All Vanguard or Vanguard AND Fidelity?

[misanman]

We have consolidated almost everything to Fidelity. Like the way their site is set up, the service, and the local office. I have no experience with Vanguard but I'm sure they are fine as well. Nice to have everything in one place as far as I am concerned.

 

[Tw90663]

We only use vanguard. It is low-cost, owned by fund holders, no hidden charges.

 

[rescueme]

...no hidden charges.

Such as?

 

[Tw90663]

Such as?

Large bid-ask spread, management fee, 102b fee, loads, high turn over creating higher transaction fee and taxes.

 

[youbet]

Large bid-ask spread, management fee, 102b fee, loads, high turn over creating higher transaction fee and taxes.

I don't understand the high turn over comment. We are talking about Vanguard as a financial institution, not about a paticular Vanguard fund. Are you saying that Vanguard's TSM fund has a meaningfully different turnover ratio than, say, Schwab's TSM fund? I don't think so......

 

[rescueme]

Large bid-ask spread, management fee, 102b fee, loads, high turn over creating higher transaction fee and taxes.

I don't think so.

Do an analysis of any fund/investment company via M* (assuming you are a Morningstar preimum member - which I am, BTW).

I don't think (other than the fund management/overhead expenses, which are shown) you will find total cost is not out of line vs. what is "advertised".

If you chose a fund/fund company based upon "advertised overhead", so be it. However if you allude to some "hidden fees", I'm not going to agree with you.

(Please return to the BH forum ; your "two minues of fame" <heck, I don't even allow 15 minutes> are up, here)...

 

[Tw90663]

Guess I'm commenting on in comparison to my old ameriprise portfolios. I now own only vanguard index funds and am very happy with the decision.

 

[Tw90663]

That is a harsh comment there rescue me. Im not seeking any "fame" of any sort.

 

[youbet]

Guess I'm commenting on in comparison to my old ameriprise portfolios. I now own only vanguard index funds and am very happy with the decision.

Thanks for clarifying. You completely changed the subject of the thread without mention so it's not surprising some of us were confused by your statement.

 

[rescueme]

That is a harsh comment there rescue me. Im not seeking any "fame" of any sort.

Well, with your mention of "Ameriprise", it is now evident of your comarison with a company of questionable worth.

When you enter of a discussion of FIDO vs. VG, (the title of the OP's thread) you must be careful of what you are speaking of.

I would not include A* in any serious discussions of options available....

 

[Tractor guy]

I've got all of my investment accounts at Vanguard. Used to have them at 4 institutions. Much cheaper & simpler now. Consolidating accounts bumped me up to Flagship so am getting those benefits.

I do NOT have my bank accounts at Vanguard. Between my banking, savings, & CD's (at 2 different banks) I have a couple of years living expenses so don't have any worries about Vanguard locking me out.

Lorne

 

[ziggy29]

Guess I'm commenting on in comparison to my old ameriprise portfolios. I now own only vanguard index funds and am very happy with the decision.

Glad you came to the light.

Seriously, as to the original question, whether Vanguard only or moving some to Fido, there are really only two considerations I see:

1) If you really think your capital is at additional single-point failure risk if Vanguard somehow "failed" (and keep in mind that a custodian failing doesn't mean the underlying securities failed), then by all means, nothing wrong with adding a Fidelity account.

2) If there is a particular fund, a particular investment option, a particular service Fidelity may offer that you can't get with Vanguard only, by all means open a Fido account as you need it.

 

[nwsteve]

Glad you came to the light.

Seriously, as to the original question, whether Vanguard only or moving some to Fido, there are really only two considerations I see:

The two reasons given are certainly on target. IMHO, a third consideration is the breadth and quality of tools available for the investor. Fidelity wins this one hands down.

For me the fourth one, is responsiveness and engagement of customer service. Having done business with both companies, my experience clearly favors Fidelity especially if your issue is out of the daily routine.
Nwsteve

 

[Spanky]

Our situation:
1/3 Fido
2/3 Vanguard

Both companies are fine. We have limited contact with their customer service and therefore cannot comment about responsiveness. My biggest complain about Vanguard is that it takes a while (about a week or more) to clear direct deposit from another bank or even its own brokerage service to our money market account.

 

[Katsmeow]

I do worry sometimes about what would happen if someone got my password to Vanguard.

I have thought of this. My safeguard against this is that I log into the account at least every other day and usually every day. My experience is that transfers take awhile so if I couldn't log in (because someone got in and changed the password) or if I logged in and saw a pending transfer then I could stop it.

The other thing I've wondered about (not with regard to Vanguard or Fidelity where we have the rest of our money...) is this. I know that Vanguard doesn't own the index funds so I'm not worried that if Vanguard goes under that all my money will be gone. But in general (again not so much with Vanguard) I have wondered how you guard against the possibility that you think you own an index fund...but really don't. That is, you give someone money (such as Vanguard or Fidelity or whoever) and they tell you they bought the Wellesley with it (or whatever). And they send you a confirmation to Wellesley...but they really didn't buy Wellesley. Instead, someone took your money and absconded with it or gambled it away, etc. And they get found out and you think you are OK since you own the index fund but then Wellesley (or whatever) says you don't...that it was never purchased...

 

[W2R]

I have thought of this. My safeguard against this is that I log into the account at least every other day and usually every day. My experience is that transfers take awhile so if I couldn't log in (because someone got in and changed the password) or if I logged in and saw a pending transfer then I could stop it.

