Fidelity vs Vanguard vs Schwab....

[PapaBear67]

Newbie here so sorry if this is posted in the wrong forum or already a thread elsewhere.

As noted in my intro I am looking to move from the Private manager I use now (0.9% fee) to a low cost home. ~$1M in a couple IRAs. I have read good things about Fidelity and Vanguard, and their pro and cons. I haven't seen much discussion about Schwab. Ideally, there is a side by side comparison of several sites somewhere in this forum. I am also going to give PNC Wealth Management a shot as well. My small mortgage and daily banking are there. I suspect they'll 3rd party it out and/or the fees will be above the 0.25% max goal of mine, they deserve an interview.

Any thoughts, views, comment, cat calls, etc are appreciated.

"There are no bad ideas. All information is good information. It's what you do with it that make it a good or bad idea."

 

[nash031]

I'm totally self-directed and have used Vanguard for several years. Very happy. I think Fido and Vanguard are largely interchangeable, but have read that Fido maybe offers better online tools than Vanguard. Either way, you'll find broad support for both Vanguard and Fido here.


In my dealings with people at Vanguard for rollovers and such, they've always been very helpful, and I am not into their Voyager or Flagship account brackets just yet.


I'd suggest checking out their websites, seeing which tools you think you'll use and are the most useful and intuitive. Customer service at any of those three is probably about equal.

 

[youbet]

Customer service at any of those three is probably about equal.

Schwab and Fidelity have the advantage of brick and mortar locations if you live in a metro area. For example, my DW would not do well should I suddenly pre-decease her and she had to deal with Vanguard strictly on line or via telephone. Nothing I can do about that and I've tried. Fortunately, we're close to both Fido and Schwab offices.

It's a consideration in some situations.

 

[2017ish]

If you throw "Fidelity vs Vanguard vs Schwab" into a google search, you'll get some good discussions/comparisons. Bogleheads, Reddit, and a site called "brokerage review" are the top 3 hits. The latter has a nice side by side comparison, while the other two are useful. So too, plug that search into this site and you'll find a bunch of discussions dating back to at least 2009 (most of which seem to be Fidelity v. Vanguard).

Much comes down to what you want in an account. What type of investing/trading? Need a bank? Want free ATMs internationally? Ownership make a difference? How about brick/mortar branches?

In your position, especially if the IRAs are relatively equal, you could move enough to two different places to get premium service and then compare them.

 

[Midpack]

They're all reasonable choices. I had all our taxable/IRA money at Fidelity, switched it all to Vanguard about 10 years ago. My work 401k was with Schwab. So I have firsthand experience with all three.

After a couple (ill advised) years with a full retail broker, I originally chose Fidelity because I was trading stocks at the time (no funds), I liked their research tools, moderate fees and brick-n-mortar offices (pre Internet).

I moved to Vanguard when I was transitioning to index funds, de-emphasizing individual stocks. Vanguard has lower expense ratios and many more fund/asset classes. With online tools and transactions, there's no longer any need for brick-n-mortar IMO (Vanguard has none) - I'd consider it inconvenient if I couldn't do everything online or by phone (last resort).

I'd recommend you first decide what you want your asset allocation to look like now and the foreseeable future, and determine specifically what funds-stocks-other investments you want to hold. Then choose the firm that has the holdings you want, with the right combination of fees and service you require (it's a tradeoff, you get what you pay for). Choosing a firm first doesn't make sense to me. YMMV

 

[mpeirce]

There's really nothing wrong with using more than one.

I know during the last financial crisis I wasn't unhappy that I had money in a number of different institutions. It's rare that places like this fail, but you never know.

 

[youbet]

With online tools and transactions, there's no longer any need for brick-n-mortar IMO (Vanguard has none) - I'd consider it inconvenient if I couldn't do everything online or by phone (last resort).

So that there's no misunderstanding, Schwab's and Fidelity's brick and mortar sites do NOT detract from their on line performance. In fact, many consider them superior in their on line performance, especially for traders and researchers. Their brick and mortar locations are an extra, not a substitute for, complete on line services.

There are solid reasons for choosing Vanguard over the others, but I don't think their on line performance is one of them.

