layoffs until 50 but if I can, that account will be worth upwards of $500k
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Cyp0111
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In reply to canadianAg • 3:46p, 2/10/24
Great work.
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Brian Earl Spilner
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4:46p, 2/10/24
AG
If I can manage to keep my current saving rate (and assuming an average market return of 5%), I should be able to join the club within the next five years.

But with how the market can be, there's no telling when it'll happen.
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EliteZags
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8:45p, 2/10/24
AG
those above with high 401K to Roth IRA ratios, are you inhibited from backdoor Roth IRA from having rollover traditional IRAs from old 401Ks(pro rata rule)?

I'm at roughly 350K between 3 401ks, and 130K in Roth IRA

have held off on rolling over any 401Ks to try to maintain being able to max backdoor Roth each year as long as possible, but wondering if I'm missing anything with being able to continue this
really value the tax free gains
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YouBet
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In reply to EliteZags • 8:52p, 2/10/24
AG
EliteZags said:
those above with high 401K to Roth IRA ratios, are you inhibited from backdoor Roth IRA from having rollover traditional IRAs from old 401Ks?

I'm at roughly 350K between 3 401ks, and 130K in Roth IRA

have held off on rolling over any 401Ks to try to maintain being able to max backdoor Roth each year as long as possible, but wondering if I'm missing anything with being able to continue this
really value the tax free gains


Inhibited from a tax perspective, yes. I rolled my 401k and because it was both pre-tax and after-tax contributions it rolled into my Traditional and Roth IRAs so I no longer do a back door Roth.
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Brian Earl Spilner
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In reply to EliteZags • 9:43p, 2/10/24
AG
Worth pointing out that my 401k total above includes a good chunk of mega backdoor Roth contributions.
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gggmann
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In reply to EliteZags • 9:45p, 2/10/24
AG
EliteZags said:
those above with high 401K to Roth IRA ratios, are you inhibited from backdoor Roth IRA from having rollover traditional IRAs from old 401Ks(pro rata rule)?

I'm at roughly 350K between 3 401ks, and 130K in Roth IRA

have held off on rolling over any 401Ks to try to maintain being able to max backdoor Roth each year as long as possible, but wondering if I'm missing anything with being able to continue this
really value the tax free gains
Most 401K's give you limited investment choices. For example, mine will allow me to invest in most mutual funds and ETFs, but it doesn't allow me to invest in individual stocks, REITs, or trade options.

With a roll over IRA you have freedom to invest in and trade what you want.

If your current 401K offers a Roth option and a mega backdoor Roth, then you can use that instead of a backdoor Roth IRA. Another option is to wait until you stop work and then do Roth conversions (if it makes sense for your tax situation).

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TXTransplant
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In reply to EliteZags • 9:16a, 2/11/24
EliteZags said:
those above with high 401K to Roth IRA ratios, are you inhibited from backdoor Roth IRA from having rollover traditional IRAs from old 401Ks(pro rata rule)?

I'm at roughly 350K between 3 401ks, and 130K in Roth IRA

have held off on rolling over any 401Ks to try to maintain being able to max backdoor Roth each year as long as possible, but wondering if I'm missing anything with being able to continue this
really value the tax free gains


Yes, I am now unable to contribute to my Roth because I rolled over an old 403b to an IRA a couple of years ago. Didn't fully understand the limitations and contributed to my Roth anyway that year and had to pay taxes on the contribution.

To make up for that, I now have a mega backdoor Roth as part of my 401k with Fidelity. I put about the equivalent of what I would put in my old Roth into that each year with the goal of increasing over time.

Downside is, the money is invested the same as my 401k, and I have to contribute from each paycheck (I used to do lump sum Roth contributions). But at the end of the day (or year), it all works out about the same. My main goal was to not lose that tax-advantaged savings option.
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