Vanguard, Fidelity or Schwab?

[Koolau]

That's silly. All an employee would need to do is to put their 401k in a couple balanced funds and reinvest all dividends and then leave it in the same and set up automatic withdrawals on the way out. Unfortunately, the employer can't give investment advice but it could be done very easily as long as the 401k has one or more good balanced fund choices.

"Silly" to you, perhaps. Puzzling and perplexing and even frightening to a ton of hourly and exempt w*rkers. Funny how "silly" people seem when they don't know what you know. It's easy to call them "silly" because they are not as smart or knowledgeable as you are. "Silly" is an imprecise word with loads of connotation that may not be merited. You've been doing this for what? 30 years? Imagine you're a brick layer who was expecting a pension and suddenly your boss says "you handle it." Now THAT's silly.

Lots of financially ignorant folks get into the "investing" business for the first time and then panic and sell out. That's doubly bad for someone in a 401(k). Call these people "silly" too, I guess. They should be "smart enough" not to do something so "silly." Right?

 

[Ian S]

I’ve considered transferring some assets from Vanguard to Fidelity, but I am not willing to eat a taxable event or pay any future transaction fees to do so. I can move IRAs without a problem if I’m willing to convert to Fido funds, but not taxable (all in VG funds) as far as I can tell. I either have to sell VG funds and buy similar Fido funds (huge tax hit), or accept transaction fees on my VG funds. What am I missing?

My understanding is that transaction fees for mutual funds are only on the buy side. You can sell without charge. So you can transfer and keep your Vanguard funds at Fidelity just not add to them although dividend reinvestment is also no charge I believe.

 

[easysurfer]

My understanding is that transaction fees for mutual funds are only on the buy side. You can sell without charge. So you can transfer and keep your Vanguard funds at Fidelity just not add to them although dividend reinvestment is also no charge I believe.

That's how I'm approaching with the remainder of my Vanguard funds. When rebalancing, I'll sell some of these to decrease my VG holdings. Hopefully in my lifetime I'll eventually part with them all.

 

[Al18]

I read this thread, but didn’t see one comment from a new Vanguard customer. That’s a problem.

Fidelity made it easy to convert a 403b annuity to a RolloverIRA. It took a few weeks, but it was handled.

I’ve been a Fidelity customer since the 90’s. I really like Fidelity’s website, which is very comprehensive on IRA’s, brokerage accounts, CD’s, etc. if you have a Fidelity 401k - all of your assets show up on one page. If you want to show your spouses account, that’s a simple preference setting for view only or view and manage.

 

[audreyh1]

My understanding is that transaction fees for mutual funds are only on the buy side. You can sell without charge. So you can transfer and keep your Vanguard funds at Fidelity just not add to them although dividend reinvestment is also no charge I believe.

Yes, no transaction fee for dividend reinvestment.

 

[Texas Proud]

I hearya and the pilot analogy is a bit extreme in an attempt to humor but almost everyone I know is very nervous about making decisions for their 401k. They are nothing like the forum members here who embrace the opportunity.

I will disagree a bit... I have met a few who would not invest because they did not know what to put it in... I said just put it all in a dated retirement fund on what year you plan to retire... let them take care of everything until you get comfortable in doing something else... most everyone I mentioned this to did that...


It is starting the is the big problem for most.. they cannot see not getting all their money right now... that is why they started the opt out option where you were automatically enrolled and had to opt out...

 

[Landolink]

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.

 

[HarveyS]

I get this at Fidelity also.

No problem getting a hold of a live person via phone at Fido for me, either.

 

[pb4uski]

"Silly" to you, perhaps. Puzzling and perplexing and even frightening to a ton of hourly and exempt w*rkers. Funny how "silly" people seem when they don't know what you know. It's easy to call them "silly" because they are not as smart or knowledgeable as you are. "Silly" is an imprecise word with loads of connotation that may not be merited. You've been doing this for what? 30 years? Imagine you're a brick layer who was expecting a pension and suddenly your boss says "you handle it." Now THAT's silly.

Lots of financially ignorant folks get into the "investing" business for the first time and then panic and sell out. That's doubly bad for someone in a 401(k). Call these people "silly" too, I guess. They should be "smart enough" not to do something so "silly." Right?

