What's wrong with Schwab?

[24601NoMore]

I have had phone call 2FA set up at Vanguard for years. I login and then receive a call on my home number which conveys the access code. I am not restricted to logging in with one computer.

I think you're also missing the point I was trying to make. Secure 2FA is something like Symantec VIP Access that generates a 6-digit random number, which FIDO (and AFAIK based on my reading, Schwab) offer. That number changes every 60 seconds and is based on your individual hardware - just like the old RSA tokens many of us used at w*rk.

VG does not "require" you restrict access to just one computer. It's an OPTIONAL security feature. Unfortunately, it often does not work. (VG's website randomly "forgets" your PC - presumably after a Windows or browser update or for some totally random reason). IF that happens to you (it's happened to me roughly 4 times in the past 4 months), you need to call in to have them allow any PC to login, and then reset to restricted PC access. It's basically a giant PITA.

The lack of true secure 2FA has been talked about on Bogleheads and elsewhere for years. Many of us have asked VG to implement something similar to Fidelity but VG has yet to do so. Are there workarounds like using a home phone to get a "2FA" number read off to you? Sure. And not to get into the weeds of why, but many including me strongly prefer a solution like Fidelity has with their VIP Access app.

The point I was attempting to make is that FIDO and presumably Schwab offer something that many people believe is much more secure than VG. I'm not here to debate that, but simply to point out yet another important (to many) difference between Schwab, FIDO and VG.

 

[24601NoMore]

Your statement that Fido / Schwab are more expensive than Vanguard in actively trading MFs was perplexing as MFs aren't set up to actively trade IMHO. But to each our own (FWIW: Schwab & Fidelity are fairly competitive)

I'm not talking trading.

I'm talking acquiring and selling mutual fund shares, which can get significantly more expensive at FIDO and Schwab than it can be at VG, depending on what you are buying and selling.

That's a real cost at FIDO and Schwab if you want mutual funds from companies like PIMCO that fall under their "transaction fee" funds.

Further, "NTF" (Non Transaction Fee) funds, which Schwab and FIDO do offer and promote, often have 12B-1 fees associated with them, making them significantly less attractive. That's a big part of why FIDO, Schwab and others do not charge transaction fees to buy or sell those funds - they rake in .25% or whatever similar 12B-1 fee every single year for people who hold those particular funds.

I totally get that many here only trade ETFs and individual stocks. But for those of us who ALSO hold traditional mutual funds, there can be some significant differences between the three brokerages depending on what fund families you want to hold.

 

[beernutzbob]

I think you're also missing the point I was trying to make. Secure 2FA is something like Symantec VIP Access that generates a 6-digit random number, which FIDO (and AFAIK based on my reading, Schwab) offer. That number changes every 60 seconds and is based on your individual hardware - just like the old RSA tokens many of us used at w*rk.

VG does not "require" you restrict access to just one computer. It's an OPTIONAL security feature. Unfortunately, it often does not work. (VG's website randomly "forgets" your PC - presumably after a Windows or browser update or for some totally random reason). IF that happens to you (it's happened to me roughly 4 times in the past 4 months), you need to call in to have them allow any PC to login, and then reset to restricted PC access. It's basically a giant PITA.

The lack of true secure 2FA has been talked about on Bogleheads and elsewhere for years. Many of us have asked VG to implement something similar to Fidelity but VG has yet to do so. Are there workarounds like using a home phone to get a "2FA" number read off to you? Sure. And not to get into the weeds of why, but many including me strongly prefer a solution like Fidelity has with their VIP Access app.

The point I was attempting to make is that FIDO and presumably Schwab offer something that many people believe is much more secure than VG. I'm not here to debate that, but simply to point out yet another important (to many) difference between Schwab, FIDO and VG.

You made a factually incorrect statement and I corrected you. You absolutely can set up a Vanguard account so that you can't login without receiving a randomly generated access code sent with a phone call to a designated number. My account has been set up this way for years and it has never failed. If you don't want to do this that is your choice but to state it can't be done is inaccurate.

 

[gayl]

There is nothing 'wrong' with Vanguard. I simply prefer 1 contact person, local office, low fees, wide options.

 

[24601NoMore]

You made a factually incorrect statement and I corrected you. You absolutely can set up a Vanguard account so that you can't login without receiving a randomly generated access code sent with a phone call to a designated number. My account has been set up this way for years and it has never failed. If you don't want to do this that is your choice but to state it can't be done is inaccurate.

It's not factually incorrect to say that VG does not have a secure 2FA **APPLICATION** like Fidelity does with VIP Access. That was my point. If I stated it less clearly than I intended, my apologies.

If you're comfortable with VG's current "2FA" solution, that's great. But many are not, and there are hundreds of posts on Bogleheads over many years including recently as to why others are not happy with it, either.

