Vanguard, Fidelity or Schwab?

[LiveBelowMeans]

I have been very happy with Schwab. What impresses me the most is the COMPETENT service reps. JMHO

 

[Midpack]

A pretty revealing chart from the link above (thanks). Even though I’m a DIY investor who rarely needs to talk to VG live, I am a little concerned that VG is risking outflows with their declining customer service. It appears they’re not losing customers through 2022 at least, quite the opposite. Probably their long standing reputation but they can’t rely on that forever.

While Dr B acknowledged VG customer service has deteriorated, he also suggested Fido and Schwab aren’t going to provide present levels of service indefinitely without getting paid for it somewhere. Fido makes plenty on active funds and stock traders to offset the lack of income on low/zero fee index funds - but they’re a business and won’t tolerate a free ride from their passive investors forever.

He seemed to be saying Schwab doesn’t have as much active business to offset index funds. He said 134% of their 2019 income was interest, which means a loss on the rest in case you missed that?

I’ve been on the fence about moving some of our VG accounts to Fido for years - without acting on it.

I don’t know, time will tell.

 

[Texas Proud]

It is interesting to see these tables...


Seems Fido has more clients... and AUM if you believe them...


https://investingintheweb.com/brokers/largest-online-brokers-by-aum/

(well, not good at copy and paste tables)


Largest Online Brokers by AUM in 2023



Brokerage firm AUM Date Reported Users AUM Reference

Fidelity $11.1T Mar-2023 40M+ Fidelity AUM
Vanguard $7.2T Dec-2022 30M+ Vanguard AUM
Charles Schwab* $7.05T Dec-2022 34M+ Charles Schwab AUM
JP Morgan $2.2T Sep-2022 Not disclosed JP Morgan AUM
E*trade (Morgan Stanley)** $1.3T Dec-2022 Not disclosed E*trade AUM
TD Ameritrade $1T Sep-2022 11M+ TD Ameritrade AUM

 

[jollystomper]

As I am a simple low-transaction investor, customer service does not impact me much. I have Fidelity accounts since my Megacorp 401K started there, and Vanguard when I came to my senses in the late 1990s )), stopped with all the stock trading, and started investing in broad market index funds.

I would have had Schwab since my individual stocks were in a TD Ameritrade account, but to simplify things I moved them over to Fidelity (just t the right time as Schwab waived the TD Ameritrade account transfer fee just before it would have converted it to a Schwab account).

I have been on the phone with Fidelity customer service and they have been fine, not perfect but no issues that stick in my my as a "peeve". I have never done anything at Vanguard that required calling anyone so I have no experience with the phone support. The transition from mutual funds to brokerage accounts was automatic and we had no issues.

Outside of my 401K, I have about 20% more in my Fidelity accounts than y Vanguard. I get timely statements from them, so I will likely just stick with the two. I do have one other mutual fund account institution (American Century) which does not measure up to the other two. I will eventually move that money to either Fido or Vanguard, once I am ready to bite the bullet on the capital gains hit that will occur.

 

[MRG]

It is interesting to see these tables...


Seems Fido has more clients... and AUM if you believe them...


https://investingintheweb.com/brokers/largest-online-brokers-by-aum/

(well, not good at copy and paste tables)


Largest Online Brokers by AUM in 2023



Brokerage firm AUM Date Reported Users AUM Reference

Fidelity $11.1T Mar-2023 40M+ Fidelity AUM
Vanguard $7.2T Dec-2022 30M+ Vanguard AUM
Charles Schwab* $7.05T Dec-2022 34M+ Charles Schwab AUM
JP Morgan $2.2T Sep-2022 Not disclosed JP Morgan AUM
E*trade (Morgan Stanley)** $1.3T Dec-2022 Not disclosed E*trade AUM
TD Ameritrade $1T Sep-2022 11M+ TD Ameritrade AUM

There's a lot of ways people count chickens and eggs. Without a methodology behind the count, we can all claim things that are true but not at all truthful.

I don't know if they're including institutional money or investors. Are investors people or accounts(some companies report accounts). With any of these reports, I wonder what happened to all the monies in American Funds because they are not listed. They were #2 before the 2008 fiasco, where did their assets go. I suspect they have no brokerage, so they aren't counted. What about Vanguard's mutual fund only system? It's not a brokerage. Do those assets count?

I get so confused by simple charts.

 

[teej1985]

As I am a simple low-transaction investor, customer service does not impact me much. I have Fidelity accounts since my Megacorp 401K started there, and Vanguard when I came to my senses in the late 1990s )), stopped with all the stock trading, and started investing in broad market index funds.

