Fidelity vs. Vanguard: Which is best?

[bUU]

A co-worker of mine uses Schwab. They're basically as good as Fidelity from what she describes, and therefore also better than Vanguard in terms of customer service.

For me, the fact that there is a Fidelity Investor Center in town makes the decision trivial: There's no way that Vanguard could ever be a consideration placed over Fidelity. However, even if I only had to deal with the companies remotely, Fidelity is still better, and deliberately so: Vanguard is like the Wal-mart of the financial services industry: Deliberately less expensive even at the expense of a small amount of quality. (Though, to be fair, there's basically nothing I get from Vanguard that is less expensive than what I could get at Fidelity, since Fidelity has lowered so many of its Spartan ERs to complete.)

But there really is no reason to make a decision between Fidelity and Vanguard. For brokerage services, use Fidelity. If you would like to own some Vanguard funds, just go to Vanguard.com and open a mutual funds account. I see no reason to not have both.

 

[okapi]

85% of assets with Vanguard.Only time I talked to a rep was five years ago when I rolled over my 401k.Went smoothly.My sister-in-law uses T.RowePrice cause she likes to walk into the local office,to each his own.Vanguard,Fidelity,and Price are the only ones I would use.Good reputations and reasons given already.

 

[mystang52]

This is such a personal-taste decision. I don't know if I've been lucky, or some of the other responders here have been unlucky; BUT, I find Vanguard's customer service superlative.
I've needed their help several times and each tiome they have gone above and beyond.

 

[panhead]

I have about 35% of my assetts with Fidelity (all 401k). They have been very good and I do like the investment centers. I set up my solo 401k with them and they made it very easy. They also allow rollovers into their solo 401k (I'm told Vanguard does not, but never actually asked Vanguard) so this was helpful with preparing for my backdoor ROTH strategies. I've spoken to them on the phone and at the investment center several times and they've been great.

I haven't done anything very complicated with Vanguard. The most difficult thing I did was roll a ROTH IRA to them and that was pretty smooth. I'm pleased with both firms, but if I was forced to choose one I would go with Vanguard. They have a nice selection of low cost index funds over many sectors which works very well for the way I invest. As others have said though, I don't think you can go very wrong either way.

 

[HFWR]

Have a taxable account and a [-]mini[/-] Roth at VG, and two different employer accounts - 401k and 457b - with Fidelity. No complaints with either, but may consolidate completely once I fully FIREd...

 

[ziggy29]

If you stick with mutual funds, I'd prefer Vanguard. If you want a one-stop broad array of financial services, including buying and selling individual securities and banking services, Fidelity or Schwab might be a better choice.

There's no reason it has to be either/or, though, except for convenience and ease of moving money around. I have some Vanguard mutual funds, my last Megacorp's 401K is still in a Fidelity account and most of my IRA assets and a checking account are with Schwab. I may consolidate at some point but haven't found a compelling reason or need to do so just yet.

 

[rodi]

Has anyone considered Charles Schwab also?

I've got most of my money at Schwab (taxable, inherited IRA, and a rolled 401k).
As mentioned previously - I have a rolled IRA at Fidelity, and a couple 529's at Vanguard.

Haven't dealt much with FIDO customer service except when I was getting my name changed when I got married. (Had a glitch, but they helped me solve it.... and didn't lose the certified marriage certificate.)

Schwab I have a personal "financial consultant". She's very nice - calls me once a quarter to "check in" - and knows I'm a roll-your-own type. She's been working with me on a 401k roll over (my division was sold off - so we can roll our 401k out and start anew with the new company's 401k).
My sister needs/wants more hand holding - uses their managed funds services. She stops in to chat with the rep (we have the same one) about once a month. So the level of service is whatever you want. The one time I met my financial rep in person was when I went in to double check my retirement plan estimates. (She green lighted things after we discussed the budget side to confirm to her that our budget was based on reality.)

My impression of Vanguard - fine for do-it-yourselfers... not so good after you die, for your family or estate.

 

[CH]

I understand Vanguard is owned by its members. I remember reading how much Jack Bogle made when he was running Vanguard (don't remember the number) but it was a pittance compared to CEOs of comparable public companies. If a company is owned by its members, their interest is more aligned with the members than if the company has public or private owners. I am sure someone will straighten me out if I am wrong on this.

