Should I move funds from large bank with high fees even though there will be high gains?

I am extremely dissatisfied with the high fees on my mutual fund investments at a large bank. The investments are easily moved. If I decide to move them, I'm left with about $110k with $29k in capital gains. The expense rates are between .6% and .7%. I hate to leave any of them at this bank. Should I leave them there until some point in the future when I need the money? Or should I sell them, eat the taxes and take advantage of lower fees somewhere else for the next ten to 20 years? 

Banking, Investing, Taxes
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January 2018

Good question, and there are some great answers on here already.  I would also suggest going to www.morningstar.com, type in the ticker in the Quote search bar, bring up the mutual fund, and click on the Expense tab.  This tab provides some great information that includes comparing the expense ratio to its peers, but also a couple of other important factors.  Check under the sales fees, and see if you have a deferred or redemption cost.  Some funds may have a lower internal cost, but charge you to sell positions.  Deferred costs go away after a period of time (often 90 days, but could be longer).  Redemption fees will likely be charged when you sell the fund.  Also look under the Other Fees/Expenses section.  There is a line item called 12b-1 Actual, and this refers to fees going back to your advisor.  It's a charge you don't see leave your account, but is paid as a commission trail out of your assets regardless.

I like the suggestion from a previous answer, where it was suggested you move the positions to a discount broker like Fidelity, Schwab or TD Ameritrade.  They should be able to transfer the positions in kind, which means you wouldn't have to sell the positions and realize the tax liability.  Then you can sell positions over time and spread out the impact to you.  While we place a great emphasis on fees, it is more important to know whether the objective of the portfolio matches your objective and your risk tolerance.  Some active managers can provide good value in helping control portfolio risk, but many U.S. equities are highly efficient already, and you will find limited value in active managers in domestic large cap or domestic mid cap funds.  Often you're better in an ETF, but beware some ETFs are expensive as well.  Look up their expense ratios in Morningstar as well.

Good luck to you!

January 2018
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