who is better - schwab, fidelity or vanguard

[bobbee25]

If you want to buy individual bonds and also mutual funds, who is better,
Schwab, Fidelity or Vanguard ?
Schwab seems to have very knowledgeable advisors.

 

[ziggy29]

if you're ONLY trading mutual funds I'd pick Vanguard. If I wanted to also trade individual securities I'd go with Schwab or Fidelity. I think Vanguard is the best for mutual funds hands-down, but the other two are stronger in terms of trading individual stocks and bonds.

All three, IMO, are pretty solid choices, and you could do a lot worse than any of these three.

 

[FinallyRetired]

I note from the Schwab site under cash solutions that they have Schwab bank and Schwab brokerage. The bank offers two FDIC insured accounts: checking and savings, offering 1% and 2%. How easy is it to move money from these accounts into the brokerage and back?

 

[ziggy29]

I note from the Schwab site under cash solutions that they have Schwab bank and Schwab brokerage. The bank offers two FDIC insured accounts: checking and savings, offering 1% and 2%. How easy is it to move money from these accounts into the brokerage and back?

It's very easy. I'm with Schwab, and you can move money from one account to another online, and that includes the brokerage to the banking side (and back). In fact, when I deposit to my Schwab brokerages I include a check in the postpaid deposit envelopes they provide, and as soon as the money's in the bank accounts, I transfer it to the brokerage.

 

[ERD50]

If you want to buy individual bonds and also mutual funds, who is better,
Schwab, Fidelity or Vanguard ?

Take the input from others on which company is best for trades, but....

Schwab seems to have very knowledgeable advisors.

IMO, I would put zero weight on that statement. And I would say the same if you replace Schwab with any other name. If they were knowledgeable, they would be running a fund that beats the market under all conditions.

-ERD50

 

[al_bundy]

is there a brokerage that has iphone access?

etrade has a blackberry app you can download, but i have my eyes set on an iphone

 

[youbet]

Take the input from others on which company is best for trades, but....



IMO, I would put zero weight on that statement. And I would say the same if you replace Schwab with any other name. If they were knowledgeable, they would be running a fund that beats the market under all conditions.

-ERD50

I'm with Schwab. If "knowledgable advisors" means having folks who will give you good advise on how to invest, I agree with you. No brokerage house fills that need IMO. However, Schwab does have an excellent phone team available 24x7 for answering questions about mechanics, dealing with administrative issues, etc. that are excellent. If I can't call at 2:00 AM on a holiday and have a reasonably competent person answer a question about a transaction in my account or how to do a certain type of trade or whatever, I'm disappointed. While I'm not always satisfied with calls to Schwab, more often than not I am.

I also like having a walk-in office close-by. Don't go very often, but they're there and are pretty responsive about answering questions, resolving any issues, etc.

Of course, YMMV.

 

[Lsbcal]

If you want to buy individual bonds and also mutual funds, who is better,
Schwab, Fidelity or Vanguard ?
Schwab seems to have very knowledgeable advisors.

Vanguard -- good for low cost equity and bond mutual funds. If you go with index funds this is the place to be. Reducing expense ratios by 1% per year will save you a bundle over several years. If you don't believe this, try running FIRECalc with different ER's over a typical retirement period.

Schwab -- good and easily accessible phone support 24/7. OK for some things like CD's, maybe individual bonds, ETF's and individual stocks. But their suggestions on equity mutual funds tend to be in the ER=1% and higher category -- too high.

Depending on your situation you may want an account at both firms and eventually consolidate at one of them.

 

[CuppaJoe]

I have a soft spot for Schwab because that is where my employer put my nice bennies. Hello, retirement!

 

[Rambler]

I note from the Schwab site under cash solutions that they have Schwab bank and Schwab brokerage. The bank offers two FDIC insured accounts: checking and savings, offering 1% and 2%. How easy is it to move money from these accounts into the brokerage and back?

A couple clicks with the mouse. Really simple. I'm with Schwab.

Stocks are easy to buy, bonds are easy to buy, the research seems ok. Call center is one of the best I have ever encountered in my life (ymmv). Can even buy vanguard funds.

R

 

[bamsphd]

If you want to buy individual bonds and also mutual funds, who is better,
Schwab, Fidelity or Vanguard ?
Schwab seems to have very knowledgeable advisors.

