.....And the lovely and bigly fabulous Powers That Be at the Bruce Fund will not allow a transfer-in-kind. These are T-IRA shares. I just got the word from Schwab by email.
Without even getting an answer as to WHY the lovely BRUFX doinks will not let this happen, it's clear that what they want us to do is to SELL X number (ALL!) shares and receive a check, then we'll have to put that check ourselves into the new T-IRA Schwab account. We had to deal with this nonsense before with MassMutual. I understand that we'll have 60 days to get the money BACK into a different T-IRA account. Bruce bites it all.
Simplest thing in the world, but the rules allow the fund companies to make it complicated. Gigantic piles of stinky dooky.
The plan had been---very simply--- to move the Bruce shares to Schwab, then exchange them into WBALX.
Comments
Many mutual funds refuse to pay and they attract fewer $. T. Rowe Price used to be on Transaction-fee only at Fidelity and Vanguard. Now they are on their competitor’s no-transaction fee platforms.
Yes, I see that Schwab and TRP have some sort of affiliation. Dunno how old the arrangement is. And thanks for your explanation.
The fees and restrictions are different for each platform, but are expensive. Small funds have to start somewhere so they usually pick the place that charges them the least. As AUM grows they are probably more attractive to the platforms that previously didn't want them, and eventually show up.
Life has gotten much easier since our consideration, especially in tax return filing.
I moved 75% of my BRUFX holdings (Bruce converted shares to cash) then Fidelity executed a “trustee to trustee transfer” to Fidelity back in 2021.
This was a HSA account at Bruce and I decided to move the majority of my HSA to Fidelity’s new HSA platform.
I would explore a “Trustee to Trustee transfer” with both Bruce and the investment firm you are transferring to.
Going to cash first at Bruce Fund is just a how transfers are done at Bruce since they are not listed on other platforms.
I left a 25% allocation at Bruce knowing full well that if I moved 100% of my position the fund would have quadrupled the day after I transferred all shares.
This fund’s long term results are stellar, but the short term - mid term performance test your patience.
I support Bruce Fund’s spirited independence from the big boys, but I see the value Fidelity’s platform.
See pub 590a, p. 22. (Pub 590a for tax year 2022.)
A direct fund-to-fund transfer of proceeds from sale of shares is better.
"A trustee-to-trustee transfer is a transfer of assets from one retirement plan or account to another, facilitated by the two financial institutions involved in the transfer. It is the simplest way to transfer an IRA from one institution to another and does not trigger taxes. The transfer can be initiated by opening an IRA account at the new institution and contacting the original and new IRA providers to initiate the transfer."
Is this not the very thing that CAN'T be done, because going to cash is necessary with the Bruce shares?
I have learned that Bruce refuses the simple, streamlined sort of transfer. The Bruce stuff is wife's T-IRA and we'll be moving it into a different T-IRA, under the Schwab umbrella. That will be all the movement for 2024.
Schwab is supposed to transfer over the $$$ in the TRP brokerage account too, but I don't see yet that it's been transferred. But that's a different kettle of fish, anyhow.
More generally, Schwab has created a second, cheaper platform (12-19 basis point fee vs. 40 basis points for OneSource) called INTF that 18 families including TRP participate in.
https://advisorservices.schwab.com/institutional-no-transaction-fee
The actual fee that TRP paid in 2022 (partial year) to Schwab was $5.9M. This was in addition to the usual platform fees paid to Schwab for shelf space. What TRP gets from Schwab is promotion of "actively managed T. Rowe Price mutual funds and ETFs to Schwab's clients and the clients of Registered Investment Advisors that custody assets at Schwab, and ... additional mutual fund and ETF marketing support". Schwab acknowledges the arrangement creates a conflict of interest (it benefits from pushing TRP funds).
https://www.schwab.com/legal/financial-and-other-relationships#panel--text-44781 Unless a fund family is so popular that a brokerage finds value in offering the funds without charging a platform fee. Vanguard, D&C, Fidelity. The rule is actually pretty simple now. With the exception of Roth conversions, the one rollover a year limit is for all IRAs combined, regardless of form. Roth conversions are unlimited. Pub 590a, p. 24
VPMCX prospectus
Does Vanguard prohibit transfer of shares into existing accounts outside of Vanguard?
FWIW, Vanguard refused to transfer shares I had of a closed fund (T-IRA) into another account at Vanguard (Roth IRA). Vanguard relented only when I pointed out that the transfer was to an existing Roth account - I would not be opening a new account.
I have had a similar problem with shares of a fund in what became part of Legg Mason, and finally Franklin Templeton. Until FT took over, the fund family would only let me transfer shares if I satisfied the new account requirement at the receiving brokerage.
Since these were institutional class shares, that meant I had to have $1M worth (or more).
The restriction in both cases (Vanguard and Legg Mason) was essentially the same, and simple. Transferring shares to a new brokerage means opening a new account. You must meet the new account requirements - you don't get a pass just because you own shares in another account.
It's not a question of custody.
even though there was more than sufficient liquidity to initiate (e.g., money market funds), there was no sequence in which all custody could be transferred intact (no fund changes, no tax impact) to fidelity.
after the vanguard consolidation effort, there was also no interest in splitting holdings. so nothing moved.
(But why must people--- like me--- find this stuff out through the BACK-door????? ) Ork!
Is "your guy" just investigating, or has he confirmed with the Bruce Fund that they will allow you to create a new account (via transfer of shares) at Schwab?
If he has actually confirmed that the Bruce Fund will facilitate a direct transfer of shares to Schwab, that would seem to call into question the premise of this thread:
.....And the lovely and bigly fabulous Powers That Be at the Bruce Fund will not allow a transfer-in-kind. These are T-IRA shares. I just got the word from Schwab by email.
Given that Schwab originally told you that it could not get the BRUFX shares transferred directly and now "your guy" there says that Schwab may be able do a direct transfer, then perhaps the problem is not with the Bruce Fund but with Schwab?
Maybe the first contact didn't research this deeply enough. Or perhaps they did and this second investigation will reach the same conclusion. I'm sure you'll let us know how things turn out either way. Hoping for the best.
Notwithstanding this "new" prospect, it just feels like such a simple transfer need not be so convoluted, no matter how it happens. If receiving a paper check can be obviated, then, .... OK. There ought to be a rule or regulation somewhere which would leave no doubts, requiring Fund A to simply, easily transfer the account to Fund B. Someone WANTS to make this difficult. And the congregation responded: "Amen."