TRowe's Summit Program for investors holding > $500K

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RetiredCSProf
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TRowe's Summit Program for investors holding > $500K

Post by RetiredCSProf »

TRowe recently notified me that they will be offering a new benefit to clients holding over $500K across their accounts. The Summit Program will offer reduced net expense ratios (similar to the concept of reduced net expense ratios with Vanguard's Admiral class). For example, the NER for Blue Chip Growth (TRBCX) would drop from 0.68% to 0.56% and the NER for Equity Index 500 (PREIX) would drop from 0.18% to 0.05%. There are a couple other perks, such as the ability to invest in "closed" funds.

I have about a $70K gap to reach the goal of $500K combined in my rollover IRA and Roth IRA at TRowe. I am retired, age 73, and currently have no earned income that would allow me to contribute to a Roth. I am tempted to adjust my current investment strategy to help me reach the goal; otherwise, I feel like this is a "missed opportunity."

My plan is as follows:
1) No withdrawals from TRowe for the next 1-4 years: withdraw QCDs / RMDs from my Fido rollover IRA only -- govt does not care
2) Adjust my AA in TRowe rollover IRA to be more aggressive by moving some bonds to equities, given that I will not be withdrawing RMDs
3) Roll my Vanguard Roth (about $15K) into the TRowe Roth account when I am close to my goal

Another option is to move the balance of my son's 529 fund from Vanguard to TRowe. I have not compared the different plans.

What makes sense for reaching my goal?
Doctor Rhythm
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Re: TRowe's Summit Program for investors holding > $500K

Post by Doctor Rhythm »

Why would you not rollover the accounts from TRP to Fidelity or Vanguard, where the expense ratios will be even lower, without needing a mid-six-figure balance? An ER of 0.18% for a “500” fund is pretty darned high these days, and even the reduced expense ratio of 0.05% is still higher that what you could be getting.

It seems counterproductive to move money the other way as you propose: from lower expense accounts into higher expense ones, just so that the expenses won’t be quite as high but will still be higher.
cegibbs
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Re: TRowe's Summit Program for investors holding > $500K

Post by cegibbs »

I already own a lot of TRP Capital Appreciation I- Class (the lowest ER shares) directly at TRP. Seems like the new Summit program isn’t all that great in my opinion. How many actively managed funds, either open or closed, are actually worth buying? Investors are probably better off buying a cheap broad index. And if investors want to target a particular sector, buy a cheap index fund that tracks the index.
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Wiggums
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Re: TRowe's Summit Program for investors holding > $500K

Post by Wiggums »

I was with TRP with many, many years and it’s a good broker. I moved my money to Fidelity to get funds with a lower ER.
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lgb
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Re: TRowe's Summit Program for investors holding > $500K

Post by lgb »

Thank you for posting this. I have also received this and I guess do have that amount with TRP. Was unsure if this was to help 'them' or 'me'.

I do also have Fidelity stuff, and I appreciate the other comments about how they do have some lower expense options. However - what TRP offers and what I have it invested in, isn't broad index funds, and instead are more actively managed. So to switch to Fidelity for these and since TRP is my employer retirement plan it is intriguing, but wasn't sure whether it is a no brainer move or not... As I don't want to really change anything I'm invested in necessarily just because I received a piece of paper in the mail. :happy .... unless it make entire sense to do so.
aristotelian
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Re: TRowe's Summit Program for investors holding > $500K

Post by aristotelian »

To me that just underscores how their funds are overpriced. If you want an index fund for .05%, there is nothing stopping you from switching to Vanguard, Schwab, or Fidelity today. Actually at Fidelity you can get .00%. I used to own TRBCX and was please with it, but SCHG has performed just as well with a lower expense ratio. Appears TRBCX is just riding the coattails of the large growth category.
psteinx
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Re: TRowe's Summit Program for investors holding > $500K

Post by psteinx »

I agree with some of the other replies. The "500" fund is significantly overpriced before you're in this program, and slightly overpriced if/when you are in this program.

Switch to a different broker, and move to cheaper funds. These are IRAs, so there should be no tax consequence from moving from one fund to another, at least for standard equity funds.
Topic Author
RetiredCSProf
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Re: TRowe's Summit Program for investors holding > $500K

Post by RetiredCSProf »

My question was not whether I should abandon TRowe (after nearly 40 years of investing with them); it was whether it made sense for me to accelerate qualifying for TRowe's new Summit program to reduce management fees on my current TRowe holdings. Assuming my portfolio continues to grow, I will eventually qualify without changing anything.