 

[CoolChange]

Schwab has a major advantage for me when travelling abroad for extended periods: They reimburse ATM fees from anywhere in the world and do not charge a currency conversion fee. Their currency conversion rates for ATM withdrawals have always seemed reasonable to me.

 

[Cobra9777]

My advice is to just get away from the private money manager ASAP, including any firm with "wealth management" in their name. Any of the 3 you mentioned in the thread title would work fine for a DIY approach and you'll save a ton of money. I agree with Midpack... first decide what investment products you want to own and what services you require to complement your own involvement in the process. Then pick a brokerage firm that offers those products/services with the best combination of cost and performance.

We own a 50/50 mix of iShares and Vanguard index ETFs, and house it all at Fidelity in a variety of taxable, tax-deferred, and tax-free accounts. We also use their cash management account instead of a regular bank and we use their cash-back credit cards. Our weighted average ER on the portfolio is 0.15%, with no other fees of any kind except the rare $7.95 commission when I trade a Vanguard ETF.

For my DIY style of money management and retirement planning, Fidelity's online tools work extremely well. Anytime I need to talk to someone or resolve a problem, I call or email our Private Client Group rep. Once per year, he also reviews the portfolio and we walk-through the RIP tool together.

From my research, I think Schwab and E-Trade would work just fine as well. Vanguard would be a great choice if your plan was to own primarily Vanguard mutual funds, which is certainly a proven, viable strategy. Otherwise, I find their brokerage service and other online analytical tools and capabilities to be somewhat lacking compared to the others.

 

[Happyras]

My advice is to just get away from the private money manager ASAP, including any firm with "wealth management" in their name. Any of the 3 you mentioned in the thread title would work fine

From my research, I think Schwab and E-Trade would work just fine as well. Vanguard would be a great choice if your plan was to own primarily Vanguard mutual funds, which is certainly a proven, viable strategy. Otherwise, I find their brokerage service and other online analytical tools and capabilities to be somewhat lacking compared to the others.

Ditto....We have accounts at all three, however, since the majority of our investments are VWIAX and VWELX (pssssst Wellesley and Wellington), we are in the process of moving the non-Admiral shares to VG to lower the ER converting them to Admiral shares. I'll take the 0.08% savings for a cruise to Mexico! Both Schwab and Fido will give you an incentive to open new accounts, we collected on Schwab last year for about $3000 cash. VG will not, but has lower fees for Flag Ship services over 1M household assets. I will be keeping all 3 in some form primarily for emergency need for Brick and Mortar, some monthly sales pitch breakfasts, and no-foreign fee cards etc.

 

[braumeister]

All three have accounts of mine. All are different but I wouldn't try to steer you away from any of them.

Fidelity wins hands down for customer service and great website resources. They have the biggest chunk of my investments. Also, their local B&M office is great.

Schwab gets the convenience award. I love their debit card when I travel -- no foreign transaction fee, no ATM fees.

Vanguard has crappy customer service (at least in my experience), but good low-cost offerings that make them a worthwhile choice.

 

[Midpack]

So that there's no misunderstanding, Schwab's and Fidelity's brick and mortar sites do NOT detract from their on line performance. In fact, many consider them superior in their on line performance, especially for traders and researchers. Their brick and mortar locations are an extra, not a substitute for, complete on line services.

There are solid reasons for choosing Vanguard over the others, but I don't think their on line performance is one of them.

I don't disagree. But all in all, Fidelity and certainly Schwab cost more than Vanguard. That's why I said you get what you pay for. If you need more handholding, Fido & Schwab are better, as are their online tools, though Vanguard has closed the gap. If you need less handholding, Vanguard 'skims less' off your returns.

 

[Al in Ohio]

I have both Fido and VG. Most of my portfolio is in Fido. The online tools for Fidelity are second to none. You can also now have Vanguard fund holdings within your Fido portfolio, but they won't be Admiral shares at any amount. So I hold VG Wellesley in both a VG taxable account and a Fido rollover IRA account for example

And yes, Fido has exceptional customer service imo.

Sent from my iPhone using Early Retirement Forum

 

[MichaelB]

I've used the Fidelity office. My primary bank doesn't have a brick and mortar location nearby and we have needed a medallion signature guarantee a number of times, which Fido has been happy to provide.

