Fidelity or Vanguard

[2cheap2eat]

Hola from Ecuador (trapped on a REALLY long virus holiday, another story...)


I am thinking of consolidating my 3 brokerage accounts down to 2. Idea is to make it easier to manage my assets and have them in one place for quicker access when needed.



I am considering which to stay with - Fidelity or Vanguard. Fid is my preferred choice and kinda decided to move that direction for these reasons:


- Good service
- Free wires domestic and intl *

- Free WW ATM usage via fee rebate *

- Easy website to use
- Low cost trading (I don't do much though)
* very important


Brief search of VG didn't show the * features and I have less assets in there so it seems logical to consolidate with Fid.



So my question is: Does anyone have any ideas about why keeping the VG account open would make sense? Am I missing anything important about VG?



I have access to all VG Index funds via Fid and I don't do anything with VG other than check the balance regularly and get my 1099.

Seems like you’ve answered your own question
Since the Intl ATMs are very important, Fidelity is easy choice for you.

 

[OldShooter]

... Didn't even know Fidelity had local offices, just looked and they do have one about 30 minutes from me but I don't see any reason why I would want to go. ...

Depending on your asset level, Schwab and Fido (probably others too) will assign a specific rep to you. This can cut down on having to dial a call center and wait on hold to talk to someone who never heard of you and will almost certainly never talk to you again.

I make it a point to occasionally touch base with my Schwab guy, usually just on the phone but we do meet face-to-face maybe every couple of years. I also like to flip him a referral or two a year and maybe email a couple of jokes.

The result is that he knows who I am when I call and he is very responsive helping with administrivia. One time I was trying to wire some money to South Africa and for some reason Schwab bank could not/would not do it. He was a surprised as I was and dug into the problem immediately, solving it with a transfer from one of our taxable brokerage accounts. One other time I called him to ask Schwab's opinion on leveraged loans. Within an hour he had found and sent to me a recent position paper. I think I get this kind of service because I am not just some random voice on the phone.

The risk is that an assigned rep will try to sell you stuff. My guy knows to not do that. With a new rep you might have to do a little training.

So if I were you I would get a rep assigned at the local office, go to visit at least once, then stay in occasional telephone contact. Ask about free services, like portfolio analysis, that they may have for you.

 

[OldShooter]

... Since the Intl ATMs are very important, Fidelity is easy choice for you.

Same thing with the Schwab bank debit card. All ATM fees rebated worldwide and no foreign transaction fees. These three ponies run neck and neck on features and services IMO. If one pulls slightly ahead on something, the others will quickly catch up.

 

[davebarnes]

I am a Fido fan and not a Vanguard fan.
But, had a question about the Fido retirement planning tool and was informed that my advisor (Jared Mabey) was the one to talk with. He and I spoke today and he was useless. Now, I have to start bugging Fido for an answer.

 

[bada bing]

With FIDO the Johnson family owns it. With VG, investors do. Your choice though.

Vanguard's co-op ownership is often touted as a plus. I see it as a big minus. I have never gotten good service from a co-op, utilities being a prime example. A for-profit firm has natural incentives to run a tight ship that co-ops do not. My Vanguard experience is an example of that. I don't care if someone gets rich from providing me with exceptional service, I like it.

I had a Vanguard IRA account for about 10 years. I dropped them about 5 years ago. JMO, Vanguard as a custodian would probably be okay for a plain vanilla retail customer. I wouldn't trust them with anything remotely complicated. I have an individual 401K (at Schwab) and mega-backdoor Roth and non-qualified deferred comp plan at Fidelity through my employer. There is no way I would trust Vanguard with those

I do hold Vanguard investment products.

My preference in brokerage accounts is Schwab slightly ahead of Fidelity and the rest of the pack some ways back. I would choose whichever of Schwab or Fidelity has more convenient branch locations.

 

[mikeL]

Outside the USA Vanguard FAILS

At 55 years old I got laid off. I sold my house in New England and move to Florida temporarily at my daughter's house. I was excited about the early retirement. I had no strings attached. No mortgage no credit card balances. For my first year I decided to live in Thailand. It's inexpensive and exotic. I sold my car in Florida and moved.
One day I go online to my Vanguard account and sell some equities. I chose the replacement equities and tried to purchase them. The system told me to call them.

I certainly understand that most companies in the United States are unfamiliar with their clients traveling around the world on a long-term basis so I keep my address at my daughter's house and I don't tell anybody that I'm outside the United States because it raises unnecessary red flags.