Actually, upon further thought, we already have a solution to that. Recently employees are automatically enrolled in their employer's 401k, typically at 3%, but they can opt out or change their contribution rate. The default investment for those contributions is usually a target date fund.

So it would be even easier than what I previously described... all they need to do is select a target date fund. A brick layer can do that.

 

[DrRoy]

Many, many years ago, I had accounts at Fido and Vanguard. I definitely liked the low fees at Vanguard. When Fido basically matched the fees, I consolidated my accounts there because they had broader services. It's been over 40 years total now and I have been very happy with the service there, and have heard various complaints about Vanguard here.

 

[eytonxav]

I prefer Fidelity due to their website, phone reps and breadth of offerings.

 

[frayne]

"Silly" to you, perhaps. Puzzling and perplexing and even frightening to a ton of hourly and exempt w*rkers. Funny how "silly" people seem when they don't know what you know. It's easy to call them "silly" because they are not as smart or knowledgeable as you are. "Silly" is an imprecise word with loads of connotation that may not be merited. You've been doing this for what? 30 years? Imagine you're a brick layer who was expecting a pension and suddenly your boss says "you handle it." Now THAT's silly.

Lots of financially ignorant folks get into the "investing" business for the first time and then panic and sell out. That's doubly bad for someone in a 401(k). Call these people "silly" too, I guess. They should be "smart enough" not to do something so "silly." Right?

Excellent points and all true. I remember back in the day when my company did away with the pension plan and a 401K menu of options was offered with little to no financial education of the fundamentals of investing or the mutual fund minefield. Many choice were made solely on the name of the fund with no consideration to frontend/backend loads, expense ratios, turnover or even what stocks were held by the fund. I remember my company's menu of choices had zero index funds. In talking to the younger generation today, I don't think much has changed.

 

[Phroig]

Yes, no transaction fee for dividend reinvestment.

You can also avoid most of the $75 fee by using auto invest, which is only $5 for transaction fee funds. You can start auto invest, invest once, then cancel.

 

[starry night]

US News and World Report

Someone at USNews and World Report must be reading this forum.
On the same day this stream began, they dropped this:

https://money.usnews.com/investing/funds/articles/vanguard-versus-fidelity-which-is-best-for-you

 

[Texas Proud]

Many, many years ago, I had accounts at Fido and Vanguard. I definitely liked the low fees at Vanguard. When Fido basically matched the fees, I consolidated my accounts there because they had broader services. It's been over 40 years total now and I have been very happy with the service there, and have heard various complaints about Vanguard here.

I agree with you... many years ago Vanguard was the clear winner as the cost structure was so much better than everybody else...


But times have changed... Schwab came in as a low fee broker... this started the whole industry down a path of low costs... Not sure who was first but a couple of years ago it went to zero commission on stock trades... and everybody followed... and Vanguard was slow to follow BTW...


Now there is little to no cost advantage that Vanguard has... so it is now services that sway people on where to park their money... and Vanguard is lacking... the question is that enough to move money out of there?


If you are like my oldest sister then no... she just lets the money sit and grow... her interaction with Vanguard is to get her RMDs (which I do for her anyhow).. so if you are a really passive investor there is little to no difference in these three... so no reason to change...

 

[Koolau]

Someone at USNews and World Report must be reading this forum.
On the same day this stream began, they dropped this:

https://money.usnews.com/investing/funds/articles/vanguard-versus-fidelity-which-is-best-for-you

I think the article confirms why I stick with Vanguard - even though I'm pi$$ed at them right now for their paperwork policy. I'm "hands off - let it ride - rarely make a change - cheapest funds - call or check my accounts once a year kinda guy." I don't need the advantages that Fido offers over Vanguard. YMMV

 

[easysurfer]

I think the article confirms why I stick with Vanguard - even though I'm pi$$ed at them right now for their paperwork policy. I'm "hands off - let it ride - rarely make a change - cheapest funds - call or check my accounts once a year kinda guy." I don't need the advantages that Fido offers over Vanguard. YMMV

Also depends on how you look at things. I read something recently (actually was from Fidelity) about security. One point of the read was that having everything digital (including statements) is more secure. No risk if statements falling into the wrong hands by a sloppy mail carrier or something.

So, VGs paper policy that's getting to you may actually be a blessing in disguise. All a matter of perception .

