What's wrong with Schwab?

[Souschef]

I am happy with Fido. I moved DW's holdings from UBS, who was a PITA to deal with to Fido. I looked at the funds she held, all of which had high expense ratios and moved them to similar Fido funds with much lower expense ratios.
I also have some of my holdings there as well as three 529 funds for my grandchildren.

 

[KenZ71]

My IRAs & day to day checking are with Schwab quite happy. Easy to get a live person.

401k is at Fidelity. Impossible to get a person.

 

[doneat54]

I've been with all three also. When working, for a while, VG managed the companies 401ks. Had limited interactions/transactions. Later, before I retired, them moved to Prudential which kind of sucks.

Never had an issue with Schwab. Have some kids 59s there now, but again, never used them much transactionlly. Seemed solid.


Do a lot with Fidelity, and really, really like their website and tools. Also recently had some good Zoom calls with our rep who helped us with a budget and model when DW retires next year. They only have 25% of our portfolio now, but I intend to move near 100% of it there once we start drawing from it.

 

[SecondCor521]

I grew up on Vanguard, and still have most of my funds there. I'm content because I'm a very low maintenance customer, but I did not have a good experience recently trying to make a simple change (rolling one ESA into a second existing ESA) - it was literally 10 times harder than it should have been.

When I went to start my teenagers on Roth IRAs, Schwab beat out Vanguard. They were OK with small initial deposits, they had a local office, and their expense ratios were close enough.

I remember thinking at the time that my kids would grow their Roths and eventually move them all to Vanguard for the lower costs. But that's not what happened. Their service and website are really good, and their costs have dropped to where they're essentially identical if not a basis point or so better. I expect my kids will end up being Schwab people, and I think that's fine.

Schwab's monthly magazine that comes in the mail does seem a bit biased in favor of active investing, so maybe they're hoping my kids will be converted to that train of thought someday.

 

[JackJester]

As other have said, you may just not have noticed the Schwab support on this forum. There are really only the big 3 now. I have my brokerage account, Roth, and a 401K rollover at Schwab. And when I retire next year I will roll my current employer 401K to Schwab. It used to be you couldn't buy a Vanguard fund at Schwab without paying a fee. But that changed a year or so ago. So IMHO Schwab is equal to any of the other 2. I like their website and I have a local office 20 minutes away. Easy to talk to a real person as other have mentioned. No complaints.

 

[Austin704]

I have had most of my investable assets with Schwab for almost 15 years. No complaints at all. I think their customer service is really good. The online platform is user-friendly and I can handle almost all transactions without calling in--including Roth conversions.

They have plenty of investment options, and many of their company-brand mutual funds are competitive with the offerings from Vanguard.

I think many of the forum members here are also members of Bogleheads (I'm one of them) and of course Jack Bogle founded Vanguard. Could explain some of the perceived bias?

 

[MRG]

My IRAs & day to day checking are with Schwab quite happy. Easy to get a live person.

401k is at Fidelity. Impossible to get a person.

The support for 401k are handled by a different group of people at fund companies.They use different tools and systems to service the participants.

My experience with Fidelity's group was a one phone call, with them sending a follow-up email months later.

 

[Henry Lili]

Agree. I opened my Schwab account in 1992 never any problems. Loads of research included (CFRA, M*star, others). Waive wire transfer fees even outgoing etc. Very helpful if you need help. FIDO has most of my retirement assets no problems there either.

Thanks for the quick feedback. The point "you may not hear much about Schwab because people are more likely to post a complaint not a compliment" is well-taken. Good to know I'm not really missing anything, short of people don't dislike Fidelity as much as I was inferring.

Gonna just stay put with my non-work portfolio. It ain't broke.

 

[gayl]

I'm very happy with Schwab and often recommend it. Met with a guy named Lou Mercer who set up my screens /showed me how to modify / quite a long individual session and we always still seemed to run into each other pre-pandemic at the downtown SF office. I had only 2 issues: (1) I was assigned to an upstairs rep who asked me to draw up a list of possibilities to research on our 1st mtg. He was 1/2 hr late to our 2nd then stated he did not discuss individual stocks. WTF? I was an active trader at the time so never saw him again. (2) Reassigned to another upstairs rep who immediately told me that she charged ×% to completely handle my account. Walked into the Branch Mgr office was was immediately flagged for 'downstairs only' which is where the newbies sit. Never disappointed again. Seems that once your account passes a certain point it is to be assigned 'upstairs.' Nope.Not.For.Me. Especially since I'm now primarily low expense ratios ETFs (0.03%)

Fido Rep tried to sell my 86 yo mother an annuity. At the time her fixed expenses were less than 1/3 of her net income. Went to the next mtg with her and he kept flattering her eyes. Jerk. Tore it up / told him I was reporting him.

So there's good & bad at both

 

[Gotadimple]

Schwab is good, website is very easy navigate and I have found I can do just about everything myself. Customer Service is very responsive. I've been with them for a very long time, and initially went with them because they had a focus on the individual investor and lower fees than most if you wanted to buy stocks.