Vanguard tells me that their security department has blocked my transaction. They had me speak to the security department and they told me they wanted me to prove that I lived in Florida at my address. I told them no problem I have a Florida driver's license and I'm registered to vote in Florida I can supply them with both.

They told me sorry we want a utility bill with your name on it. We want your credit card statement for whichever credit card I'm using to verify that I'm making local purchases.

I told them my story leaving out the Thailand portion. I told them I live in Florida at my daughter's house because I haven't reestablished myself with my own condo or home yet. I told them I don't have a credit card any longer nor do I pay with ATM cards. Now that I have no job and no income I use cash for everything so I cannot supply you with a credit card statement.

They told me I will not be allowed to access my account and perform any transactions until I do. The only thing they would let me do is close my account and move my money to my fidelity accounts.

Do not depend on Vanguard if you're spending any time outside of the United States!

 

[imp4]

I told them my story leaving out the Thailand portion. I told them I live in Florida at my daughter's house because I haven't reestablished myself with my own condo or home yet. I told them I don't have a credit card any longer nor do I pay with ATM cards. Now that I have no job and no income I use cash for everything so I cannot supply you with a credit card statement.

They told me I will not be allowed to access my account and perform any transactions until I do. The only thing they would let me do is close my account and move my money to my fidelity accounts.

Do not depend on Vanguard if you're spending any time outside of the United States!

Why not keep it simple and just tell the truth?

It seems like you incurred quite the hassle by layering false statements (by you own admission) on top of one another.

What if you had actually told the truth?

 

[MRG]

At 55 years old I got laid off. I sold my house in New England and move to Florida temporarily at my daughter's house. I was excited about the early retirement. I had no strings attached. No mortgage no credit card balances. For my first year I decided to live in Thailand. It's inexpensive and exotic. I sold my car in Florida and moved.
One day I go online to my Vanguard account and sell some equities. I chose the replacement equities and tried to purchase them. The system told me to call them.

I certainly understand that most companies in the United States are unfamiliar with their clients traveling around the world on a long-term basis so I keep my address at my daughter's house and I don't tell anybody that I'm outside the United States because it raises unnecessary red flags.

Vanguard tells me that their security department has blocked my transaction. They had me speak to the security department and they told me they wanted me to prove that I lived in Florida at my address. I told them no problem I have a Florida driver's license and I'm registered to vote in Florida I can supply them with both.

They told me sorry we want a utility bill with your name on it. We want your credit card statement for whichever credit card I'm using to verify that I'm making local purchases.

I told them my story leaving out the Thailand portion. I told them I live in Florida at my daughter's house because I haven't reestablished myself with my own condo or home yet. I told them I don't have a credit card any longer nor do I pay with ATM cards. Now that I have no job and no income I use cash for everything so I cannot supply you with a credit card statement.

They told me I will not be allowed to access my account and perform any transactions until I do. The only thing they would let me do is close my account and move my money to my fidelity accounts.

Do not depend on Vanguard if you're spending any time outside of the United States!

Do I understand correctly?

You attempted a trade while in Thailand and Vanguard blocked it? You understand they can "see" where you are? They likely locked your account fearing it's been hacked. Your physical address in Florida isn't == your IP in Thailand. Checks like this are common in financial applications and may go way beyond a simple ip.

When you talked to their security people you misinformed them about your whereabouts? Vanguard, like the rest of the industry, understands US citizens living abroad, certain parts of their processes depend upon it. How can tax reporting work for non residents if you don't allow for people living abroad? If you had told them they could have worked with you.The only thing that surprises me is they allowed you to transfer out.

 

[nwsteve]

FWIW, a third party source reported Investor Business Daily annual survey to rate online brokers in 15 categories including customer service, portfolio analysis and educational resources found Fidelity as overall winner. Schwab rated best on investment choice and website security.
Not clear if Vanguard was included (behind paywall) but often Vanguard is excluded from online brokers

 

[teejayevans]

At 55 years old I got laid off. I sold my house in New England and move to Florida temporarily at my daughter's house. I was excited about the early retirement. I had no strings attached. No mortgage no credit card balances. For my first year I decided to live in Thailand. It's inexpensive and exotic. I sold my car in Florida and moved.
One day I go online to my Vanguard account and sell some equities. I chose the replacement equities and tried to purchase them. The system told me to call them.