TRowe's expense ratios are typically lower than Fido for actively-managed funds. TRowe Blue Chip Growth fund has a lower NER (without the discount from the Summit program) than similar, actively-managed funds offered at Fido -- Contrafund (FCNTX) has an NER of 0.86%, OvertheCounter fund (FOCPX) has an NER of 0.80%., and Fido Blue Chip Growth (FBGRX) has an NER of 0.79%.

My question was not whether I should trade out of all actively-managed funds. I agree that if I wanted to transition from a mix of active and passive funds into index funds only, then TRowe is not the best choice for this -- as this is not their strong suit. My risk tolerance has not changed.
000
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Re: TRowe's Summit Program for investors holding > $500K

Post by 000 »

If you like TRP then sure why not find a way to get there.

Why not move some of the Fido IRA too?

I definitely would not increase stock risk solely for the purpose of trying to get to that threshold.
Last edited by 000 on Thu Oct 28, 2021 7:13 pm, edited 1 time in total.
UpperNwGuy
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Re: TRowe's Summit Program for investors holding > $500K

Post by UpperNwGuy »

If you're committed to T Rowe Price, then you should do whatever it takes to optimize your experience there.
smectym
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Re: TRowe's Summit Program for investors holding > $500K

Post by smectym »

UpperNwGuy wrote: Thu Oct 28, 2021 7:06 pm If you're committed to T Rowe Price, then you should do whatever it takes to optimize your experience there.
Agree. Loyalty is a virtue. And if one is accustomed to the infrastructure and culture of a particular fund group or brokerage, nurtured over several decades, that’s a factor unto itself
cegibbs
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Re: TRowe's Summit Program for investors holding > $500K

Post by cegibbs »

If you are totally committed to keeping your assets at TRP, then why wouldn’t you want to take advantage of their new Summit program. But at your age, I would not make my portfolio more aggressive solely to reach the Summit $500K level. That seems foolhardy. Why not transfer your Fidelity Rollover to TRP? Keep in mind that the amount you will save on expenses for a $500K account are not that significant.
Last edited by cegibbs on Fri Oct 29, 2021 11:14 am, edited 3 times in total.
wetgear
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Re: TRowe's Summit Program for investors holding > $500K

Post by wetgear »

RetiredCSProf wrote: Thu Oct 28, 2021 6:51 pm My question was not whether I should abandon TRowe (after nearly 40 years of investing with them); it was whether it made sense for me to accelerate qualifying for TRowe's new Summit program to reduce management fees on my current TRowe holdings. Assuming my portfolio continues to grow, I will eventually qualify without changing anything.

TRowe's expense ratios are typically lower than Fido for actively-managed funds. TRowe Blue Chip Growth fund has a lower NER (without the discount from the Summit program) than similar, actively-managed funds offered at Fido -- Contrafund (FCNTX) has an NER of 0.86%, OvertheCounter fund (FOCPX) has an NER of 0.80%., and Fido Blue Chip Growth (FBGRX) has an NER of 0.79%.

My question was not whether I should trade out of all actively-managed funds. I agree that if I wanted to transition from a mix of active and passive funds into index funds only, then TRowe is not the best choice for this -- as this is not their strong suit. My risk tolerance has not changed.
Seems like using the Summit program is making the best of a bad situation then.
mr_brightside
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Re: TRowe's Summit Program for investors holding > $500K

Post by mr_brightside »

UpperNwGuy wrote: Thu Oct 28, 2021 7:06 pm If you're committed to T Rowe Price, then you should do whatever it takes to optimize your experience there.
i agree. we have 529 money there and have been happy with their services.

i am intrigued by this new Summit offering (got the email a couple days ago)

granted they are more geared to active management -- but they do have a low cost SP 500 fund if that is an absolute requirement for anyone

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Doctor Rhythm
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Re: TRowe's Summit Program for investors holding > $500K

Post by Doctor Rhythm »

If you’re getting around 0.1% reduction in ER’s, that’s a $500 benefit per year on the minimum balance, so not trivial but not exciting either. Sort of like one average day’s market gain/loss on that balance or what you’d get as a signup bonus for a checking account.