Today, of course all three Vangard, Fidelity, and Schwab compete with each other on fees. Fidelity and Schwab have a huge library of mutual funds and etfs, many which are no-fee. Like any company, Schwab goes through periods where the focus changes. For a while they did have paid advisers on their premises. I just ignore the call from the new account manager.

 

[Bestwifeever]

We have not done it yet, but will eventually move everything from Vanguard into either Schwab or Fidelity because both have offices within five miles. Looking at the personnel on each website for those two offices, the Schwab people are head and shoulders above the Fidelity in terms of education (business degrees vs BAs in sports medicine, for example) and so I am leaning toward Schwab.

 

[truenorth418]

I have been with Schwab for 25 years. Very happy with them.

 

[target2019]

Hi There,

I have the majority of my portfolio in Schwab, mostly because my company's 401K and stock administration is through them. I also have a bit of money in Fidelity from an old 401K that turned into a rollover IRA that I never moved. My company is in the process of being acquired and the new company uses Fidelity so we're going to be moving the work stuff to Fidelity.

Anyway, following the posts on this forum for the past few years, I never see anyone say hardly anything about Schwab, people are indifferent-to-hostile to Fidelity, and Vanguard seems to be a favorite (very unscientific, but that's my take).

I've had zero issues with Schwab. Their customer service has been great and their website is pretty easy to use, there's a branch near my house where I can get a free cup of coffee from time to time. On the other hand, the few times I've needed support from Fidelity, it's really been sub-par, though their local office also has free coffee.

I've never used Vanguard (and they don't have a local office).

So what does Vanguard do better than Schwab? Since things are going to be in turmoil for me with the acquistion, I'm interested to know if there's a compelling reason to move my non work stuff to Vanguard.

Thanks!

DC

I don't think there is a compelling reason to move from one company to another. There are threads comparing the 3 companies, sometimes two, and I don't think there's a reason to cross any single company off the list. Each has its advantages, and I think it is common for an investor to have two companies, as that is what happens with 401(k) accounts.

 

[T-Minus]

I was with USAA for brokerage, insurance and banking until about seven years ago, when I moved the brokerage and banking to Schwab. About three years ago, I moved the insurance from USAA to Amica. Regarding the change from USAA to Schwab - we’ve been very happy with the level of service we’ve received, the availability of various investments, and the ever-improving website (investment analysis, bill pay, etc.). The only thing I have a complaint about is the fact that I cannot use my VPN while traveling to access the website. When I queried Schwab tech support about this, I was told that my VPN (along with many others) is a common attack vector from hackers and that they had made the decision to not allow access using said VPN. Other than that, Schwab is fine for our needs.

 

[Poopycat]

I love Schwab. Schwab has always been good to me and very responsive. The account rep for Schwab has included me in a few cool things, like free tickets to Star Wars movies and other entertainment. I haven’t taken advantage of these opportunities but it’s nice to be asked.

Whenever I have needed help, I’ve always received a quick response.

I haven’t had issues with Fidelity either. I hadn’t used them for a while; my 401k’s have been with other companies in the past several years but my current company uses Fidelity for 401k’s and the employee stock purchase plan. My rollover from my previous employer was very easy. In fact, Fidelity made it easy to set an individual brokerage account so I have purchased a few mutual funds recently. The only thing I don’t like is that the 401k home page shows all the companies where I had a Fidelity 401k or pension account, and rather than displaying my current company, it shows the colors and logo of a company I haven’t worked for in 15 years. I wish I could figure out how to change that, but it’s a minor irritation.

 

[Finance Dave]

I used to have Vanguard, but their customer service was terrible, their website and research online tools are weak, and they would not provide me a dedicated advisor for free. FIDO did, and IMO they are WAY better than Vanguard. I've moved all our funds to FIDO.

 

[beernutzbob]

I have retirement accounts at both TIAA and Vanguard and taxable investments at Schwab (since 1984). Schwab customer service is far ahead of the other two as is their website. The worst of the three is TIAA though especially their customer service which has fallen off a steep cliff the last few years.

 

[bada bing]

The support for 401k are handled by a different group of people at fund companies.They use different tools and systems to service the participants.

My experience with Fidelity's group was a one phone call, with them sending a follow-up email months later.

+1

I have had great experience with Fidelity, but I interact with them through the Retirement Services group for my old mega-corp employer. I don't have any experience with Fidelity as a retail customer.That's different people and different phone numbers.

I am a retail customer at Schwab and also get great service there for 25 years and counting. No issues since I opened the accounts. My top preference is Schwab for an account custodian.

I had tIRA and Roth at Vanguard. I got tired of their continual minor incompetence and moved all accounts away 4 years ago. I very much admire Jack Bogle's legacy and I still like Vanguard ETF's (which can be held anywhere). Vanguard as a custodian ? I can and am now doing much better without them. JMO but Jack Bogle's brilliance was in pushing low cost indexing. His organization of Vanguard as a customer owned co-op was a mistake. Sounds good on paper, but every customer owned co-op I have ever dealt with (think utility companies) doesn't run very well because there isn't a laser focus on the business.

But it's all good and anyone should be able to find an adequate custodian for their account needs. Competition is good.