My intent was to point out real differences between the brokerages that had not been mentioned yet. And the lack of a modern, application-based 2FA solution IS a very real difference between them. One that's important to many people, me included.

 

[OldShooter]

Haven't seen anyone mention one big difference yet - the cost to trade a "transaction fee" mutual fund. ...

I think there are a couple of reasons for this. First, apparently the fees that some funds pay Schwab for customer bookkeeping vary, so adding a transaction fee would tend to discourage customers from buying low-paying funds. Second, call it "nanny state" if you like but the fees and the buy/sell timing restrictions on some funds are specifically intended to discourage trading. The extreme anecdote on trading being hazardous is the poor kid who committed suicide because he misread his Robin Hood statement. And, speaking of Robin Hood, I have never looked at the site but from what I've read they make trading look like a video game. That would be anathema at Schwab IMO, and properly so.

Personally, I've never worried about the fees. First, we trade very seldom and, second, a $75 fee is negligible on our typical ticket sizes. Our objective for any trade dwarfs the $75 pittance in importance.

Change may be on the horizon, though. Despite the Schwab acquisition, TDAmeritrade has been spending big advertising bucks at The Economist magazine recently, promoting their trading software. IIRC last week or the week before they had the back cover and this week they have a prominent full page ad. I can't imagine that they'd be doing this if the acquistion didn't represent at least a small change in Schwab's attitude toward traders. We'll see, I guess.

Edit: Thinking a little more about this, wouldn't The Economist be about the last place you'd go to look for traders?

 

[indiajust]

I love Schwab, just bought the biography on the founder. VG invented the no load mutual fund, and the funds own the company itself. They run a tight ship. But Schwab invented low cost self investing, and that caters to this crowd. I always took advantage of rollover situations to consolidate with schwab in my rollover. I have used almost every service they offer and never had an issue. They would need to chase me away with a stick at this point.

 

[Dash man]

I love Schwab, just bought the biography on the founder. VG invented the no load mutual fund, and the funds own the company itself. They run a tight ship. But Schwab invented low cost self investing, and that caters to this crowd. I always took advantage of rollover situations to consolidate with schwab in my rollover. I have used almost every service they offer and never had an issue. They would need to chase me away with a stick at this point.

Have you used their private client service, and if so, were you happy with it?

 

[foxfirev5]

For myself, DW and DM I keep everything where it is. I've had far too many negative experiences trying to transfer funds. It works out to be nearly split between VG and Fido. Good enough for me.

 

[Jim in PA]

Is Schwab slipping?

I have been a very satisfied client of Schwab for many years. It started when my then employer used Schwab for stock based compensation. Very recently Schwab seems to have slipped. It’s things like not being able to reach support or glitches on the trading system. A few days ago I THOUGHT I had placed an order… but I couldn’t see it on the system. This wasn’t something immediate it was at least 10 to 15 minutes later and it still wasn’t there. I figured I must have made a mistake and failed to save it. As I created a replacement order, I got a error message.

I don’t know, but I speculate that maybe they picked a large number of new clients with the Robin Hood fallout and all of those trading wizards with stimulus money. Or perhaps it’s integrating the TD Ameritrade clients.

 

[indiajust]

Have you used their private client service, and if so, were you happy with it?

I have not. I was unwilling to let go of the trading and step aside. I have been to 2 presentations to consider but backed away both times.

In compensation, I like the Robo Account.. they call their version Intelligent Advisor. I decided that if I start to slip, I will just push more money to the Robo. No desire to do the Robo with advice option.

I also went to a Windhaven presentation, but it was bigger than I was willing to allocate to at the time. The same with Thomas.

I have done dozens of rollovers IRA/Roth with nary a hiccup.

 

[FREE866]

Schwab went through a period late last year where their customer service was horrendous. They have since improved so I'm sticking with them. Like others on here, I require very little assistance as I do everything myself and don't trade at all.

 

[gayl]

I have not. I was unwilling to let go of the trading and step aside. I have been to 2 presentations to consider but backed away both times.

In compensation, I like the Robo Account.. they call their version Intelligent Advisor. I decided that if I start to slip, I will just push more money to the Robo. No desire to do the Robo with advice option.

I also went to a Windhaven presentation, but it was bigger than I was willing to allocate to at the time. The same with Thomas.

I have done dozens of rollovers IRA/Roth with nary a hiccup.

I've gone to Thomas, Windhaven, Private Client, Intelligent Advisor programs ..... DIY works best for me. 90% core (2 ETFs) 10% explore on my screens (stocks, options, more ETFs) works better for me. Hold cash at my regular bank

 

[gayl]

Schwab went through a period late last year where their customer service was horrendous. They have since improved so I'm sticking with them. Like others on here, I require very little assistance as I do everything myself and don't trade at all.

Was that when everyone was WFH?