 

[Badger]

If you are like my oldest sister then no... she just lets the money sit and grow... her interaction with Vanguard is to get her RMDs (which I do for her anyhow).. so if you are a really passive investor there is little to no difference in these three... so no reason to change...

I may be misunderstanding but Vanguard will do automatic calculations for RMD and make the payment for her. You can choose the number of payments and when to make them. I just have it done once a year to keep it simple.

Cheers!

 

[Koolau]

Also depends on how you look at things. I read something recently (actually was from Fidelity) about security. One point of the read was that having everything digital (including statements) is more secure. No risk if statements falling into the wrong hands by a sloppy mail carrier or something.

So, VGs paper policy that's getting to you may actually be a blessing in disguise. All a matter of perception .

Yeah, I think that's a good point. Honestly, my biggest thing is I want my 1099s or whatever is generated for reporting to IRS to be hard copy. Otherwise, I can adapt. I'm getting ready to call V to ask about all that and switch over.

I'm probably going to buy a laser printer for my reports.

I just don't like to change things, I guess - which is also why I like Vanguard (heh, heh, most of the time.)

 

[Whisper66]

I read this thread, but didn’t see one comment from a new Vanguard customer. That’s a problem..

Not sure why it's a problem but I'll comment to add some perspective. While I'm personally a very happy, very long time Vanguard customer, the business numbers suggest to me that all three companies (VG, Fidelity, Schwab) are good choices for many folks and that VG continues to get a good share of the new customers. .... For example, some 2022 numbers posted in a The Motley Fool article.....



2022 Assets Under Management: VG is the largest with 8.1 Trilion vs Schwabs 6.6, Fidelity 3.6.


2021 to 2022 Change in AUM: VG is the only one which increased with rise of 14.08% (with 30+M "investors"...change year to year not reported) while Fidelity dropped 14.85% (though # of active accounts grew 4% to 35.6M brokerage accounts) and Schwab dropped 13.32%. (though # of active accounts grew 11%, 34 M brokerage accounts).



Source: https://www.fool.com/the-ascent/res...:~:text=Vanguard is one,more: Vanguard Review

 

[Koolau]

Not sure why it's a problem but I'll comment to add some perspective. While I'm personally a very happy, very long time Vanguard customer, the business numbers suggest to me that all three companies (VG, Fidelity, Schwab) are good choices for many folks and that VG continues to get a good share of the new customers. .... For example, some 2022 numbers posted in a The Motley Fool article.....



2022 Assets Under Management: VG is the largest with 8.1 Trilion vs Schwabs 6.6, Fidelity 3.6.


2021 to 2022 Change in AUM: VG is the only one which increased with rise of 14.08% (with 30+M "investors"...change year to year not reported) while Fidelity dropped 14.85% (though # of active accounts grew 4% to 35.6M brokerage accounts) and Schwab dropped 13.32%. (though # of active accounts grew 11%, 34 M brokerage accounts).



Source: https://www.fool.com/the-ascent/res...:~:text=Vanguard is one,more: Vanguard Review

People voting with their money. Speaks louder than advertising or people opining on a Forum.

 

[Texas Proud]

I may be misunderstanding but Vanguard will do automatic calculations for RMD and make the payment for her. You can choose the number of payments and when to make them. I just have it done once a year to keep it simple.

Cheers!

Yes, we have that... but she wants to know the amount and sometimes withdraws before year end for a larger purchase... such as a cruise that she just called me about...

 

[Texas Proud]

I read this thread, but didn’t see one comment from a new Vanguard customer. That’s a problem.

Fidelity made it easy to convert a 403b annuity to a RolloverIRA. It took a few weeks, but it was handled.

I’ve been a Fidelity customer since the 90’s. I really like Fidelity’s website, which is very comprehensive on IRA’s, brokerage accounts, CD’s, etc. if you have a Fidelity 401k - all of your assets show up on one page. If you want to show your spouses account, that’s a simple preference setting for view only or view and manage.

I did not comment earlier... but decided to do so now...


One reason is that most here have been customers with VG for years (heck, decades)... back then it was the clear winner...


There must be a huge number of new customers as they are far and away the largest AUM broker... (is Blackrock a broker?)....

 

[Texas Proud]

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...

 

[Phroig]

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