I would have had Schwab since my individual stocks were in a TD Ameritrade account, but to simplify things I moved them over to Fidelity (just t the right time as Schwab waived the TD Ameritrade account transfer fee just before it would have converted it to a Schwab account).

I have been on the phone with Fidelity customer service and they have been fine, not perfect but no issues that stick in my my as a "peeve". I have never done anything at Vanguard that required calling anyone so I have no experience with the phone support. The transition from mutual funds to brokerage accounts was automatic and we had no issues.

Outside of my 401K, I have about 20% more in my Fidelity accounts than y Vanguard. I get timely statements from them, so I will likely just stick with the two. I do have one other mutual fund account institution (American Century) which does not measure up to the other two. I will eventually move that money to either Fido or Vanguard, once I am ready to bite the bullet on the capital gains hit that will occur.

Why can't you just ACATS transfer the American Century holdings to either Fidelity or Vanguard?

 

[lem1955]

I started with Vanguard in the 1980's and have stuck with them. Maybe it's the history I have with them, but I find it easier to research, compare and find the funds I want in their website easier than in Fidelity. I only have my Health Savings Account at Fido because Vanguard doesn't provide for H.S.A.'s. I like the low expense ratios, am happy to not get paper statements and confirmations, don't miss the Flagship Rep I used to have for free, and like the consolidation, and ease of download to Quicken for Mac.

 

[Al18]

According to the Fidelity link above, the 11.7 Trillion is assets under administration. The previous article referenced above listed 3.6 Trillion assets under management.

I interpret these terms as a DIY investor with a brokerage account, a cash management account, an IRA and a RothIRA as having 0 assets under management.

 

[pb4uski]

When I soured on Vanguard is when, at their urging, I converted a couple trust accounts from mutual fund accounts to brokerage accounts and they insisted on new notarized forms for bank accounts desite the fact that the mutual fund accounts had had the exact same bank accounts linked to the mutual fund accounts for decades. A number of similar frustrating customer service issues, having to get transferred to 3 or more CSRs to finally find one who had a clue, etc caused me to look elsewhere. Very happy to be done with their terrible customer service.

 

[MarieIG]

I have accounts at Vanguard, TD Ameritrade and more recently Fidelity.

I like the Vanguard sweep account - and yes, for me sweep does matter. Vanguard CS has declined. More recently, the telephone wait time is awful - and I do not provide incoming calls with any portion of my SS# or account numbers so I don't do call backs. Recently, I queried as to why when I did a Roth conversion of a stock or ETF, I got the end of the day price instead of the time of conversion price - the rep didn't know and couldn't find anyone else who did. I noticed that when I tried to look (current) Flagship benefits, there was a notice that I could call in and speak to a rep regarding available benefits.

Also, the other day at Vanguard, I put in an order to sell a money market account, and then entered an order for a bond - and it was not accepted. (Previously, it would have been as along as the sell order on the Vanguard money market fund had been submitted.) I had to log in the next day to resubmit the order. There is good information on Vanguard funds but -updated information/ news - on non-Vanguard holdings is almost nonexistent (besides a prospectus). Vanguard does allow fractional purchases of Vanguard funds, if one is so inclined.

TD has the best research option. Their Think or Swim is being transferred to Schwab, but not their educational videos (which I enjoy). I was also told that the watch list is not being transferred. TD kept better cost basis for my holdings than Vanguard, and actually was able to get the cost basis on some holdings that I transferred from Vanguard - which Vanguard could not establish. I have a dedicated Schwab rep for my TD account and she is good. TD has the Schwab sweep account which, did I mention, I loathe.

I am new to Fidelity and do not have a large account there. Their sweep is slightly inferior to Vanguard but much better than Schwab. There is a nice cash account option which gives you free checks if you want. The wait time for CS is light years ahead of Vanguard. In my experience, the reps are helpful, but are not as knowledgeable as Schwab. It appears that you can do Roth conversions on fixed income instruments, which is a problem with Vanguard.

I have local Fidelity and Schwab offices, and have been to both. I probably will be toddling into Fidelity sometime next week (due to printer/ scanner issues - and besides they have good coffee).

I'm not closing any of the accounts for the time being.

 

[TheWizard]

AUM is not related to brokerage customer satisfaction. Many Fidelity and Schwab clients own Vanguard ETFs.

I even own a large amount of two Vanguard Institutional index funds in my TIAA 403(b) account...

 

[TheWizard]

BTW, I am finding some problems with Schwab... I have been looking for some preferred shares and when I put in the ticker I do not get the info I would like to see... some are blank on the detail of the share... Fido has all the info..


