Schwab or Fidelity

[daverph]

Looking for advice for someone choosing between the two companies for rollover IRA and other accounts for individual stocks only.

 

[GrayHare]

I haven't tried Schwab, but I have compared Fidelity with several others and Fidelity has been a good step better.

 

[Chuckanut]

Schwab has some local offices you can visit. Would that be important to you?

 

[lowflyer]

Have always been with Schwab. They offer everything you'll need and their customer service is outstanding. Never a complaint.

 

[Alan]

Schwab has some local offices you can visit. Would that be important to you?

As do Fidelity.

We've been with both companies, and I could not say that one was better than the other.

 

[braumeister]

I used Schwab years ago but they annoyed me one time too many.
I have consistently been delighted with Fidelity customer service and available resources.
Just my tuppence.

 

[ziggy29]

As do Fidelity.

We've been with both companies, and I could not say that one was better than the other.

Same here -- it's hard for me to see that one would be appreciably better than the other and both would be good choices for most folks.

 

[clifp]

Either. As somebody, I think Ha Ha, said if the rest of service industries in America provided the same level of high quality service that Fidelity or Schwab (and generally Vanguard) life would be much better.

 

[KiraC]

TD Ameritrade has the best training program IMO to take you to the next level. Been with both Fidelity and Schwab and recently switched.

 

[frayne]

Happy Fidelity and Vanguard customer here, no experience with Schwab.

 

[CyclingInvestor]

I have used Schwab for about 12 years now, individual stocks only, in rollover IRAs, Roths, and non-tax-advantaged accounts.. They have been helpful when I needed help (not often) and leave me alone the rest of the time. No complaints.

 

[Ed_The_Gypsy]

I have read that Schwab has a debit card for access to your retirement accounts that will refund ATM fees and charges for converting currency when used overseas. I do not know if Fido has anything comparable.

This is worth checking out for those who have international travel/residency in mind after retirement.

 

[nwsteve]

I have read that Schwab has a debit card for access to your retirement accounts that will refund ATM fees and charges for converting currency when used overseas. I do not know if Fido has anything comparable.

This is worth checking out for those who have international travel/residency in mind after retirement.

Fido also has a no fee Visa debit card which refunds all ATM fees and only charges foreign exchange fees at 1% instead of standard 3% used by most credit card issuers. (must be at Premium Client level or signed up for cash management account to get full ATM fee reinburse.) Also offers additional benefits of
Extended warranty services for first 90 days from date of purchase
Travel and Emergency Assistance
Worldwide Travel Accident Insurance
Auto Rental Collision Damage Waiver

See link for details. Fidelity Visa Gold Check Card (ATM/Debit Card)
Have used across Europe and Turkey with no problems
Nwsteve

 

[Ed_The_Gypsy]

Fido also has a no fee Visa debit card which refunds all ATM fees and only charges foreign exchange fees at 1% instead of standard 3% used by most credit card issuers. (must be at Premium Client level or signed up for cash management account to get full ATM fee reinburse.) Also offers additional benefits of
Extended warranty services for first 90 days from date of purchase
Travel and Emergency Assistance
Worldwide Travel Accident Insurance
Auto Rental Collision Damage Waiver

See link for details. Fidelity Visa Gold Check Card (ATM/Debit Card)
Have used across Europe and Turkey with no problems
Nwsteve

Thanks, Steve,

Several interesting features to that one.

 

[farmerEd]

They really do compete head-to-head and service is great with both of them. I have all my retirement money at fidelity, and non-retirement money at schwab. As an active trader, I prefer the real-time trading tools from schwab however.

 

[travelover]

Fidelity and Vanguard here. I have the 2% back Fidelity credit card and have a Fidelity brick and mortar place a couple of miles away.

 

[Dawg52]

No brick and mortar locations near me with any of them. If one had been near by, I would have gone with that one. I have only used Fido but I would imagine VG or CS would be fine.

 

[youbet]

They really do compete head-to-head and service is great with both of them. I have all my retirement money at fidelity, and non-retirement money at schwab. As an active trader, I prefer the real-time trading tools from schwab however.

Yep, competition is great. For example, when I mentioned to Schwab that I didn't like paying a commission to purchase Vanguard funds in my Schwab account, they quickly responded by eliminating commissions for my Vanguard purchases.

I'm happy with Schwab. But I'm sure that if I was with Fido, I'd be happy there too.

 

[haha]

Yep, competition is great. For example, when I mentioned to Schwab that I didn't like paying a commission to purchase Vanguard funds in my Schwab account, they quickly responded by eliminating commissions for my Vanguard purchases.

I'm happy with Schwab. But I'm sure that if I was with Fido, I'd be happy there too.

What I don't understand is how these high-service discounters can stay in business. You get a very high level service in return for having a larger account. But you don't have to trade that account. You don't have to buy Fidelity funds. You don't have to buy their brokered annuities or CDs. As far as I know you can just let a portfolio of stocks and bonds sit there, and still get a very high level of service.

Do enough people buy management services, or use Fidelity Funds, or trade enough to make them profitable? I imagine Fido and Schwab get some rake off the credit card, and that many account holders use this card.

My former manager at Bank of America was out front that if I wanted free checking, I had to use more paid services.

Fidelity even has a page now where you can see what you have spent in commissions, I think YTD. Theoretically, it might be zero or very close to that.