 

[rodi]

I don't disagree. But all in all, Fidelity and certainly Schwab cost more than Vanguard. That's why I said you get what you pay for. If you need more handholding, Fido & Schwab are better, as are their online tools, though Vanguard has closed the gap. If you need less handholding, Vanguard 'skims less' off your returns.

I'm not sure about that. It varies from fund to fund.

ER for VTSMX = 0.17%
ER for FSTMX = 0.10%
ER for SWTSX = 0.09%

All are total stock market index funds.

We have money at all three places. I have a rolled 401k at Fidelity that's not huge. I have the bulk of the money at Schwab. And my husband has a rolled IRA at Vanguard. The kids 529's are at Vanguard.

Vanguard was awful when my dad died and we needed his accounts converted to beneficiary IRAs. They literally lost 3 death certificates. This was in early 2008 and we had NO access to the funds due to their incompetence. They finally acknowledge receipt of the 4th death certificate about 5 months after we started the process. Then when I went to convert 529's that my dad had started for my sons to my name they acknowledged they had a copy of the death certificate, but needed another one. Sure enough it took TWO tries to get that taken care of. I"m now convinced they shred incoming death certificates randomly. But they have good funds, low fees, and serve a purpose. I know folks who've had no issues acting as executor and dealing with Vanguard accounts... Our experience was not so fun.

We were also dealing with Schwab at the same time and they did things flawlessly. My sister switched all of her accounts to Schwab, and I switched a lot of my account to Schwab.

 

[youbet]

. But all in all, Fidelity and certainly Schwab cost more than Vanguard.

I'm not sure there is any real difference. Remember, we're NOT talking about ER's as reflected in the funds they each sponsor but about the costs of doing business with the brokerage such as trading commissions, fees, etc.

[/I] If you need more handholding, Fido & Schwab are better, as are their online tools, though Vanguard has closed the gap.

Actually, I think the gap has been widening. Since you're a buy-and-hold "indexer," you're probably not aware since a quick once a year rebalance between your two or three Vanguard funds is all you do. But some like to actively trade some portion of their assets (in my case a small portion) and use the web site features much more frequently.

If you need less handholding.

Again, a buy-and-hold indexer, by definition, isn't going to have any questions or need many site features.

I think you make a good case for Vanguard for buy-and-hold indexers but less so for anyone more actively involved. But, in any case, I see pros and cons to any of the brokerage houses and clients need to keep those in mind when making their choice.

The main reason I like to see alternatives to Vanguard brought up and discussed is that the "boglehead" groupies have established a cult-like following for Vanguard funds which trickles over to the Vanguard brokerage. While I agree that there are several (Wellesley comes to mind) of the actively managed Vanguard funds that are tough to duplicate and very desirable, the Vanguard brokerage business has its upsides and downsides. The downsides are negligible for a buy-and-hold, broad market indexer but some are apparently significant for more active investors or folks with special needs from time to time.

 

[big-papa]

I had money in all 3, but dropped Schwab last year. They were my first brokerage account from back in the days when I traded individual stocks. I stopped doing that years ago but kept money there in a balanced fund. The amount wasn't that much compared to what I had in the other two, so in the interest of fewer things to manage/watch, I closed the account and moved the funds to Vanguard. I'm probably something like 70/30 Fido/Vanguard at this point with Vanguard being only taxable accounts and Fido being Taxable, my current company's 401K and our rollover IRA's.

 

[MRG]

Fidelity for all but what remains of my 401K. It will get rolled probably to Vanguard when I'm 59.5. Till then I have penalty free withdrawals available through it. The portion I control is all in Vanguard funds anyway.

Only negative to Fidelity is they're happy to put you in active more expensive funds. I needed to mention index funds then all was good. Fido's tools rock as does their platform.


Rodi sorry to hear about your issues with death certs. While I'm not a Vanguard lover the death certificate issue could have happened(and does) at any fund company. I remember how those things are handled and it's the most error prone process I've ever seen. Of course when someone explained what the fund company needed to do, as ugly as it was, sadly it made sense. I recall newer technology that was supposed to help that issue, no idea if it's been successful.