This article says what I was trying to say...but stated much better:
Fidelity vs. Vanguard: Which is best? - MarketWatch

Amazing timing on the article!

 

[Accidental Retiree]

I've got most of my money at Schwab (taxable, inherited IRA, and a rolled 401k).

We have been with Schwab since opening our first IRAs back in the early 80s and have never had problems. Most of our money is there.

More recently, we have rolled some IRA funds to Vanguard so we could get into Wellesley. We intend to roll more funds from a credit union to VG when a couple CDs mature.

We will keep some combination of Schwab and VG, I imagine.

 

[foxfirev5]

Fidelity wins on customer service Vanguard on expenses. We use both, index funds at Fidelity- Spartan Advantage class and others at Vanguard. However I don't see a good ST bond fund at Fidelity at all. The ST investment grade expenses eat big time into the paltry interest rates. Likewise when comparing the risk of the Fidelity junk bond funds compared to Vanguard - again VG wins with higher quality holdings and minimal expense. Compare the BBB, BB and B holding % if you're curious.
So I guess I'll continue to use both.

 

[CH]

The only thing I do like about Fidelity is their Retirement Income Planning program. Very nice. I think you need to have an account there to use it. My wife has a small (old) IRA there.

 

[seraphim]

Looked at fidelity but went with VG. I like the funds, and it's easy to set up a diverse and balanced portfolio with 2 to 4 funds. Easy process to set up with plenty of assistance over the phone, and even set a plan for me for free based on the AA I wanted. They do RMDs automatically, and have always been helpful when I called. Like the portfolio manager on their website. Overall, a good experience.

 

[Hamlet]

Here is something I thought was a little strange--

My new Megacorp 401(k) is at Fido, but has mostly Vanguard funds in it.

 

[james7]

Fidelity wins every time for customer service, before one even takes their walk in offices into consideration. Vanguard closed their walk in offices; they had several in the Philly area back in the 1990s. I really have to wonder about Vanguard's work environment as their customer service reps seem quite irritated, like they don't want you to call. Fidelity reps couldn't be friendlier. Also, Vanguard wouldn't send me an account opening kit; he told me to go online and print it out. American Century has excellent customer service; I can't say enough good things about it. If it is customer service you are looking for, American Century and Muriel Siebert are both tops in my book. T Rowe Price is also good.

Several years ago I walked into a Charles Schwab office to open an account in a trust. As I was filling out the application, I had a few questions so I asked the man behind the desk. He apparently knew nothing as every time I asked him a question, he got up and ran into the back room and asked for help. After completing the application, I had him look it over and handed him a substantial check to begin the account and walked out. Exactly 30 days later, I received my application and uncashed check in an envelope in the mail with a note saying they couldn't process my application because it was not completed properly. It doesn't take 30 days to send a letter to Antarctica, and the Schwab office is in the same town that I live! I have to wonder why they did not contact me as they had my phone number, cell number, and e-mail address on the application. I would like to think that when I hand money to a bank or broker it is safe, and I don't need to worry about it floating around in the mail. Needless to say, I took my business elsewhere.

 

[foxfirev5]

Here is something I thought was a little strange--

My new Megacorp 401(k) is at Fido, but has mostly Vanguard funds in it.

Best both worlds. My 401k does the same thing. Institutional class of VG index funds with miniscule expenses. The only VG fund they don't have is an emerging market equity fund to fill in for the VG Developed market Instl. class. I use a brokeragelink acct with Fidelity EM Index advantage class (current Er .2%) to round out my diversified portfolio.

 

[bubblehead]

This article says what I was trying to say...but stated much better:
Fidelity vs. Vanguard: Which is best? - MarketWatch

Amazing timing on the article!

having read this article-i don't think he actually know fidelitys funds. their Spartan funds are the equal of vanguards in the low costs department.

 

[photoguy]

Although I don't use fidelity directly I can certainly believe their customer service is better than vanguard. But I have been very happy with my interactions with vanguard reps and I think they are very good/excellent on this front. However, all I have to compare vanguard to are companies like banks, utilities, support lines, etc. so my maybe my expectations are too low.