Ha

 

[youbet]

What I don't understand is how these high-service discounters can stay in business. You get a very high level service in return for having a larger account. But you don't have to trade that account. You don't have to buy Fidelity funds. You don't have to buy their brokered annuities or CDs. As far as I know you can just let a portfolio of stocks and bonds sit there, and still get a very high level of service.

Do enough people buy management services, or use Fidelity Funds, or trade enough to make them profitable? I imagine Fido and Schwab get some rake off the credit card, and that many account holders use this card.

My former manager at Bank of America was out front that if I wanted free checking, I had to use more paid services.

Fidelity even has a page now where you can see what you have spent in commissions, I think YTD. Theoretically, it might be zero or very close to that.

Ha

I agree. Sometimes I'm amazed at the service level I receive despite not being an active trader or using any paid services. I do a dozen or two commissioned trades ($8.95) per year and that's about it. Yet I get capable help whenever I want it in regard to handling "hardware" issues.

For example, my wife and adult son are annoyingly disinterested in investing. Therefore we decided dad should have POA at the appropriate level on their various accounts and have access to all accounts on the web site along with all accounts showing up in my summaries, etc., etc. When I called and asked what to do, the rep suggested the 3 of us just give him a couple of days and we could come in and sign the papers. We did. Everything was ready (lotsa forms, all filled in with everything but our signatures) and after we were given a good explanation of how everything would work, we signed and left with our copies. This was nothing I couldn't have eventually figured out myself, downloaded the forms from the website, etc., but it was nice to not have to. Especially since some of the situations were a tad complicated such as how to handle the Coverdale Educational IRA's which my son owns for the kids but I fund and manage.

I'm sure Fido customers get the same deal. But, like you, I'm surprised at the service level these discount brokers give given that I work hard to avoid paying any management fees, minimize commissions, etc.

 

[clifp]

What I don't understand is how these high-service discounters can stay in business. You get a very high level service in return for having a larger account. But you don't have to trade that account. You don't have to buy Fidelity funds. You don't have to buy their brokered annuities or CDs. As far as I know you can just let a portfolio of stocks and bonds sit there, and still get a very high level of service.

Do enough people buy management services, or use Fidelity Funds, or trade enough to make them profitable? I imagine Fido and Schwab get some rake off the credit card, and that many account holders use this card.



Ha

I have wondered that myself and it is one of the reason that I've never owned either companies stock. I have done enough option trading this last few years that I suspect my account is modestly profitable. But there have been years where my commission were ~$100 while I'd own some Schwab MM and perhaps a Schwab fund or ETF. I didn't see how it paid for the many hours of knowledgeable Schwab staff time I use a year, and the boat load of free service, seminars etc.

The credit card business a Schwab wasn't profitable (2% rebate) which is why they got out of the business. I doubt it is much better at Fidelity,since I doubt many Fido customers run credit card balances.
The companies do make money from loaning shares. I know that decreasing interest rate have hurts profits since they use to make money from money market funds.

 

[GrayHare]

One way the brokers make additional funds is by arbitrage, which takes many forms. For example, if you buy 100 shares of XYZ, the broker might actually sell you its own shares (at a profit) rather than find them on the Street.

Someone please correct me if this is wrong but I believe brokers sometimes will execute your trade on paper only, and assume the risk. For example, if the broker is convinced it can buy shares cheaper tomorrow, it may post your stock purchase to your account today but might not actually acquire the shares until later.

 

[ziggy29]

One way the brokers make additional funds is by arbitrage, which takes many forms. For example, if you buy 100 shares of XYZ, the broker might actually sell you its own shares (at a profit) rather than find them on the Street.

Also they make money by lending out securities to short sellers if you have a "margin" account (which you may have even if you never used margin).

 

[Nords]

I have wondered that myself and it is one of the reason that I've never owned either companies stock. I have done enough option trading this last few years that I suspect my account is modestly profitable. But there have been years where my commission were ~$100 while I'd own some Schwab MM and perhaps a Schwab fund or ETF. I didn't see how it paid for the many hours of knowledgeable Schwab staff time I use a year, and the boat load of free service, seminars etc.
The credit card business a Schwab wasn't profitable (2% rebate) which is why they got out of the business. I doubt it is much better at Fidelity,since I doubt many Fido customers run credit card balances.
The companies do make money from loaning shares. I know that decreasing interest rate have hurts profits since they use to make money from money market funds.

Another possibility is that Fidelity isn't doing very well lately:
UPDATE 1-Fidelity seeks liquidity boost for funds | Reuters

INSIGHT-Fidelity's expensive debt raises eyebrows | Reuters

They're seeking additional sources of liquidity and reconsidering one of their internal lending programs.

 

[jebmke]

I had an account with Schwab. It was a brokerage account and also used to manage and exercise NQ Options.

One year (recently) I exercised some options -- no problem. Later I used Schwab's internal email (from the account web site) to request some info on my transactions for tax purposes. They sent me, in open email, info on another client, different company. When I called them to find out what the deal was, they said that the email system that you access on your account page just dumps to a general email queue in Schwab. Someone has to go in and read it and manually deal with any info request. Your email is not linked to your account. Apparently someone looked up the info I requested but made a mistake and sent info from the account of another client. The info went out over regular SMTP email.

I will never do business with Schwab again.