I’m breaking up with my bank, my credit cards, and my mutual fund company.
My reasons were influenced by three things.
- Many years back Roy and Pauline came to me for tax prep. Though not wealthy, they had about two dozen disparate investments in everything from amusement parks to oil wells. My first thought was that if Roy died first, Pauline was going to have a difficult time dealing with this veritable spaghetti bowl of K1s. He did die first, and she did struggle with all those investments.
- Shortly after I got hooked on HumbleDollar, one of the authors waxed eloquently about having all his stuff under one roof, with the ability to instantly view his entire financial world with the click of his mouse, (I’m paraphrasing, don’t yell at me Quinn). And
- Jonathan’s realization that his financial affairs were not as simple and organized as he thought they were.
I was considering either Vanguard or Fidelity as my future home, leaning towards the latter. I googled for a comparison of the two, and came across a YouTube video made by two sisters that call themselves the Wealth Twins, which solidified my decision to use Fidelity. The Twins have quite an inspiring story to tell and I encourage you to check them out at https://wealthpack.wealthtwins.com/about-page.
I opened my new account yesterday, and I have a lot of work ahead of me.
- Nine bill pay accounts at my current bank that will have to be moved. These are billers that I pay manually from checking.
- Ten vendors, such as Netflix, charities, cell phone and internet providers that bill my current credit card. Each one will need to be contacted when I receive my Fidelity credit card. Perhaps now would be a good time to consider using Qualified Charitable Distributions from my IRA.
- Six monthly direct deposits from Social Security, IRA’s, and pensions. Each one will need to be contacted.
- Six billers, such as utilities and insurance companies that dip into our checking accounts monthly will need the new information as well.
- Two of three bank accounts will be closed, I’ll keep a local credit union account for convenience, and will link it to Fidelity. Several seldom used credit cards accounts can be eliminated as well.
At Fidelity my cash will earn 4% interest versus about .1% at my old bank, and I can pay my bills directly from there. I can easily deploy excess cash into the Fidelity brokerage account.
I liken this project to living in the same home for a long time. My basement was a bit like a museum or maybe a time capsule; (what is this device with cords and a dial with numbers and letters and a handle thingy attached with a tangled up wire?) A lifetime of financial junk accumulates in a similar fashion. I don’t want my survivors to curse me for leaving all this junk to them.
I recently updated wills, POAs, and beneficiaries on all accounts and our house. What else is there? If you have taken steps to simplify, I’d be interested in your process.
Thanks for writing on this topic! Very timely as I need to verify the beneficiaries on our accounts and update our trust for some land we purchased.
We use 3 companies: current bank (checking/bills), Marcus (CDs), and Fidelity (investments). Marcus Goldman Sachs pays 3.9% on savings, 4.15% on 13 month No-Penalty CD, 4.5% on 14 month CD or 4.25% on 12 month CD or 4.3% on 9 month CD. (FDIC and interest compounds daily).
I use Fidelity’s Retirement Planning Analysis tool. Recommend it for the geeks that enjoy these kind of tools.
Dan – We recently followed Jonathan’s and Charlie Warner’s lead and documented likely estate outcomes with our two kids (beneficiaries). Our children had already been advised where the account information, passwords and wills were located. However, they are still young (under age 35) and never focused on the inheritance ramifications of each of the asset buckets (step-up basis for our limited taxable appreciated assets, 10-years of added income for tax-deferred accounts, and 10-years of tax-free appreciation for Roths). Despite my wife having good longevity, this could help them in the both hit by a bus scenario.
There are many adults who resist having those conversations with their kids. I want mine to know everything, not just to make things easier after I croak, but also so they can step in and help if needed.
Interesting post and well done.
We also have the bulk of our assets at Fidelity. The next largest chunk is 401k, then a bit at Treasury Direct.
We’ll probably close the TD account in the next few years. Last year we closed high yield savings accounts at Ally and Capital One. We have a bank account I’ve had for 40+ years, and if we ever settle in one place, we might have a local bank account/relationship. That’s plenty.
We like the Fidelity credit card and at first we used it for just about everything. These days though, we use it very little. We have some bills paid through it automatically, and changing this would be a hassle. So, we avoid using it anywhere else to reduce the chances of it being compromised.
Except for cash withdrawals from our bank account, basically all our bills/expenses are paid from our Fidelity cash management account. The CM account offers a debit card but we don’t use it, again limiting exposure to avoid a compromised account and hassle of changing.
We have two other cards that are our primaries, and another we’ve had for many years through the bank I mentioned. We almost never use this but keep it open.