You would have to factor in that the higher ER on any money moved into TRP from your other accounts would cut into your net return, but if you’re close to the $500K target, then it may not matter much.
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RetiredCSProf
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Re: TRowe's Summit Program for investors holding > $500K

Post by RetiredCSProf »

Doctor Rhythm wrote: Fri Oct 29, 2021 3:40 pm If you’re getting around 0.1% reduction in ER’s, that’s a $500 benefit per year on the minimum balance, so not trivial but not exciting either. Sort of like one average day’s market gain/loss on that balance or what you’d get as a signup bonus for a checking account.

You would have to factor in that the higher ER on any money moved into TRP from your other accounts would cut into your net return, but if you’re close to the $500K target, then it may not matter much.
Fidelity is offering me a one-time bonus incentive to consolidate my TRowe funds into my Fido brokerage retirement accounts. Most of my TRowe funds can be transferred in-kind with no transaction fee. The others will need to be liquidated on the transfer. No tax impact -- as these are all tax-favored.

My question is how to calculate the value of the lower cost I-class shares at TRowe, if I stay with TRowe and qualify for the Summit program. Do I simply multiply the reduction in the NER (for each fund) by the dollar value that I have invested? I am recovering from side effects of Covid booster, so my head is a bit fuzzy.
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RetiredCSProf
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Talk me out of consolidating TRowe into Fido IRA

Post by RetiredCSProf »

[Thread merged into here --admin LadyGeek]

TRowe recently offered me an incentive to continue to hold IRAs with them and to move more investments under them.

Fido countered with a one-time bonus offer for me to stay with Fido and move my TRowe IRAs to Fido; most of the mutual funds I hold at TRowe can be moved in-kind to my Fido brokerage account as NTF.

I have no compelling reason for consolidating, and I am uncertain about putting "all my eggs in one basket."

Advantages of staying with TRowe:
- I qualify as a "Select Services Member" with a free M* premium subscription (value of $199 annual), TurboTax discount, access to TRowe closed funds, and phone access to investment specialists
- If I increase my funds to $500K, I will qualify for their Summit program, which would allow access to their lower-cost (NER) I-class shares; based on my current allocation of funds, that would save me about $570 in annual management fees
- I like the funds I have available at TRowe
- I am in mutual fund accounts at TRowe and can choose to convert to Roth either in $ amounts or in share amounts

Advantages of transferring from TRowe into Fido:
- One-time bonus
- Access to lower-cost index funds; however, the difference is marginal if I qualify for TRowe's Summit program

Annoyance Factors at TRowe:
- I can make Roth conversions by phone only because their software prohibits clients of "RMD age" to Roth-convert online
- I withdraw RMDs by phone because their software prohibits clients from adjusting the %age to be withheld for state taxes; to withhold 9% for state taxes I need to withhold 90% for federal taxes
Makefile
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Re: Talk me out of consolidating TRowe into Fido IRA

Post by Makefile »

In his last book, Stay the Course, this is what John Bogle had to say about T. Rowe Price:
T. Rowe Price. This is a firm that I've always admired--right up there with Dodge and Cox and Dimensional Fund Advisers--for professional conduct, low-key marketing (or none), and good people. When my one-time assistant, then-executive vice president of Vanguard, James S. (Jim) Riepe, left Vanguard for T. Rowe Price in 1980, I was crestfallen at the loss of my heir-apparent. But I was confident he had found the perfect home. (I was right!)
Both are reputable. The Summit program came after a cut to expense ratios on its index funds that TRP already made this summer. Not sure if that means there could be more to come. Their index funds are quite small in contrast to Vanguard/Fidelity/Schwab and so they may not have as much scale to cut ERs.

As you pointed out, TRP still offers "mutual fund accounts", so you can automatically redirect dividends between funds, if that is a feature you use.
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Re: TRowe's Summit Program for investors holding > $500K

Post by LadyGeek »

RetiredCSProf - In order to provide appropriate advice, it's best to keep all the information in one spot. I merged your update back into the original thread. If you have any questions, ask them here.

(Thanks to the member who reported the post and provided a link to this thread.)
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Taylor Larimore
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Re: Talk me out of consolidating TRowe into Fido IRA

Post by Taylor Larimore »

RetiredCSProf wrote: Sun Dec 05, 2021 6:11 pm TRowe recently offered me an incentive to continue to hold IRAs with them and to move more investments under them.