I buy mostly open-ended index-based mutual funds, supplemented with individual treasury bonds purchased at auction, and keep it fairly simple doing almost everything possible via the WWW. I have been happy with Vanguard, and think they are an excellent selection. My only real gripe with Vanguard is they only offer specific identification lot tracking through their brokerage account, not for their own open-ended mutual funds. For their own funds you have to either use average cost which they will track, or track your share lots yourself.

If you want to give more of your 4% withdrawal rate to your money manager, other companies will offer you more services like walk-in branches, and international phone banks allowing you to talk to a "real person" 24 hours a day. It just depends on how much of your money you want to keep.

 

[ziggy29]

If you want to give more of your 4% withdrawal rate...

Does anyone still believe in that?

 

[youbet]

Schwab -- good and easily accessible phone support 24/7. OK for some things like CD's, maybe individual bonds, ETF's and individual stocks. But their suggestions on equity mutual funds tend to be in the ER=1% and higher category -- too high.

Just because you're using Schwab as your borkerage, why would you listen to or follow their suggestions regarding equity mutual funds? Fund selection should be made on the basis of diverse research. My largest holding in my Schwab account is VTI, a Vanguard ETF!

 

[youbet]

If you want to give more of your 4% withdrawal rate to your money manager, other companies will offer you more services like walk-in branches, and international phone banks allowing you to talk to a "real person" 24 hours a day. It just depends on how much of your money you want to keep.

The only extra expenses I found dealing with Schwab instead of Vanguard is that when purchasing Vanguard funds, Schwab charges me a commission. I'm not a frequent trader so that was minimal. Also, I've been moving to ETF's in lieu on MF's and Schwab does a good job there.

Other than buying Vanguard funds, can you think of any expenses at Schwab that are higher than Vanguard? Maybe I'm missing something.

 

[Lsbcal]

Just because you're using Schwab as your borkerage, why would you listen to or follow their suggestions regarding equity mutual funds? Fund selection should be made on the basis of diverse research. My largest holding in my Schwab account is VTI, a Vanguard ETF!

The OP mentioned Schwab advisors so I was partly responding to this. ETF's are fine but not everyone should be investing in them as opposed to the open end fund counterparts. It depends on how much you are investing each time, spreads, intraday pricing, etc.

If you want to go with Schwab instead of Vanguard that should work OK. It really depends a lot on how you will structure your portfolio and how you choose to use the services. You can do well or go down in flames with any of these firms.

 

[bamsphd]

[Regarding 4% withdrawl rate.]

Does anyone still believe in that?

Yep. I still expect to use 4% of my portfolio value when I retire as a rough starting point for a safe withdrawal rate. I certainly don't expect to take more than 4%! Alas, some volatility in my portfolio's total value when marked-to-market recently has postponed what I thought was an imminent retirement. I try to console myself that it is probably better to be w@rking than RE when not FI. Though if I was single, I might just move to Detroit and become a slum-lord instead or w@rking.

 

[bamsphd]

Other than buying Vanguard funds, can you think of any expenses at Schwab that are higher than Vanguard? Maybe I'm missing something.

Given that I buy mostly index funds and treasuries at auction, what other expenses would I care about?

 

[youbet]

Given that I buy mostly index funds and treasuries at auction, what other expenses would I care about?

OK. I thought that perhaps you had actually compared expenses but obviously not.

 

[youbet]

If you want to go with Schwab instead of Vanguard that should work OK. It really depends a lot on how you will structure your portfolio and how you choose to use the services. You can do well or go down in flames with any of these firms.

I did a Schwab vs Vanguard fee comparison a while back and the only thing I could find that would be cheaper for me at Vanguard would be buying Vanguard MF's. I like several Vanguard MF's and hold them in various Schwab accounts. I'm already RE'd so my purchases are lump sum and therefore commissions aren't an issue. Div and CG reinvestments are free.

I haven't been able to get DW interested in active participation in handling our investments. So, I use Schwab and should I croak unexpectedly or become incapacitated, she could get some in person help with the mechanics.

I haven't heard anything about Vanguard or Fidelity brokerages that makes them any more compelling.

 

[haha]

I did a Schwab vs Vanguard fee comparison a while back and the only thing I could find that would be cheaper for me at Vanguard would be buying Vanguard MF's. I like several Vanguard MF's and hold them in various Schwab accounts. I'm already RE'd so my purchases are lump sum and therefore commissions aren't an issue. Div and CG reinvestments are free.

