Timeline for What are reasonable administrative fees for an IRA?
Current License: CC BY-SA 3.0
12 events
| when toggle format | what | by | license | comment | |
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| Jan 17, 2015 at 1:29 | comment | added | dave_thompson_085 | Vanguard doesn't make a profit on admin functions which are jointly owned by the funds. But they do recover costs, as fees paid by each fund reducing return slightly, see the 2/year reports at least, maybe also prospectus/SAI. But credit unions similarly are member owned. I expect the difference is economy of scale; complying with the complicated and strict regulations for IRA (and other qualified plan) fiduciaries needs expensive lawyers, accountants, etc., but Vanguard spreads this over many millions of people versus your credit union probably thousands. | |
| Dec 31, 2014 at 2:42 | comment | added | Craig W | Does your credit union restrict which Fidelity funds you can buy? If so, another benefit of rolling over would be to remove that restriction, so you can invest in cheaper Fidelity funds like FUSEX. | |
| Dec 30, 2014 at 19:27 | history | tweeted | twitter.com/#!/StackFinance/status/550010334581653504 | ||
| Dec 30, 2014 at 18:55 | comment | added | John Chrysostom | That's right. The Fidelity funds have a .25% expense, and that is it as far as I understand. So it's a flat .5% fee. Which, as you've already pointed out is high. | |
| Dec 30, 2014 at 18:27 | history | edited | Chris W. Rea |
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| Dec 30, 2014 at 15:03 | comment | added | JTP - Apologise to Monica♦ | @JohnChrysostom - no, the funds or investments would have an expense as well. Unless you mean that the Fidelity funds have a .25% expense, and that's it. Even so, .5% is high, about 10X too high. IMHO. | |
| Dec 30, 2014 at 15:01 | answer | added | JTP - Apologise to Monica♦ | timeline score: 16 | |
| Dec 30, 2014 at 14:49 | comment | added | John Chrysostom | Thanks for the help... presumably, if I go through Vanguard and they waive their admin fees, they have to be making money somehow, right? So are there other sorts of fees they'd be making it up with? As I've added as an update to the post, the .5% admin fee is the ONLY fee I'd be paying through the credit union. | |
| Dec 30, 2014 at 14:48 | history | edited | John Chrysostom | CC BY-SA 3.0 |
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| Dec 30, 2014 at 14:44 | comment | added | Dilip Sarwate | Many IRA custodians, not just credit unions, charge a flat administrative fee (perhaps as "little" as $25) for IRAs whose value is relatively small (usually $10K or less). So, if your account is less than $10K (0.25% of which is coincidentally $25), you are getting a "bargain" from your credit union when it charges 0.25% as an administrative fee. But, @CraigW's advice of moving your account to Fidelity or Vanguard (directly to them, not through a brokerage, not even a discount brokerage) is good. Vanguard even waives the administrative fee if you elect to go paperless. | |
| Dec 30, 2014 at 14:25 | answer | added | Craig W | timeline score: 11 | |
| Dec 30, 2014 at 13:23 | history | asked | John Chrysostom | CC BY-SA 3.0 |