Fido countered with a one-time bonus offer for me to stay with Fido and move my TRowe IRAs to Fido; most of the mutual funds I hold at TRowe can be moved in-kind to my Fido brokerage account as NTF.

I have no compelling reason for consolidating, and I am uncertain about putting "all my eggs in one basket."

Advantages of staying with TRowe:
- I qualify as a "Select Services Member" with a free M* premium subscription (value of $199 annual), TurboTax discount, access to TRowe closed funds, and phone access to investment specialists
- If I increase my funds to $500K, I will qualify for their Summit program, which would allow access to their lower-cost (NER) I-class shares; based on my current allocation of funds, that would save me about $570 in annual management fees
- I like the funds I have available at TRowe
- I am in mutual fund accounts at TRowe and can choose to convert to Roth either in $ amounts or in share amounts

Advantages of transferring from TRowe into Fido:
- One-time bonus
- Access to lower-cost index funds; however, the difference is marginal if I qualify for TRowe's Summit program

Annoyance Factors at TRowe:
- I can make Roth conversions by phone only because their software prohibits clients of "RMD age" to Roth-convert online
- I withdraw RMDs by phone because their software prohibits clients from adjusting the %age to be withheld for state taxes; to withhold 9% for state taxes I need to withhold 90% for federal taxes
Retired CSFProf:

In my opinion, holding all your funds in ONE good company like TRowe or Fidelity is much more important than a few dollars saved in taxes or fund expenses which cannot be accurately foreseen:

1. One familiar statement.
2. Less paperwork.
3. Easier tax preparation.
4. Avoidance of low-balance and other small fees.
5. It's much easier to learn only one company's policies, fees, regulations, etc.
6. With larger holdings it may be possible to qualify for lower costs and premium services (Voyager, Admiral, Flagship).
7. Rebalancing and exchanges are easier.
8. Eliminates 3rd party brokerage.
9. A loyal customer is appreciated and usually treated better.
10. Less chance of errors.
11. More free time for ourselves.
12. In event of death or disability, it will be much easier for others.

All of our funds have been with Vanguard for over 30 years and I am very pleased. I have no experience with T Rowe Price or Fidelity.

Best wishes
Taylor
Jack Bogle's Words of Wisdom: "Never underrate either the majesty of simplicity or its proven effectiveness as a long-term strategy for productive investing."
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nedsaid
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Re: Talk me out of consolidating TRowe into Fido IRA

Post by nedsaid »

Makefile wrote: Sun Dec 05, 2021 6:32 pm In his last book, Stay the Course, this is what John Bogle had to say about T. Rowe Price:
T. Rowe Price. This is a firm that I've always admired--right up there with Dodge and Cox and Dimensional Fund Advisers--for professional conduct, low-key marketing (or none), and good people. When my one-time assistant, then-executive vice president of Vanguard, James S. (Jim) Riepe, left Vanguard for T. Rowe Price in 1980, I was crestfallen at the loss of my heir-apparent. But I was confident he had found the perfect home. (I was right!)
Both are reputable. The Summit program came after a cut to expense ratios on its index funds that TRP already made this summer. Not sure if that means there could be more to come. Their index funds are quite small in contrast to Vanguard/Fidelity/Schwab and so they may not have as much scale to cut ERs.

As you pointed out, TRP still offers "mutual fund accounts", so you can automatically redirect dividends between funds, if that is a feature you use.
This is good to know, I have admired T Rowe Price for many years though I have never invested with them. Their Target Date Retirement Funds have been highly rated for many years by Morningstar despite the higher fees and active management. Their Advisory service sounds good, all-in costs including portfolio management range from about 40 to about 60 basis points, which is getting to be competitive with Vanguard's Personal Advisor Service. Fidelity has an Advisory service that runs 50 basis points which is also very competitive.

I would not hesitate to send even a Boglehead to T Rowe Price, I think that highly of them. Like Bogle, I admire DFA and Dodge and Cox but I would add American Funds to that list. There are good guys in the investment biz.
A fool and his money are good for business.
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Re: Talk me out of consolidating TRowe into Fido IRA

Post by Makefile »

nedsaid wrote: Sun Dec 05, 2021 6:57 pm I would not hesitate to send even a Boglehead to T Rowe Price, I think that highly of them. Like Bogle, I admire DFA and Dodge and Cox but I would add American Funds to that list. There are good guys in the investment biz.
I suspect American Funds was not mentioned because those are load funds. The book does describe though that prior to the Ivest-Wellington merger, Bogle made a proposal to American Funds which was not accepted.