I certainly understand that most companies in the United States are unfamiliar with their clients traveling around the world on a long-term basis so I keep my address at my daughter's house and I don't tell anybody that I'm outside the United States because it raises unnecessary red flags.

Vanguard tells me that their security department has blocked my transaction. They had me speak to the security department and they told me they wanted me to prove that I lived in Florida at my address. I told them no problem I have a Florida driver's license and I'm registered to vote in Florida I can supply them with both.

They told me sorry we want a utility bill with your name on it. We want your credit card statement for whichever credit card I'm using to verify that I'm making local purchases.

I told them my story leaving out the Thailand portion. I told them I live in Florida at my daughter's house because I haven't reestablished myself with my own condo or home yet. I told them I don't have a credit card any longer nor do I pay with ATM cards. Now that I have no job and no income I use cash for everything so I cannot supply you with a credit card statement.

They told me I will not be allowed to access my account and perform any transactions until I do. The only thing they would let me do is close my account and move my money to my fidelity accounts.

Do not depend on Vanguard if you're spending any time outside of the United States!

I’m in Florida and my permanent address is a mailing service, they’ve never said anything and if they did I would move my money too. I can’t believe they asked for a CC statement. In today’s world where people can use VPN it may look like I’m outside the USA, but they have no idea.

 

[Katsmeow]

What kind of difficulty

Not the person who posted about Vanguard having some difficulty. But, I know my answer.

Competition.

For a long time, Vanguard had low fees and was pretty no frills. Fidelity, et al had more frills but you paid for it. Many people (including me) didn't want to pay for it. But, Vanguard in a sense is the architect of their own competition. They were so successful that many places offer lots and lots of low fee funds. I like the Fidelity web site better. Fidelity is easier to deal with. I don't need to go into an office but there is one 15 minutes away if I want to. Vanguard has no compelling advantage. I stay there for one main reason: not putting all my in one basket. I like having stuff at 2 different places. But, if I had to pick just one I would pick Fidelity.

 

[RVplusDog]

Choose a fund with the lowest cost and other fees. All funds and all companies are the same. Best income fund is Schwab Intelligent Portfolio and best investment is Vanguard VTSAX.

Is there a reason you prefer VTSAX and its .04% expense ratio over the equivalent VTI at .03% expense ratio?

 

[PointBreeze]

I very much prefer interacting with Fidelity online and agree with OP re: the benefits of Fido, but I very much prefer Vanguard’s low cost products.

So we keep the part of my portfolio that is nearer-term at Fido (cash and bond funds/ETFs) and do all my bill paying, check writing, etc. at Fido. We keep the "buy-and-forget" portion of the portfolio at Vanguard (primarily equity funds/ ETFs).

This has worked out very well for us.

 

[jazz4cash]

Not the person who posted about Vanguard having some difficulty. But, I know my answer.



Competition.



For a long time, Vanguard had low fees and was pretty no frills. Fidelity, et al had more frills but you paid for it. Many people (including me) didn't want to pay for it. But, Vanguard in a sense is the architect of their own competition. They were so successful that many places offer lots and lots of low fee funds. I like the Fidelity web site better. Fidelity is easier to deal with. I don't need to go into an office but there is one 15 minutes away if I want to. Vanguard has no compelling advantage. I stay there for one main reason: not putting all my in one basket. I like having stuff at 2 different places. But, if I had to pick just one I would pick Fidelity.

Good reply. I agree with everything you said. I favored VG for a long time and we will probably use both. I was surprised to see Fidelity is smaller than Schwab and half the size of VG. If VG really is in trouble it’s bad for everybody. I think they just need to tweak a few things to maintain their dominance. I am glad megacorp chose Fido to run our 401k and pension. They just opened a new office 10 miles away. Before this I was 15 miles away from two other offices. I only used them rarely but it is a real benefit to have them available.

 

[BigMoneyJim]

Is there a reason you prefer VTSAX and its .04% expense ratio over the equivalent VTI at .03% expense ratio?

I recently went almost all-ETF after having used open-ended funds for almost 30 years. Here are some possible reasons:

- No ask/bid spread on purchase and sell
- Until recent months (or years in restricted situations), ETF buying/selling cost commission
- Can buy or sell exactly how much you want
- Because of the previous point, reinvesting dividends is simpler and more complete
- Used to (?) not need a brokerage account for open-ended funds. (Outside of 401(k)s it's not clear to me that it's possible to open a non-brokerage account these days. Vanguard wouldn't let me do it.)

