Transitioning My Solo 401k from Vanguard to Fidelity

Recently, Vanguard announced the end of their solo 401k program, which left me with a decision to make about my solo 401k account. Should I just close it? Transfer the money to my IRA? After some research and consideration, I decided to transfer my solo 401k account to Fidelity. Here’s a detailed account of my experience during this transition.

Fun fact: Fidelity calls their solo 401k a “Self Employed 401k”. Other places might call it an “Individual 401l” or an “i401k”. They’re all the same thing.

Why Fidelity?

I already have accounts with Fidelity - an old employer’s 401k and an old HSA. Fidelity is also as highly ranked as Vanguard - in fact, it’s considered one of Clark Howard’s “favorite children”.

So moving my account to Fidelity seemed the logical thing to do.

Creating the Fidelity Account

On Wednesday, May 8, I filled out the necessary form to open a solo 401k account at Fidelity. I didn’t receive a response, so I tried again on Monday, May 13. I never received a response for the second form, either.

I was about to fill out the form for a third time when I decided to login to my Fidelity account and take a look. It turns out that both forms were processed - I mistakenly created two accounts with Fidelity. After realizing the error, I called Fidelity’s customer service and had the newer account closed.

The Transfer of Assets (TOA) Form

The Transfer of Assets (TOA) form is used to moving funds between institutions. In my case, from Vanguard to Fidelity.

Since I was moving money into Fidelity, I started at Fidelity’s Transfer of Assets page. But Fidelity doesn’t have the option to do a TOA online from a 401k - solo or otherwise. This led me to the How to move your old 401(k) into a rollover IRA page.

But while that page let me transfer assets from a 401k, it didn’t give me the option to roll the money into my Fidelity solo 401k.

Eventually I found a TOA form on Fidelity’s website that was a PDF. Something I could fill out, print, sign, and mail. So I manually filled out and mailed this PDF version of the form.

I mailed this form out on May 22, 2024.

Tracking the Transfer

Fidelity’s TOA tracker indicated that the transfer process started on Friday, May 24, 2024, and was expected to complete by June 4, 2024. However, on June 5, 2024, the tracker updated, stating that the transfer would finish by June 21, 2024.

Finally, on June 11, I received an email confirming the completion of the transfer:

Transfer of Assets Request Completed

For account ending in XXXX:

Congratulations. Your transfer of assets is complete.

It may take up to 15 days for your firm to provide cost basis information. We will update your account when we receive this information. If cost basis information is not provided by your firm, or if your firm identified any assets as non-covered, you can provide this information on the Positions/Cost Basis page within your Portfolio Summary.

To get started with Fidelity’s robust online capabilities, you can manage your account and place trades online. Choose from a wide range of investment options, such as stocks, bonds, and thousands of Fidelity and non-Fidelity mutual funds.

Verifying the Transfer

Once the transfer was confirmed, I checked my Vanguard account and saw a zero balance in my solo 401k. Then, I checked my Fidelity account and saw that the funds had been successfully transferred. To ensure everything was working correctly, I made a test deposit of $50, which was successful.

VSTAX to FSKAX

The funds in my Vanguard account were Vanguard funds - namely VSTAX - Vanguard Total Stock Market Index Fund. They were also deposited into my account as VSTAX.

Trading non-Fidelity funds in a Fidelity account is not free. Trading Fidelity funds in a Fidelity account IS free.

First, I wanted to trade VSTAX for the equivalent Fidelity Zero fund - namely, FZROX - Fidelity Zero Total Market Index Fund. But when I tried to trade for these funds, I got an error: “This fund is closed to new investors.”

Odd, FZROX is not closed. Not one little bit. It turns out it’s just not available in tax-advantaged accounts. Or at least not in a solo 401k.

Instead I traded for the next best thing - FSKAX - Fidelity Total Market Index Fund.

Reflections and Resources

Overall, the transfer process was a bit more complicated and frustrating than I anticipated. And while my solo 401k is small, especially compared to my other accounts, moving the funds was quite nerve-racking.

If you’re considering a similar move, here are some resources that might help you:

• Fidelity Self-employed 401(k) page
• Bogleheads Forum Discussion: Vanguard to Exit Individual 401(k), Multi-SEP, and SIMPLE IRA Plans With Ascensus Deal
• Reddit Discussion: Solo 401k move from Vanguard at /r/fidelityinvestments
• Discussion on Financial Independence Reddit

And here’s my Initial Post on Opening a Vanguard Individual 401k.

If you’re going through a similar transition, patience and thoroughness are key. Make sure to double-check forms, track the process, and verify the final transfer to ensure your retirement savings are secure.