As an example I am looking at EBBGF and Schwab show $15 something but the real price if you start an order is close to $21... Fidelity has the correct price and gives the yields...


For AGRIP schwab has a zero for the price...


Soooo, everbody has their flaws... just have to live with the ones you hate the least...

Both EBBGF and AGRIP show up fine in my Vanguard app and I could put in a limit order to buy either at zero commission.
But I have no idea what those two funds are, so I won't...

 

[Texas Proud]

Both EBBGF and AGRIP show up fine in my Vanguard app and I could put in a limit order to buy either at zero commission.
But I have no idea what those two funds are, so I won't...

They are preferred shares, not funds... I can buy at Schwab but in their research section they have nothing on them...


Just looked at VG and they are also lacking... BUT... there was a link to their 'Bold New Look' and it actually looks nice... some big text etc but it might be good... however, doing research in VG to me seems hard... I cannot find anything to search for what I want... I know they are big into funds but I am looking for individual bonds...

 

[Ian S]

I'm in the process of consolidating my various accounts. I had an IRA account with Vanguard up until a few years back when I transferred it to Fido. Never really warmed up to Vanguard and didn't really want another brokerage account when they started pushing that change. Currently, for investments, I have Fido, TD, Corebridge/VALIC, and a small fairly new account with Schwab. TD gets transferred to Schwab on Labor Day weekend and I'll soon be closing/transferring the Corebridge account to Fido. I'll see how I like Schwab and eventually consider consolidating to one firm. I also have a few bank/C.U. accounts that will be consolidated to one here and one in another country. Gotta make things simple for DH should anything happen to me!

 

[Midpack]

Like others I probably wouldn’t choose Vanguard today, but I wouldn’t gain anything by switching now, and I’d face tax or (minor) fee issues moving accounts. Vanguard funds are still rock solid and their website and documentation is all I need, even if Fido has mo’ better online tools.

I’ve probably called Vanguard 5 times in 20+ years, but I have noticed it’s been harder to get answers each time, and it’s MUCH harder even find a phone number or then connect with anyone live. OTOH Vanguard is going to lose customers eventually if they continue to let service deteriorate. YMMV

 

[teej1985]

Like others I probably wouldn’t choose Vanguard today, but I wouldn’t gain anything by switching now, and I’d face tax or (minor) fee issues moving accounts. Vanguard funds are still rock solid and their website and documentation is all I need, even if Fido has mo’ better online tools.

I’ve probably called Vanguard 5 times in 20+ years, but I have noticed it’s been harder to get answers each time, and it’s MUCH harder even find a phone number or then connect with anyone live. OTOH Vanguard is going to lose customers eventually if they continue to let service deteriorate. YMMV

If you have a sizeable balance, Fidelity or Schwab would most likely pay you something, so you would gain $$$.

 

[Turkey Tom]

Suggest Fidelity

Just finished The Four Pillars of Investing Second Edition, and pgs 276-277 give the most concise but informative summary of the majors I've ever read - some I've heard, some I hadn't but never so clearly stated. I would love to share it word for word, but I've been correctly advised that's too close to copyright infringement. This doesn't have near the impact, but a few tidbits:

• Pay attention to the number of securities held by any fund or ETF. e.g. two similar sounding funds at differing firms one has 855 holdings while an other has 7881.
• Limit your purchases of open-end funds to those of your custodian (Vanguard, etc.)
• When this book went to press a couple months ago, the default sweep fund yield at Schwab was 0.40% vs 3.7% at Vanguard or Fidelity - in 2019 134% (not a typo) of Schwabs earning came from net interest. If you have money that sits in cash, allocation or between trades, for whatever reason...
• Fidelity offers low fees on index/passive funds to lure investors into active funds. And check fees closely, some Fido funds that sound almost the same have substantially different fees.
• The author acknowledged elsewhere "customer support at Vanguard has deteriorated." He also says "how long this free ride (customer service) at Fido and Schwab will last is anyone's guess, so enjoy it while it lasts."
• Competition among the three will only intensify, so stay tuned, as their relative advantages and disadvantages can easily change.

Again, the actual text is FAR better than my summary...

Some experience with Vanguard and Schwab. Suggest Fidelity. Vanguard does not appear "user friendly". Schwab removed auto payment for trades from their money markets. View as unethical because trade issues and/or this setup require users to hold cash which provides benefit to Schwab. Fidelity has "settlement" money market funds. Good for clean trade settlements. Fidelity has some good mutual funds which are transaction free from Fidelity platform. ETF access appears same on all platforms.