Bogle had bad blood with Fidelity because some Fidelity employees who were also Vanguard shareholders tried to block Vanguard from building its new headquarters in 1993 (I believe the client-ownership thing actually led to a proxy vote by the fund shareholders in that instance due to how the financing was to be set up). That is also described in the book.
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nedsaid
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Re: Talk me out of consolidating TRowe into Fido IRA

Post by nedsaid »

Makefile wrote: Sun Dec 05, 2021 7:04 pm
nedsaid wrote: Sun Dec 05, 2021 6:57 pm I would not hesitate to send even a Boglehead to T Rowe Price, I think that highly of them. Like Bogle, I admire DFA and Dodge and Cox but I would add American Funds to that list. There are good guys in the investment biz.
I suspect American Funds was not mentioned because those are load funds. The book does describe though that prior to the Ivest-Wellington merger, Bogle made a proposal to American Funds which was not accepted.

Bogle had bad blood with Fidelity because some Fidelity employees who were also Vanguard shareholders tried to block Vanguard from building its new headquarters in 1993 (I believe the client-ownership thing actually led to a proxy vote by the fund shareholders in that instance due to how the financing was to be set up). That is also described in the book.
Very interesting. This was inside baseball that I wasn't aware of. As far as Fidelity, I have high regard for them, I have had accounts with them since 1984. I started a money market account there and a stock mutual fund at 20th Century at the same time. I wonder what could have been, I probably should have started at T Rowe Price rather than 20th Century but 20th Century had no investment minimums at the time. In 1984, I didn't have a lot of money.

The point is, there are good choices for no-load investors to invest: Vanguard, Fidelity, and T. Rowe Price. Dodge and Cox is more of a boutique firm. Dimensional Funds and American Funds require Advisors in order to access.

Larry Swedroe spoke highly of Vanguard, T Rowe Price, and American Funds in his articles and comments.
A fool and his money are good for business.
Makefile
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Re: Talk me out of consolidating TRowe into Fido IRA

Post by Makefile »

nedsaid wrote: Sun Dec 05, 2021 7:17 pm Very interesting. This was inside baseball that I wasn't aware of. As far as Fidelity, I have high regard for them, I have had accounts with them since 1984. I started a money market account there and a stock mutual fund at 20th Century at the same time. I wonder what could have been, I probably should have started at T Rowe Price rather than 20th Century but 20th Century had no investment minimums at the time. In 1984, I didn't have a lot of money.
Guess I'm lucky that I started investing seriously in 2013 in a T. Rowe Price 401(k), followed by Vanguard IRA and taxable. And to have access to better information up-front. I'm just old enough to have still had the school lessons of looking up stock prices in the (paper) Wall Street Journal. You can only imagine how much worse someone in the 1950s had it trying to evaluate whether a whole life policy was a good deal (vs. paying commissions/loads/etc. on stocks or funds)
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nedsaid
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Re: Talk me out of consolidating TRowe into Fido IRA

Post by nedsaid »

Makefile wrote: Sun Dec 05, 2021 7:24 pm
nedsaid wrote: Sun Dec 05, 2021 7:17 pm Very interesting. This was inside baseball that I wasn't aware of. As far as Fidelity, I have high regard for them, I have had accounts with them since 1984. I started a money market account there and a stock mutual fund at 20th Century at the same time. I wonder what could have been, I probably should have started at T Rowe Price rather than 20th Century but 20th Century had no investment minimums at the time. In 1984, I didn't have a lot of money.
Guess I'm lucky that I started investing seriously in 2013 in a T. Rowe Price 401(k), followed by Vanguard IRA and taxable. And to have access to better information up-front. I'm just old enough to have still had the school lessons of looking up stock prices in the (paper) Wall Street Journal. You can only imagine how much worse someone in the 1950s had it trying to evaluate whether a whole life policy was a good deal (vs. paying commissions/loads/etc. on stocks or funds)
We have it so good, we just don't know it. We can invest monies at institutional rates, trade stocks and ETFs with zero commission, we have thousands and thousands of investment choices. Indeed, it is an embarrassment of riches. There is also the access to information, much of it free. We have nothing to complain about.
A fool and his money are good for business.
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Re: TRowe's Summit Program for investors holding > $500K

Post by Tony-S »

I opened my IRA at T Rowe Price about 25 years ago with the New Horizons fund. It’s treated me VERY well. I now have several of their funds in my IRA portfolio and when I retire in a few years I will roll over my Fidelity 401a and 403b funds to T Rowe.
TheDDC
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Re: TRowe's Summit Program for investors holding > $500K

Post by TheDDC »

Very simple: Do TRP funds outperform VTSAX (with ER factored in)? Do they have a proven track record of outperformance? If yes to both, then there you have your answer.