Of course ETFs have other advantages, and my positions are now mostly ETF, but I'm just offering answers to your question.

 

[Sanbenito1]

I put my IRA/retirement accounts in Fidelity and kept my other accounts at Vanguard. Figured if I ever got hacked, I’d still have half my money while I dealt with the theft.

 

[teejayevans]

I put my IRA/retirement accounts in Fidelity and kept my other accounts at Vanguard. Figured if I ever got hacked, I’d still have half my money while I dealt with the theft.

Has there ever been a case of money stolen from Fido or VG where it wasn’t a spouse or someone else who had the password?

 

[MRG]

Has there ever been a case of money stolen from Fido or VG where it wasn’t a spouse or someone else who had the password?

They don't advertise.

Fidelity, Schwab, and Vanguard are the onlones who offer a no hack guarantee.

 

[jazz4cash]

Has there ever been a case of money stolen from Fido or VG where it wasn’t a spouse or someone else who had the password?

I think the concern would be getting hacked or some technical glitch. I think someone here also reported a freeze was placed on assets by the state. The point is you don’t get stuck while the problem is sorted out.

And then there’s this, which also maybe highlights a risk with being too frugal.

https://www.inquirer.com/business/vanguard-scott-capps-dead-accounts-steal-prison-20190916.html

 

[sonnieseas]

Have funds in both VG and FIDO, each site has worked as expected for normal withdrawals/distributions and the annual AA adjustments I typically do.

I do like Vanguard's fraud protection policy (basically they will reimburse your assets lost to fraud if you maintain proper security and diligence over your accounts.) Does anyone know if Fidelity has a similar policy?

 

[OldShooter]

... I do like Vanguard's fraud protection policy (basically they will reimburse your assets lost to fraud if you maintain proper security and diligence over your accounts.) Does anyone know if Fidelity has a similar policy?

I would expect Fido to be similar. Here is Schwab, which seems pretty bulletproof: "Schwab will cover 100% of any losses in any of your Schwab accounts due to unauthorized activity." However, if you have given your credentials to someone else, then any activity by/from that individual is considered to be authorized. You also have to "report any unauthorized transactions to us as quickly as possible." Which doesn't seem unreasonable. (https://www.schwab.com/schwabsafe/security-guarantee)

 

[MRG]

I think the concern would be getting hacked or some technical glitch. I think someone here also reported a freeze was placed on assets by the state. The point is you don’t get stuck while the problem is sorted out.

And then there’s this, which also maybe highlights a risk with being too frugal.

https://www.inquirer.com/business/vanguard-scott-capps-dead-accounts-steal-prison-20190916.html

That may have been me. My Fidelity brokerage account was locked by the state of PA after my DF passed away when he lived there. His estate did a TOD of my share of his assets. PA still has inherentance taxes on children and PA locked my entire frigging brokerage account because some of my assets needed their share of taxes paid. IIRC they were owed 12k and locked 500k.

To be clear I could trade in the account all day long, I simply couldn't withdraw any assets including the money I had in there prior to the TOD being executed. It was cleared ~6 months later after his estate went through probate.


There's multiple reasons an agency can have your account locked including by the fund company. When fraud is suspected they become very aggressive at ensuring it's not their fault! It's more common than we might think.

 

[retired1]

I love both Vanguard & Fidelity. Vanguard for their Admiral funds w/ low expense ratios and Fidelity for their ZERO funds. Hard to pick one over the other

 

[Cobra9777]

...I do like Vanguard's fraud protection policy (basically they will reimburse your assets lost to fraud if you maintain proper security and diligence over your accounts.) Does anyone know if Fidelity has a similar policy?

Here is Fidelity's policy: Fidelity Customer Protection Guarantee

Fidelity will reimburse you for losses from unauthorized activity in covered accounts occurring through no fault of your own.

They are all essentially the same. So this is not a reason to favor one over another.

 

[PointBreeze]

We moved everything from VG to Fido last year (in kind). Mainly for the CMA account, better customer service and the ability to go to an actual storefront. I think this will be better for DW when I'm gone.

+ 1/2

We moved all of dear partner’s $$ and all of our shared $$ to Fidelity because the website is so easy to use and there are local offices. If something happens to me, she can get personal assistance and she finds the Fido iPad app easy to use. My $$ is divided between Fido (cash and bond funds/ETFs - near term) and Vanguard (equity and real estate funds/ETFs - long term).