I haven't been able to get DW interested in active participation in handling our investments. So, I use Schwab and should I croak unexpectedly or become incapacitated, she could get some in person help with the mechanics.

I haven't heard anything about Vanguard or Fidelity brokerages that makes them any more compelling.

I think Fidelity and Schwab are very similar and both IMO very good. Vanguard occupies a different and more specialized niche.

Ha

 

[tryan]

Left Schwab ~2005 ... they wanted me to pay for EOY statements needed to do taxes. My Fidelity and Vanguard accounts gave them to me for free.

Sat on the phone with a Schwab rep for a 1/2 hour getting the info over the phone - he was annoyed. Explained why I was getting the info over the phone ... they sent the statements a couple weeks too late. Primarily with Fidelity now (megacorp 401k is there).

 

[bamsphd]

Given that I buy mostly index funds and treasuries at auction, what other expenses would I care about?

OK. I thought that perhaps you had actually compared expenses but obviously not.

Before investing I compared the expense ratios of many different funds. Thankfully, I quickly realized that index funds were the best choice for someone who thinks like an engineer, which significantly narrowed my choices. I then ordered prospectuses, and statements of additional information for the index funds I wanted at Vanguard, Fidelity, Schwab, and others. I did not give credit for "temporarily waiving fees" because I do not want to move my money, a taxable event, after "temporary" expires. For open-ended index-based mutual funds, Vanguard was unquestionably the most cost efficient option when I did my search.

My calculations indicate that I now pay Vanguard a little over $1,000 per year in management fees on my mutual funds based on my assets and the fund expense ratios. At my asset level, Vanguard does not charge me anything to purchase treasuries at auction. So for the foreseeable future, unless I sell a treasury bond early or Vanguard changes their fee structure, the only money Vanguard will make on me is from their fund management fees. They are simply not charging me any other fees.

Besides my individual account with Vanguard, I have a Fidelity account for my 401(k) and ESPP. Until I part ways with my current employer that account will remain open. Because the 401(k) is held through Fidelity, but actually invested in Vanguard Institutional index funds, I might keep the 401(k) around for a long time!

For those who want to see the Vanguard brokerage fee structure, use this link: https://personal.vanguard.com/us/accounttypes/brokerage/ATSIntegrityValueContent.jsp However, in my case such fees are simply not material. The fund ER totally dominates my investment expenses.

If I was starting from scratch today with a smaller asset base, I would be tempted to use a service like Buy Stocks Online and invest your money at ShareBuilder and purchase ETFs instead. That option was not available when I started with Vanguard. It is an option that should be seriously considered if you don't have enough assets to purchase Vanguard Admiral shares. I recommend individuals wanting to invest in equities who have less than $3,000 use ShareBuilder and Vipers. For example the new baby received $$$ from the grandparents...

As far as I know, if you want to use open-ended index-based mutual funds, Vanguard is still the clear choice. If you want to use Vanguard's funds, investing directly with Vanguard usually makes the most sense.

 

[youbet]

bamsphd,

The thread is about brokerages, not MF's/ETF's. I agree with you on Vanguard MF's/ETF's. They have some of the best, especially considering the low fees, and I own several. VTI, for example, is my largest holding.

My point is that if you need a higher level of customer service than Vanguard offers, you can use other brokerages, still own Vanguard funds or their ETF equivalents, and not pay appreciably higher brokerage fees than Vanguard charges. It looks like Vanguard Brokerage is a good fit for you given your investment style and objectives and your personal situation.

Edit: the good news of this thread seems to be that we're arm wrestling over brokerages that all have relatively low fees and good execution. I can still remember 25 yrs ago being with Paine Webber and having a "full service" broker..... Now there were some staggering brokerage fees!

 

[youbet]

Left Schwab ~2005 ... they wanted me to pay for EOY statements needed to do taxes. .

Ouch, that would hurt! What EOY statements do you need? Schwab supplies gain-loss reports free so you must need something beyond that. Something related to your real estate or other specialty investments?

They send me a 1099 and gain-loss report and that seems to do it.

 

[tryan]

It was the gain-loss EOY report ... I was told I opted no to pay the annual reporting fee they were charging at the time. I would guess they stopped charging for the reports after a bunch of painful phone calls (this was a few years ago).