Fidelity vs Vanguard (for about the gazillionth time)

[RonBoyd]

Thanks to both RonBoyd and Nords for sharing the WSJ back door for content. I had not stumbled across that avenue before. Is it common for the Google backdoor work for other media sites?
Nwsteve

Psst... NYtimes

 

[FinancialDave]

Safe is a relative term!

Same here.

DW/me invest with both companies, and being in retirement (pre-SS, pre-pension), we draw from both to satisfy our income needs (me? FIDO. DW? VG).

As has been said many times before, both have their positives/negatives, and in reality, why must it be a choice between either one?

And please don't tell me that it is easier to "manage" your assets with just one company (be it FIDO, VG, or any other company).

With today's tools and migration services (being able to see all your assets, regardless of provider - such as is provided by Yodlee), there is no reason to consider that as a prime reason to just give all your assets to just one company.

Just my simple POV ...

If Yodlee is one of those places that pulls together multiple financial sites information, including passwords, this is not for me. I am worried enough when places like TDAmeritrade can't keep your account data safe - how would a small company like Yodlee be better? This just adds one more site to the mix for a security breach.

fd

 

[RonBoyd]

If Yodlee is one of those places that pulls together multiple financial sites information, including passwords, this is not for me.

I am not sure you have a voice in that decision:

Google knows you but Yodlee knows your online banking habits. - Nov. 16, 2010

If you've banked online, you've probably used Yodlee without even knowing it. More than 200 financial institutions, including Citibank and Bank of America use its services, touching nearly 26 million consumers. Your bank probably uses its technology, too, though Yodlee doesn't like to name names.

When you log into your bank and transfer money between your savings and checking accounts, that's Yodlee providing to [sic] the technology to make the transaction happen. Paying a bill online? Yodlee. Signing up for a new account? Yodlee. Analyze how much you spend? Yodlee.

 

[FinancialDave]

I am not sure you have a voice in that decision:

Google knows you but Yodlee knows your online banking habits. - Nov. 16, 2010

I think the key may be this:

For example, on Bank of America's website, customers can see all of their bank accounts in one place. Behind the scenes, Yodlee has scraped your financial data from your various lenders -- student loans, mortgage holder, credit cards, 401(k), checking, savings -- and fed it to Bank of America. (With your log-ins and permissions, of course. But more on that later.)

How I understand this is that Yodlee just supplies the API (application interface) to these banks, which would seem to indicate that the bank is responsible for securing your passwords, even though the Yodlee API may interface to it on any site that uses it.

Now here is what I perceive to be the problem when you allow one site, such as MINT, or say B of A in the example above to essentially "save" all your passwords, you are putting all your eggs into one proverbial basket.

I see nothing to indicate in the article nor the Yodlee website that it would be storing your passwords on its site - it is basically interface and data mining software that runs on banking websites.

I could be totally wrong, but that is my impression, as financial institutes certainly share information but hopefully not your passwords WITHOUT YOUR PERMISSION, as the article notes.

fd

 

[FinancialDave]

Fidelity Fees

Fidelity was not that bad the last time I looked at everyone else, though I haven't checked Vanguard. The Fidelity $75 fee is only for buys, sells are free. Other companies charged less but had the same charge for buys and sells. I figured I'd be making large buys in setting up my AA and then small sells raising retirement cash. So Fidelity actually looks cheaper to me. I eventually went direct to fund companies for most of my non-NTF funds, so I don't think I'm all NTF at Fidelity now. I'd rather have multiple accounts than fees.

I just checked on the Fidelity site and it still looks to me like $75 flat fee both ways, but even if it isn't here is the issue:

Most people don't realize how these fees and commissions compound over time. Let's take your simple $75 commission charged on a mutual fund earning 10% a year over it's lifetime. Say you own this fund for 40 years - this $75 cost you $3,394 over the 40 years you held the fund. Maybe noise in the bigger picture of a million dollar portfolio, but still is one of those fees that can be eliminated or reduced and this is the cost of just ONE commission. The sell commission would only cost you $75 over the life of the fund -- this is why front end loads are so destructive.

fd

 

[samclem]

I am not sure you have a voice in that decision:

Google knows you but Yodlee knows your online banking habits. - Nov. 16, 2010

Hmmm. If I've set up my passwords properly directly with my bank and the passwords are compromised (either because the bank gave 'em to Yodlee or because the bank itself was negligent), I'd think I and the other folks affected would be in a good position to force the bank to make things right. But, if I give all my passwords and account info to Yodlee and my accounts later get hacked/zeroed out, then deciding which party is at fault gets a lot harder. And I doubt Yodlee's pockets are as deep.

 

[JakeBrake]

We use both. My Fidelity rollover IRA was formerly my MegaCorp 401K at Fidelity. My Vanguard rollover IRA is my MegaCorp lump sum pension plus our Roth IRA's. The bulk of the money at both is invested in Freedom or Target funds.

Personally, I prefer Vanguard because the website is much easier to manage IMHO and, of course, the expenses are lower. I have been considering rolling the Fidelity IRA to Vanguard after the dividends are paid in December.

I will probably keep both for diversity. When my RMD's become due in the not too distant future, the proceeds will be going into two local credit unions.

 

[nwsteve]

I just checked on the Fidelity site and it still looks to me like $75 flat fee both ways, but even if it isn't here is the issue:

Most people don't realize how these fees and commissions compound over time. Let's take your simple $75 commission charged on a mutual fund earning 10% a year over it's lifetime. Say you own this fund for 40 years - this $75 cost you $3,394 over the 40 years you held the fund. Maybe noise in the bigger picture of a million dollar portfolio, but still is one of those fees that can be eliminated or reduced and this is the cost of just ONE commission. The sell commission would only cost you $75 over the life of the fund -- this is why front end loads are so destructive.

fd

There is no transaction fee on dividend/capital gains distributions. The $75 is only for the purchase. If you really want a fund not in the NTF family, simply buy the fund direct and later move to your Fido account.
I have recently moved Vanguard positions to Fido and sold partial shares, no sales costs.
Nwsteve

 

[rsingh6675]

Fidelity/Vanguard/ Scottrade

For Mutual Fund transactions, I use Scottrade instead of Fidelity. They charge only $17 transaction fee. They also have some funds that can be bought with NO Transaction Fee.

 

[Nords]

Thanks to both RonBoyd and Nords for sharing the WSJ back door for content. I had not stumbled across that avenue before. Is it common for the Google backdoor work for other media sites?
Nwsteve

I try it every time I get paywalled. You never know who's signed up since the last time you tried.

If Yodlee is one of those places that pulls together multiple financial sites information, including passwords, this is not for me. I am worried enough when places like TDAmeritrade can't keep your account data safe - how would a small company like Yodlee be better? This just adds one more site to the mix for a security breach.

Yodlee is one of the very first places to aggregate financial info, and I agree with you that they can be hacked. Everybody can be hacked. The difference is that Yodlee and the financial institutions have been doing business for long enough to be able to make you whole. Eventually.