 

[temartin]

Just moved a bunch to Fidelity

We had almost everything at Schwab for years, recently have moved a huge chunk to Fidelity. Wanted to simplify cash management and Schwab sweep funds are poor, Fidelity sweeps are around 4.9% right now. Got tired of moving cash in and out of Schwab MMF to get a decent rate, now it's automatic at Fido. Also can use Fidelity cash balance to write checks and pay bills, all while it's earning decent rates.

The final straw was that Schwab started requiring me to call in and verify each external transfer to "online only" banks (their term). I guess as has been reported in the news lately, they are trying to stem cash movement out. Maybe they should just pay a decent rate on cash, eh?

 

[Retired2016]

I’ve always been a Vanguard guy but I manage my parents finances and quickly have learned the importance of having a local office. I had a bad experience with Morgan St and then E-trade regarding my parents finances.

I had power of attorney at MS but did not at E-trade. Became a nightmare and money was frozen at E-trade. Long story. Finally, moved my parents money to Schwab and it’s been great. I will be opening an account at Schwab for my wife and I. If I get hit by a bus. She knows where to go.

Exactly! We’ve been with Vanguard for over 30 years and Schwab since 2019. I recently moved everything to Schwab because of a local office. A local office makes it way easier for the non-financial spouse or adult kids if something happened.

 

[orbops]

Likewise I moved all my Vanguard funds to Fidelity recently. I had to sell my admiral mutual funds from my 401K before moving. All my ETFs, T-Bills and even CDs moved in kind but a few fractional shares got sold. Vanguard charged $50 for the transfers and Fidelity gave me a nice bonus for the move. The bonus is paid after 60 days and allocated into the various accounts (tIRA, rothIRA and brokerage) based on value.

Good to know that Admiral shares need to be sold first. Did Vanguard charge $50 total, or per fund, or per account?

 

[JJpop]

Exactly! We’ve been with Vanguard for over 30 years and Schwab since 2019. I recently moved everything to Schwab because of a local office. A local office makes it way easier for the non-financial spouse or adult kids if something happened.

We switched to Schwab because they have a local office.
Their customer service agents are knowledgeable and actually nice.
They do not have the best of everything but they are excellent and a great option overall.
Their bank is also excellent.
For an older person not that well versed in investing like my wife, having that office nearby is very comforting to her.
Totally different vibe than Vanguard who we had in the past.

 

[orbops]

I am definitely switching to either Fidelity or Schwab this year once my TD Ameritrade account merges with Schwab.

I've been with Vanguard over 30 years, and am eager to switch since their customer service is now horrible for Flagship members. Long hold times of over 1-2 hrs, needing their manager to approve a Roth distribution that I requested verbally, finding out that same day wire transfers are only allowed up to 9:30AM PT, and waiting 5-7 days for an email response to a question. Fidelity has told me that I can get about $5K to transfer my account over to them.

Additionally, Fidelity offers more advanced trading like a trailing stop for stocks, while Vanguard doesn't. TD Ameritrade has thinkorswim, which I feel is one of the best stand alone applications in the industry.

 

[zzyp]

I lean more toward low fee index funds, the trades without purchase or sales fees, Schwab for instance. Do you compare your results to S&P index? Why not buy SPY or SPTM? No great decisions, but always have similar long term results. If you have trouble beating Dow-Jones or always doing as well over the long term, just do your trading with DIA, a low expense ratio index fund that tracks the Dow. I go year after year without my balance going down in my IRAs, due to the annual RMD, over the long term. I help out my IRA with Series I Savings bonds that change yield to automatically adjust for inflation, CDs don't (disadvantage is limit of $10K per year).

 

[Morgan22]

Good to know that Admiral shares need to be sold first. Did Vanguard charge $50 total, or per fund, or per account?

I've read (maybe on Bogleheads.org?) that some have been able to transfer Admiral shares to Fidelity.

Not sure if you know this, or if it applies, but don't sell funds in a taxable account. You could possibly be hit with a tax bill. You can have Vanguard switch your admiral shares to a lower class of fund with no tax consequences. Or you can convert to ETF's if you prefer, before moving assets to Fidelity.

 

[Phroig]

I've read (maybe on Bogleheads.org?) that some have been able to transfer Admiral shares to Fidelity.



Not sure if you know this, or if it applies, but don't sell funds in a taxable account. You could possibly be hit with a tax bill. You can have Vanguard switch your admiral shares to a lower class of fund with no tax consequences. Or you can convert to ETF's if you prefer, before moving assets to Fidelity.

Admiral managed funds won’t transfer, index funds will.