 

[bingybear]

I have accounts at all 3. Least @ Vanguard and most a Schwab. There are many +/-. To provide any real kind of recommendation depends really on what you are looking for in a brokerage.
I like Schwab's research. I like Fido RIP more than Schwab's online version (reps have a better one they use). Both are available in brick and mortar in my town.

So what is your investing style? How much assistance do you need? Any hand holding? Do you set an allocation and just re-balance periodically?

All of them are good brokerages. just depends what you value.

 

[target2019]

All three have accounts of mine. All are different but I wouldn't try to steer you away from any of them.

Fidelity wins hands down for customer service and great website resources. They have the biggest chunk of my investments. Also, their local B&M office is great.

Schwab gets the convenience award. I love their debit card when I travel -- no foreign transaction fee, no ATM fees.

Vanguard has crappy customer service (at least in my experience), but good low-cost offerings that make them a worthwhile choice.

You've done a good job of assessing + and - for each.

Lately, I've dealt more with Schwab and Vanguard. I have this opinion. If you need personal contact and hand holding, can't beat a visit to the Schwab office, if one is nearby.

I use Schwab and Vanguard web sites regularly. Schwab has been easier to deal with as far as setting up bank transfer capability.

Still, Vanguard is a significant part of the plan. Although I fear the company is evolving into something other than what Bogle established.

An example of customer service: Kid was overseas and I was able to transfer $1k from my checking to kid's Schwab savings in less than five minutes on a call.

 

[skibum]

I have used all 3 and prefer Fidelity for customer service, online interface, and brick and mortar. I meet periodically with an account mgr who understands my low fee investment goals and offers excellent advice without trying to sell anything.

I picked up a nice cash incentive of $1,200 on the last IRA transfer to Fido. Look into this if you choose to invest there.

https://rewards.fidelity.com/offers/friendsandfamilyoffer1

 

[PapaBear67]

Thanks to all for such a fantastic response. So much good data to digest.

We gave PNC Wealth Management a chance to pitch today. We talked in some generalities today. The managed account talk was too high a fee and he knew it as soon as it came out of his mouth. PNC Investments does have a self managed account product. He also pitched and FDIC Insured CD made up of several ETFs, run by Goldman, actively rebalanced monthly. 5yr 9 mo term, averaging ~5% annually (net of fees) in past performance. No management fee from PNC. Something to consider if I can set up a step ladder set of insured CDs. In ~5 years, as they mature, I can harvest the gains and reinvest the principal n the back end, creating a revolving income stream. I'm wary of such a complex product but the FDIC insurance of the principle is interesting.

Setting up a Schwab and Fidelity interview for later this week. Depending on how they go, I may or may not consider Vanguard at this time. I kind of want the flexibility to have stocks and ETFs in the portfolio, and I think some hand holding being available may be good. As I evolve into being an expert, I can look at Vanguard. (We do live very close to Valley Forge. My wife works les than a mile from their HQ. Actually almost took a job with them 15 years back.)

Again... THANKS !!!!!!!

 

[bingybear]

you can own individual stocks at Vanguard as I recall. That said, I have not seen a lot of stock research on their site... not that I have searched.
If you are looking for someone to become a FA and just do you're investing... it will likely be above your 0.25%. However, if you want someone to aid you at coming up with a portfolio and style. Admittedly someone bog standard approach... but that is not all bad.
One of my concerns is what to do when I'm no longer able to run my investments. Will DW take it over? Who will she trust? So as you become an expert... this is something you may want to consider.

 

[Midpack]

You can hold stocks at Vanguard. And Vanguard does offer handholding web, phone, email - but not as much as Fido and Schwab.

It appears my perspective on fees may have been out of date.

However, "I'd recommend you first decide what you want your asset allocation to look like now and the foreseeable future, and determine specifically what funds-stocks-other investments you want to hold. Then choose the firm that has the holdings you want, with the right combination of fees and service you require (it's a tradeoff, you get what you pay for). Choosing a firm first doesn't make sense to me."

 

[45th Birthday]

We had bad experiences at Vanguard as well. Very customer-unfriendly policies, bad back office, and no contact from our rep (despite having $7+ million there).

All of it is now at Fidelity. Very happy there. Great online tools, good local office staff, and you can hold Vanguard funds (not Admiral). No wrap fee required.

I second the idea of looking into their bonus offering for new money. You have to ask; it isn't automatic.