 

[Huston55]

Thread Bump

Just a bit of data on the VG vs Fido question; regarding customer service.

My accounts are with Fido but, I do have some VG funds. After several months of ownership, I noticed that I had Wellington (VWELX) vs Wellington Admiral (VWENX) shares in my taxable account, even though my account balance is large enough to qualify for Admiral shares, which have a 0.17% vs 0.25% ER.

So, I called a Fido rep, and spent <2 mins on the line while she confirmed that they could do a non-taxable exchange. I'll get an email Monday confirming the transaction. Boom! Done!

 

[bUU]

They do do the conversion automatically on a "periodic" basis, but I like to initiate it myself.

https://personal.vanguard.com/us/insights/article/admiral-questions-10152010

 

[eta2020]

I like Vanguard funds owned in either Etrade or Schwab account.

Reason is that both Etrade and Schwab offer hardware RSA security token. BTW Schwab has some extremely cheap Index Funds which I would choose over Vanguard.....

 

[MRG]

Both great companies. My Megacorp 401k with a 3rd party, its mostly in Vanguard funds. My rollover is in Fidelity, equities, index, small amount in active funds, an occasional call or put too.

A big decision point for me was the ability to be in Fidelity's office in 15 minutes. If you want low cost index funds they both have them. The article quoted seems to suggest only Vanguard did, perhaps I misunderstood the author.

MRG

 

[DevonMiles19]

Both seem like quality companies

As sort of a layman, trying to learn more I'd ask:

Why not just spread the money out and use both Fidelity and Vanguard?

 

[Huston55]

As sort of a layman, trying to learn more I'd ask:

Why not just spread the money out and use both Fidelity and Vanguard?

Because it's a pain having $ in multiple places Nd doing so delays/prevents you getting higher level of service/free advice based on acct balance.

 

[Free To Canoe]

Just a bit of data on the VG vs Fido question; regarding customer service.

My accounts are with Fido but, I do have some VG funds. After several months of ownership, I noticed that I had Wellington (VWELX) vs Wellington Admiral (VWENX) shares in my taxable account, even though my account balance is large enough to qualify for Admiral shares, which have a 0.17% vs 0.25% ER.

So, I called a Fido rep, and spent <2 mins on the line while she confirmed that they could do a non-taxable exchange. I'll get an email Monday confirming the transaction. Boom! Done!

Interesting that I just bought some Wellesley in my FIDO IRA recently and the trade would not go through as an Admiral acct even though I qualified. I went ahead and bought the non-Admiral anyway. Your post has encouraged me to give Fido a call on Monday and see what they can do to fix this.

 

[kaneohe]

Another vote for Fidelity for service.......I have a 401K with both VG and Fidelity. In prep for taking RMDs this yr, I called them both asking if they could take distribution request via phone and be flexible about the timing,amount, taxes etc. Both said yes. When I finally did something,
Fidelity did as promised but it turned out that VG was unable to take phone orders so I had to do it by paper form, not by phone (perhaps they can do online too but I wasn't interested in that option). That means that VG is relatively inflexible tho you could change this mid yr, it is much more of a production that w/ Fido.

Then came the quarterly statements. Fidelity was clear and understandable and showed the distributions. I could not tell from the VG statement that I had taken a distribution even tho their statement took up the same number of pages as Fido's. VG lumped a share class exchange, distributions and dividends together as one line item so you had no idea what was going on.
Even the reps seemed confused about the share class exchange. One told me that I exchanged out at the end of the day and exchanged in at the beginning of another so that I gained or lost on the exchange. I have never seen that happen on a share class exchange. When I asked to get a detailed statement, they took so long responding that I called back to check and they ended up doing the same task twice. An incredible waste of everybodys' time when a simple change to the statement would fix things. I'm thinking of sending Fido's statement to VG to copy.

Perhaps the retail side is different than the institutional side..............

edit: to be fair to the reps, they are the beneficiaries or victims of the system
that has been set up , including the monthly statements, so this is not purely a service issue, but goes deeper into the institutional processes that have been set up for them.

edit2: it is likely that we are biased by our latest experiences and that our individual experiences have too small a sample size to reasonably conclude anything so someone would have to synthesize all the inputs to make a reasonable conclusion.