The other thing I've wondered about (not with regard to Vanguard or Fidelity where we have the rest of our money...) is this. I know that Vanguard doesn't own the index funds so I'm not worried that if Vanguard goes under that all my money will be gone. But in general (again not so much with Vanguard) I have wondered how you guard against the possibility that you think you own an index fund...but really don't. That is, you give someone money (such as Vanguard or Fidelity or whoever) and they tell you they bought the Wellesley with it (or whatever). And they send you a confirmation to Wellesley...but they really didn't buy Wellesley. Instead, someone took your money and absconded with it or gambled it away, etc. And they get found out and you think you are OK since you own the index fund but then Wellesley (or whatever) says you don't...that it was never purchased...

Oh wow - - I never thought of that, Katsmeow. Now I have something else to worry about....

 

[REWahoo]

The other thing I've wondered about (not with regard to Vanguard or Fidelity where we have the rest of our money...) is this. I know that Vanguard doesn't own the index funds so I'm not worried that if Vanguard goes under that all my money will be gone. But in general (again not so much with Vanguard) I have wondered how you guard against the possibility that you think you own an index fund...but really don't. That is, you give someone money (such as Vanguard or Fidelity or whoever) and they tell you they bought the Wellesley with it (or whatever). And they send you a confirmation to Wellesley...but they really didn't buy Wellesley. Instead, someone took your money and absconded with it or gambled it away, etc. And they get found out and you think you are OK since you own the index fund but then Wellesley (or whatever) says you don't...that it was never purchased...

Now that you mention it, how do I know I'm really responding to you and not to someone who took Katsmeow's E-R.org ID, gambled away Katsmeow's nest egg, and continues to post here to keep anyone from getting wise to what's up?

 

[Rustward]

The other thing I've wondered about (not with regard to Vanguard or Fidelity where we have the rest of our money...) is this. I know that Vanguard doesn't own the index funds so I'm not worried that if Vanguard goes under that all my money will be gone. But in general (again not so much with Vanguard) I have wondered how you guard against the possibility that you think you own an index fund...but really don't. That is, you give someone money (such as Vanguard or Fidelity or whoever) and they tell you they bought the Wellesley with it (or whatever). And they send you a confirmation to Wellesley...but they really didn't buy Wellesley. Instead, someone took your money and absconded with it or gambled it away, etc. And they get found out and you think you are OK since you own the index fund but then Wellesley (or whatever) says you don't...that it was never purchased...

Do you think the SEC might require independent audits to detect this kind of activity?

 

[travelover]

Do you think the SEC might require independent audits to detect this kind of activity?

Hey, they we all over Bernie Madoff, weren't they?

 

[Packman]

With regard to password secutiy and the like, I don't know about other companies, but with FIDO, I get a response by email and by snail mail whenever I change email addresses (goes to both old and new emails), or passwords, or make trades, whatever. If I wasn't the initiator, they expect to hear from me pronto. If I try to withdraw funds, the money can only go to my preset bank acccount, or a check comes to my home address. The worst I can see happening, is that if someone gets my password they can see my accounts. Am I missing something?

 

[Rustward]

Hey, they we all over Bernie Madoff, weren't they?

Not a Madoff expert, but my understanding is that Madoff had two firms: 1) a "front office" firm that was public, transparent, and legitimate and 2) a "back office" firm that was private, and obscure. The ponzi was in the back office.

 

[gerntz]

I thought all the major brokerages' accounts were insured by the SIPC and privately by the brokerages to the tune of $75M per account or customer against fraud or theft, not investment values.

 

[Katsmeow]

I thought all the major brokerages' accounts were insured by the SIPC and privately by the brokerages to the tune of $75M per account or customer against fraud or theft, not investment values.

Not quite. For example, Vanguard says:

Securities in your brokerage account are held in custody by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation. Vanguard Marketing Corporation is a member of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash subject to future adjustments for inflation). To obtain information about SIPC, visit www.sipc.org or call SIPC at 202-371-8300.
To offer greater protection and security, Vanguard Marketing Corporation has secured additional coverage from certain insurers at Lloyd's of London and London Company Insurers for eligible customers with an aggregate limit of $250 million, incorporating a customer limit of $49.5 million for securities and $1.9 million for cash. Coverage provided by SIPC and certain Lloyd's of London and London Company Insurers does not protect against loss of market value of securities. The policy provided by certain Lloyd's of London and London Company Insurers is subject to its own terms and conditions.

Note that the SIPC protection is limited. Yes there is an insurance policy but it has an aggregate limit that is shared.

 

[travelover]

Not a Madoff expert, but my understanding is that Madoff had two firms: 1) a "front office" firm that was public, transparent, and legitimate and 2) a "back office" firm that was private, and obscure. The ponzi was in the back office.

This was what I was referring to

Madoff whistleblower blasts the SEC's failure - Feb. 4, 2009

Markopolos began contacting the SEC at the beginning of the decade to warn that Madoff was a fraud. He sent detailed memos, listing dozens of red flags, laying out a road map of instructions for SEC investigators to follow, even listing contacts and phone numbers of Wall Street experts whom he said would confirm his findings. But, Markopolos' whistle-blowing effort got nowhere.
"I gift wrapped and delivered the largest Ponzi scheme in history to them and some how they couldn't be bothered to conduct a thorough and proper investigation because they were too busy on matters of higher priority," Markopolos told the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.

 

[Rustward]

This was what I was referring to

Madoff whistleblower blasts the SEC's failure - Feb. 4, 2009

"When he tried to deliver an investigative file to former New York Attorney General Eliot Spitzer, Markopolos said . . ."

He was working with the best of the best . . .