-TheDDC
Rules to wealth building: 75-80% VTSAX piled high and deep, 20-25% VTIAX, 0% given away to banks.
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RetiredCSProf
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Re: TRowe's Summit Program for investors holding > $500K

Post by RetiredCSProf »

TheDDC wrote: Mon Dec 06, 2021 10:43 pm Very simple: Do TRP funds outperform VTSAX (with ER factored in)? Do they have a proven track record of outperformance? If yes to both, then there you have your answer.

-TheDDC
I just looked up VTSAX = "Total Stock Market Index Admiral Shares" -- nearly all US equities. At Fido, I hold FXAIX, which is a similar S&P 500 index fund. FXAIX has slightly outperformed VTSAX, with a lower NER. VTSAX is offered only as a "load fund" at Fido, where I would pay $75 for each transaction. TRowe also offers a similar index fund.
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RetiredCSProf
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Re: Talk me out of consolidating TRowe into Fido IRA

Post by RetiredCSProf »

Makefile wrote: Sun Dec 05, 2021 7:24 pm ...

Guess I'm lucky that I started investing seriously in 2013 in a T. Rowe Price 401(k), followed by Vanguard IRA and taxable. And to have access to better information up-front. I'm just old enough to have still had the school lessons of looking up stock prices in the (paper) Wall Street Journal. You can only imagine how much worse someone in the 1950s had it trying to evaluate whether a whole life policy was a good deal (vs. paying commissions/loads/etc. on stocks or funds)
I was in high school when I started investing (individual stocks). I remember looking up stock prices in the WSJ and having to look at two different pages -- one for the NYSE, and one for the American stock exchange. Sort of like my having my funds in more than one fund family.
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RetiredCSProf
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Re: Talk me out of consolidating TRowe into Fido IRA

Post by RetiredCSProf »

Taylor Larimore wrote: Sun Dec 05, 2021 6:44 pm
Retired CSFProf:

In my opinion, holding all your funds in ONE good company like TRowe or Fidelity is much more important than a few dollars saved in taxes or fund expenses which cannot be accurately foreseen:

1. One familiar statement.
2. Less paperwork.
3. Easier tax preparation.
4. Avoidance of low-balance and other small fees.
5. It's much easier to learn only one company's policies, fees, regulations, etc.
6. With larger holdings it may be possible to qualify for lower costs and premium services (Voyager, Admiral, Flagship).
7. Rebalancing and exchanges are easier.
8. Eliminates 3rd party brokerage.
9. A loyal customer is appreciated and usually treated better.
10. Less chance of errors.
11. More free time for ourselves.
12. In event of death or disability, it will be much easier for others.

All of our funds have been with Vanguard for over 30 years and I am very pleased. I have no experience with T Rowe Price or Fidelity.

Best wishes
Taylor
Jack Bogle's Words of Wisdom: "Never underrate either the majesty of simplicity or its proven effectiveness as a long-term strategy for productive investing."
Taylor, thank you for your post. It has helped me realize that I was distracted by the respective sales pitches, when the question is whether transferring my TRowe funds under the Fido roof will make my investment life simpler. About 60% of my retirement portfolio is with Fido; however, 60% of my pre-tax IRA is with TRowe, as I started Roth conversions at Fido several years before starting conversions at TRowe.

I have been invested with both Fido and TRowe for several decades, so items #1, #5, #8, #9 are not an issue.