 

[Rambler]

I like Schwab. I’m retired, and thinking of moving my 401k into an IRA at Schwab (the company keeps moving the IRA around and I’m tired of having to relearn a new web system every few years). Customer service has been great, the advisor in the office has been great, the assistant has been great. I really like both the web site and the app. It just works. I have absolutely no incentive to move.

 

[EastWest Gal]

Creating a Rollover IRA with Schwab is simple. I moved two 401Ks and a 403B into my rollover IRA. The first two transfers occurred with real checks but the most recent one was a direct transfer between institutions.

Their website is robust and easy to use, and improves all the time.

 

[a60dan]

I’ve been with all three and have been mostly happy with all three. One question you might ask yourself is, “Which company is in best alignment with my investing style?” In my case, I only want index funds, so I am now a Vanguard partisan.

I once had the bulk of our assets at Schwab, where I owned Vanguard index funds. One day, I got a call from a Schwab financial planner, who told me I’d always have subpar results with index funds and that he could do better. I was insulted, feeling it revealed Schwab’s true actively-managed fund orientation. I decided I’d rather have my money in the company that invented index funds.

I made the move to Vanguard and have been very happy ever since. I have enough there that I have an assigned advisor, Michael _____, and I get terrific customer service every time. I’ve never met Michael, because he’s in Scottsdale. Vanguard does not have fancy, expensive downtown storefronts. It’s a co-op with the lowest fees in the industry, so I feel Vanguard is aligned best with my interests. They aren’t trying to satisfy Wall Street shareholders or family owners.

I have had retirement plans at Fidelity and always received excellent customer service there. However, Fidelity is out of alignment with my unshakeable commitment to index funds and low fee everything, except for a few loss-leader index funds that are designed to get people in the door so that higher fee funds and products can be sold to them.

All that said, all three companies are the relative white hats in the industry and one can’t go too far wrong at any of them.

Agreed.

I feel I’m getting the best value with Vanguard since moving retirement accounts there.

No free coffee or local office, and web site not as nice as Schwab’s.

Fidelity is the only one to offer HSA.

We have a fair amount at Schwab, including taxable accounts. ATM fees rebated is nice perk.

There is nothing wrong with Schwab

 

[target2019]

This is one of my financial projects to complete very soon. I created the rollover IRA account at Schwab early last year. Then I completed forms with the 401(k) provider, got the check and mailed to Schwab during the pandemic. Think I was out of the market less than 2 weeks.

Now I have a much larger 401(k) to move. Yes, it changes too frequently, charging fees now, and so on. I have the forms and need to check those, then get to a notary so my wife can sign. That was not required with company A provider.

Every situation is different, so check all requirements before starting any process.

We also moved a Vanguard mutual fund to the Schwab brokerage. Sold a bunch of inherited mutual funds, and there is no fee to sell a MF at Schwab.

 

[HMMY]

Nothing's wrong with Schwab. I have half my money there and half at Merrill Edge. I manage my sister's money at Fidelity. I have nothing but index funds.
No one ever bothers me, but when I need something Merrill is always there. Of the three, my favorite is Merrill. Merrill introduced me to my Bank of America lending officer who just closed a 2.125% 30-year fixed loan for me. I used to have money at Vanguard, but due to poor customer service, I moved it out.

 

[indiajust]

Schwab went through a period late last year where their customer service was horrendous. They have since improved so I'm sticking with them. Like others on here, I require very little assistance as I do everything myself and don't trade at all.

Read on the RIA Biz that Schwab was forced to delay the TDAmeritrade merger completion date due to extreme volume of trading. They hit the very top of their estimate of max trade volume and max asset transfer and account growth. And that was independent of the merger! All the brokerage houses are hiring to support asset allocation advice and rollovers/consolidation...

 

[ERhoosier]

I am mostly with Schwab and have been generally happy with their service for 30+ yrs. Local office as well as competent on-line and phone support. Their index funds are now lower cost than almost anyone else (inc. Vanguard in several cases). I have also been with VG for decades, but plan to leave them as soon as I can move my employer 401k. VG service has gown downhill over the past 2-3 yrs to the point of being bothersome. Their website is clunky compared to Schwab. Then a bit ago they sent me a letter out of the blue saying I had no designated beneficiary for my account when my web account showed otherwise. Multiple e-mails, phone calls, and a couple letters later they said it was a mistake. I really DID have a proper beneficiary designation all along. Don't need that angst....or waste of my time.


Full disclosure- I plan to continue to hold some Vanguard ETFs, just not a brokerage account with them.

 

[getwilde]

We like Schwab.

Initially, our propose for opening an account was for travel:
1) we can use ATM machines (including internationally) and Schwab will credit ATM fees back to our checking account at the end of the month.
2) They don't charge currency conversion charges when we use their Visa card internationally.

We were impressed enough with their service that we later opened accounts for brokerage, custodial, etc.