1

I have a managed IRA account in Fidelity, but the fees is too big for me. I want to cancel and put the money in another traditional IRA that I can choose my investments, but I wonder if I will be charge extra for this transaction.

2

You can do a direct transfer from one fund to another within Fidelity very easily. You will have to see if the two funds have any sales or redemption fees.

If you want to leave Fidelity, they should be able to transfer the funds directly to the other IRA custodian. You don't want the money to go to you, instead you want to send them send the money directly to the other firm. The new custodian will be more than happy to help facilitate the transfer.

The only fee for doing so should be if the funds you are investing in have fees for buying or selling shares. There are many options that don't have these transaction costs, both with Fidelity and with other companies.

  • Be aware that many investment companies/custodians charge a hefty fee when you leave them / close the account (and you only find out when you do that). Fidelity doesn't, but be careful where you go. – Aganju Mar 6 '16 at 13:11
  • @Aganju Surely such fees should be disclosed before the initial investment is made? Are they just hidden from novice investors in legalese? – Lilienthal Mar 7 '16 at 10:24
  • If you read the fee schedule, they are listed. But they typically don't get pointed out while you open your account. – Aganju Mar 7 '16 at 11:35
0

What you want is a position transfer, likely by ACATS. This is a transfer from one IRA to another without having to liquidate positions to do so. In effect, the brokerage firm is just transferring records from your existing IRA to your new IRA. You will need to watch out to make sure your new IRA account can hold your positions for this to work. For example, some brokerages allow you to hold fractional shares but others don't. (The fractional share amounts would be sold automatically prior to transfer.) Another example might be different fund families could be allowed between different brokerages.

The general process is open your new IRA account, initiate the ACATS xfer from your new account, your old IRA account brokerage sends the positions over, and after a week or so your new IRA brokerage notifies you that everything is transferred.

I've switched IRAs a couple times via this mechanism and never been charged a fee, but I've always stuck with the larger brokerages like Fidelity, TD Ameritrade, and Interactive Brokers.

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