I have been a Wealthfront customer for a few years now and continue to be, but I decided to transfer part of my investment there over to Fidelity.
Why I moved from Wealthfront to Fidelity?
While maintaining my Wealthfront investment with a relatively high risk tolerance at 9.0 (risk parity) and manage to earn about 21% average of gains, I feel I can achieve better performance picking funds on my own. Especially during the most recent market sell-off in March 2020, I saw Wealthfront investment as volatile as my self-directed stocks and even when the market has recovered, my Wealthfront investment barely beat the S&P 500 performance.
Besides, I prefer some flexibility in choosing the asset class to invest in and what not, which Wealthfront as a robo-advisor can only gives a diversified portfolio including the asset classes they have bundled. To be specific, I would have opted out natural resources asset class if I could.
For the lack of performance as well as lack of customization, I decided to move away from Wealthfront into a more DIY brokerage account like Fidelity.
How to consolidate investment accounts without triggering tax?
Since I didn’t want to create a taxable event this year and wanted to keep some of the funds anyways, I chose not to liquidate. I learned that I could transfer in-kind (meaning as-is) between different brokerage accounts. My plan is to sell off funds that I no longer want to keep and consolidate the rests with similar funds I also have in my Fidelity accounts.
I heard some brokerages charge a transfer or closeout fee, but fortunately both Wealthfront and Fidelity don’t. So if you’re considering a brokerage transfer, make sure to check with your new and old brokers first.
How long does it take to transfer assets between Wealthfront and Fidelity?
I initiated the transfer request online on a Friday, the 13th afternoon. Fidelity sent the request on the same day for review.
The request was completed on the following Tuesday, which was the 18th. (although the status tracker initially showed a due date of Thursday, the 20th)
Fidelity dashboard showed the new shares on Wednesday.
So, the transfer request takes about 5 days, not counting weekend.
Are the cost basis info transferred?
Yes, the cost basis will be transferred but according to Fidelity Help page, it may take up to ten days after the transfer. I have waited at least 5 days for the cost basis data to show and until the cost basis is passed, the shares are listed as margins temporarily.
What’s the process to transfer assets from Wealthfront to Fidelity?
The process is really straightforward. I didn’t even make any phone calls to support from either brokerage firms (Although, it is recommended to contact them first to make sure all securities can be transferred and no fees will be incurred either side).
All I did was initiate the process online on the receiving broker end, they validate eligibility of all the securities to be transferred, submit to Wealthfront for review.
It only takes one email from Wealthfront informing me about the transfer request and in that email, Wealthfront mentioned that the cost basis will also be provided via the Automated Customer Account Transfer Service (ACATS).
Once the investments have been transferred, Wealthfront automatically closes the account.
Hope this write-up was helpful. Remember, you don’t necessarily have to liquidate to transfer between brokerage firms, you can transfer in-kind to avoid selling your shares.