Item #2, #3: paperwork and tax prep: Turbo tax can import from both Fido and TRowe; not an issue
Item #4: no minimums at Fido for Fido funds; $1K minimum at TRowe for TRowe IRA funds; $2500 minimum for TRowe funds at Fido -- conclusion on this item is that there is an advantage to keeping TRowe IRA funds at TRowe
Item #6: this was the motivator for my considering a change -- wanting to increase funds at TRowe to qualify for the Summit program; no equivalent motivator at Fido, except for their Wealth Management program (requires $2M minimum and not self-directed) -- conclusion, stay at TRowe and aim for the Summit program
Item #12: My heirs can do what they want with their inheritance -- with current laws, my son will need to deplete the IRA accounts within ten years of his inheritance; I am making life easier for my heirs with Roth conversions and annual gifts. In the event of my disability, the important part is to keep up with the RMDs, and those can be combined between accounts.

Items #7, #10, and #11 -- rebalancing, exchanges, avoidance of errors, and more free time. I think these items are the central issue. Most of my rebalancing and exchanges is associated with withdrawals from the pre-tax IRAs for RMDs and Roth conversions. My Fido rollover IRA is half-way toward a "BH-approved" portfolio; whereas, my TRowe rollover IRA is a well-balanced "slice and dice" portfolio.

I started looking at what it would involve to transfer my TRowe funds to Fido "in kind," especially for my rollover IRA. I would end up with many pairs of "duplicate" funds that I would be tempted to combine. This would be a lot of work, initially, but may lead to simplicity, later. Some funds are nearly identical; e.g., U.S. Treas Intermediate Index (PRTIX) at TRowe looks a lot like Intermediate Treasury Bond Index (FUAMX) at Fido. In this case, Fido's FUAMX is the "winner." I am in the "red" on both funds -- I may be better off moving both to money market. After that, the comparisons get more complicated. Funds with identical names have completely different holdings -- it has been making my head spin. I may be more likely to make an error in exchanging different funds with the same name.

I am leaning toward keeping TRowe separate from Fido, but to put more effort into streamlining my rollover IRA at TRowe.
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Taylor Larimore
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Re: TRowe's Summit Program for investors holding > $500K

Post by Taylor Larimore »

RetiredCSProf:

I apreciate your lengthy reply.

Taylor
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mkc
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Re: TRowe's Summit Program for investors holding > $500K

Post by mkc »

For those who qualify, has anyone seen an automatic conversion to I-class shares of their TRP mutual funds or an offer to do so yet?

The e-mail back in October from TRP implied we would be offered the option to do this, but have not yet seen it for our qualifying holdings.
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RetiredCSProf
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Re: TRowe's Summit Program for investors holding > $500K

Post by RetiredCSProf »

I was surprised to find an extra "perk" in my qualifying for the TRP Select Services tier ($250K to $500K invested). I now have access to purchase any closed funds that I did not previously hold. The closed funds popped up as an option when I was exchanging funds.
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RetiredCSProf
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Re: TRowe's Summit Program for investors holding > $500K

Post by RetiredCSProf »

I am inclined to stay with TRowe, at least until I finish Roth conversions there. I have a mutual fund account at TRowe (altho they offer brokerage accts) and a brokerage account at Fido.

- At TRowe, I can convert mutual funds in dollars or shares; I can exchange funds on the conversion (shares need not be converted in-kind); I can withhold taxes on the conversion; and shares are converted at the next available closing price

- At Fido, I can convert mutual funds in shares only (not in dollars); shares must be converted in-kind; I can withhold taxes on a conversion of the MM shares only; and mutual funds can be converted in after-hours at the closing price for the day

Also, exchanging funds between two different fund families at Fido is a two-day process. For example, if I place an order during the market day on Monday to exchange from TRowe Blue Chip Growth into the Fidelity S&P 500 Index fund (FXAIX), then the TRowe shares are sold at Monday's closing price, and the settlement amount is used to purchase shares of FXAIX at Tuesday's closing price (assuming the market is open on both Monday and Tuesday). The workaround is to keep enough dry powder in the sweep account to fund the purchase using Monday's closing price.

The 2-day exchange would complicate the combined process of consolidating TRowe under the Fido roof and then rearranging the portfolio.
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Tony-S
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Re: TRowe's Summit Program for investors holding > $500K

Post by Tony-S »

mkc wrote: Wed Dec 08, 2021 8:28 pm For those who qualify, has anyone seen an automatic conversion to I-class shares of their TRP mutual funds or an offer to do so yet?

The e-mail back in October from TRP implied we would be offered the option to do this, but have not yet seen it for our qualifying holdings.
When I called them a couple of weeks ago I was told it would be automatically be done in January. I’m impatient so I converted my funds on my own. It was a bit tricky because I could not move between the same funds.
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