Why I'm leaving my robo advisor for Fidelity

So since 2018 when I entered the world of investing and really keeping my eye on my personal finance, I try to update my expenses and account balances spreadsheet. Since other bloggers have been talking about the market going down, I tried not to pay too much attention to my balances on my last update.

Then another colleague was talking about her balance that went down $40,000. So yesterday during a lull at work, I did a better job of modifying and updating a spreadsheet I'd started after the first downturn in the market I experienced. It tracks what I actually contributed vs the actual value of my investments. It's easier to understand the "loss" when I see how much of my money was actually invested vs some increased value compared to a decreased value.

After my first downturn, I found myself re-allocating my stock/bond ratio. I read that's not what you're supposed to. I eventually landed on an 80/20 split with my robo advisor and convinced myself to hold it there.

Throughout my periodic updates, I also noticed that my 401k seemed to outperform my robo-advisor. Mostly, when there were losses, the losses were greater with my robo advisor. I'd noticed the trend but wasn't quite sure what to do with it or what I could do with it. Mostly, since I was so new to investing I didn't trust myself.

Two years later, I'm still noticing the trend especially now that the account balances in my 401k and individual brokerage account are about the same.

As you can see, at nearly $60k in both, the robo advisor went down a lot more in recent months. So I'd just had it. I dug a little deeper and saw that my old 401k was wholly invested in a Fidelity Freedom 2045 fund. Since that seemed easy to replicate, I opened a brokerage account with Fidelity and stopped the auto-payments to my robo advisor. What made it a bit easier was my new employer has our 401k through Fidelity, so I just had to add the 2 new accounts as opposed to creating an entirely new profile with them.

The hard part
So I may not have posted this, but actually investing with an actual broker is hard for a novice like me. With the robo advisor, it was pretty easy to open the account. It's millennial friendly and much like opening a bank account. I pretty much just set up an auto-deposit from my bank and they do the rest. That was the initial draw to the platform, so I'll give them credit for that.

I opened a Vanguard account a couple weeks ago, and thought maybe it was just that site that was hard. Nope, investing with Fidelity is just as hard. What is difficult for me is you actually have to "buy" the fund. I don't know if I know what I'm doing. So I'm glad that my plan is just to stick with the Freedom Fund. So yes, I can transfer money from my bank account to Fidelity, but unless I actually trade or buy a fund, it just sits there. I just fear I could accidentally forget to actually invest it. I haven't found a way on either Fidelity or Vanguard to automatically invest money I transfer over from a bank.

Another hiccup is Fidelity is giving me an error message about automatically transferring funds from my bank to the Roth IRA. I have to do it manually any time I want to move money over. Help!

So again, I'm glad my first foray into individual investing was with a robo advisor or else the process might have intimidated me, but now that I at least know the destination, i.e. the Freedom Fund, I can maintain focus through the frustration.  The other thing I'm not sure about is that sometimes I see extra letters next to the Fund name. For example the Fidelity Freedom 2045 Fund sometimes is listed as Fidelity Freedom 2045 Fund K or 6 or something odd. I don't know if those are the same thing.

Also I looked up that same Fidelity Freedom 2045 Fund on Vanguard and the Vanguard website said it was not available to purchase. So I don't know if you can only purchase Vanguard Funds from Vanguard or what??

Lastly, I think my plan for now is to just to move my future contributions from robo-advisor to the Fidelity accounts. Once I get more comfortable and my balances with my robo-advisor shore up again, I might move them over.