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by matwood 3351 days ago
> This is true any time you move brokerages, is it not?

No. If you own the assets directly, and they are traded on the exchange (like the ETFs WF/Betterment use) they can be transferred around without triggering a sale event. Target date funds and the like would probably have to be sold.

I have my tax advantage at VG and my taxable has been all over the place finally settling with CS for now.
1 comments
grzm 3351 days ago
Okay, you have me a little confused now :) I read my parent as saying that in order to move investments out of Wealthfront, you'll need to sell and pay capital gains. I read your comment saying this isn't necessarily the case. There seems to be some disagreement here. What am I misunderstanding? The ins and outs of investments and tax ramifications can sometimes seem very opaque to me, so I appreciate any education on this front.
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zeroer 3350 days ago
I stand corrected. I thought they had their own mutual funds that they charge an expense ratio on, but I took a closer look at their site and it looks like they put you in third-party mutual funds from e.g. Vanguard and iShares. Since this is the case, you can just do a transfer-in-kind to another brokerage if you want to leave, and this is not a taxable event. (Sorry for my mistake!)
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sf_rob 3350 days ago
Looking further, they don't support outgoing ACATS (what most brokerages do), but do support DTC which I'm not at all familiar with[1]. So hopefully you could do Betterment until the TLH stopped being worthwhile and do a direct security transfer to another brokerage.

Although Betterment offers fractional shares, which is confusing, not sure if they're actually ETNs representing fractional ownership of ETFs. I don't know how that works legally.

[1] http://support.bettermentforadvisors.com/customer/portal/art...

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matwood 3350 days ago
Which is why I said own the funds 'directly'. I'm not sure if WF/Betterment pool your money and then carve up % of funds or if you end up the actual owner. They may force you to liquidate to leave, which IMO is another strike against using them.

With regular brokerages you can move stocks/funds around with a transfer.

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