 

[24601NoMore]

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

At Vanguard, you can get 25 free trades (including tx-fee mutual funds) per year at the Flagship level ($1M+ in VG-branded assets). That's not inconsequential when comparing to FIDO, who I believe still charges $75 (!!!! who on earth still charges $75 per transaction?!) per fund purchase and Schwab, who charges up to $49.95. Fund sales are (I believe) transaction cost free at FIDO and incur an additional $49.95 fee at Schwab.

Those 25 "free" trades on funds that are not NTF can add up to nearly $2K ($1,875) per year.

As others have mentioned up thread, you can also hold a wide variety of popular VG funds like Wellesley, Wellington, Tax Managed Balanced and others far easier and free, (vs paying transaction fees) at VG.

All that said, there are some real trade-offs using VG. The biggest, IMHO, is no 24x7 customer service. They're only reachable M-F, 8-8. That can be a big deal when you have a concern about an account over a weekend and need to wait until Monday at 8 ET to reach them..

VG is also WAY behind FIDO and Schwab on account security. There's currently no secure 2FA - just 2FA via text, which can be easily compromised by SIM hacks. (FIDO, on the other hand, uses Symantec VIP Access that generates a random number every 60 seconds. WAY more secure). Many of us have requested that VG get with the times and implement something like VIP Access and despite repeated requests, VG just doesn't appear to care.

VG does offer a way to restrict logon access to only one computer, but that feature frequently doesn't work. Just happened to me yesterday - tried to log on, and the VG website didn't recognize my PC and wouldn't let me in. So, had to call to get access restored. Fortunately, it was during their (very limited) CS hours. I would have been SOL if it had been a weekend.

It's also taking a lot longer recently to reach a live rep at VG. I had to do a callback (about 10 min wait) yesterday. I seem to get FIDO reps live every time I call them (retail, not 401K) FWIW.

I'd be tempted to consolidate at FIDO or Schwab but the Mutual Fund fees (and ability to have Admiral Wellesley and Wellington among other VG Admiral funds without trading fees) is a biggy to me as I have a number of actively managed funds from companies like PIMCO, Dodge & Cox and others that I don't want to give up..(heresy, I know..), and I don't want to pay nearly $2K / year in MF trading fees at FIDO if I decide to move things around..

ETA - you can also buy the Institutional share class of popular PIMCO funds at VG (like PIMCO Income) with a $25K minimum at VG. Minimums are $1M elsewhere on those Institutional share classes..PIMCO funds usually have very high ERs, and the only class worth even thinking of holding is Institutional for their lower (but still comparatively/ridiculously high) ERs.

 

[gayl]

... actively managed funds ... don't want to pay nearly $2K / year in MF trading fees

Isn't that an oxymoron? MFs close end of day so you cannot react mid day. Have you thought about ETFs which trade like stocks and will have lower expense ratios than the MFs you're mentioning?

 

[24601NoMore]

Isn't that an oxymoron? MFs close end of day so you cannot react mid day. Have you thought about ETFs which trade like stocks and will have lower expense ratios than the MFs you're mentioning?

No. Trading fees apply every time you buy or sell a TX fee fund at Schwab, and every time you buy a TX fee fund at FIDO. Obviously, that's only at end of day NAV - but any newly acquired shares, disposed shares, moving shares between funds will incur a "trading" (transaction) fee - even though that trade is at end of day NAV.

 

[gayl]

No. Trading fees apply every time you buy or sell a TX fee fund at Schwab, and every time you buy a TX fee fund at FIDO. Obviously, that's only at end of day NAV - but any newly acquired shares, disposed shares, moving shares between funds will incur a "trading" (transaction) fee - even though that trade is at end of day NAV.

Looking at a recent trade on Schwab: 0 commission / 0.04 exchange fee. Other recent trade 0 commission / 0.33 exchange fee. Wow. You must be doing more than my high of 300 trades per year to get to $2000 in exchange fees!!!! But then I do individual stocks and ETFs

 

[24601NoMore]

Looking at a recent trade on Schwab: 0 commission / 0.04 exchange fee. Other recent trade 0 commission / 0.33 exchange fee. Wow. You must be doing more than my high of 300 trades per year to get to $2000 in exchange fees!!!! But then I do individual stocks and ETFs

I'm talking about mutual funds, not ETFs and stocks. I thought that was pretty clear in my original post..

Schwab and FIDO do have many "NTF" (non transaction fee) funds. But many of the better ones (eg: from PIMCO) are "Transaction Fee" funds that you incur $75 per buy at FIDO and $49.95 per buy and another $49.95 per sell at Schwab.

Not everyone invests purely in ETFs and individual stocks. There are areas where indexing through ETFs is appropriate (eg: S&P500 index fund) but other areas (Fixed Income, International, some Value funds) where Active management does make sense.

 

[beernutzbob]

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

At Vanguard, you can get 25 free trades (including tx-fee mutual funds) per year at the Flagship level ($1M+ in VG-branded assets). That's not inconsequential when comparing to FIDO, who I believe still charges $75 (!!!! who on earth still charges $75 per transaction?!) per fund purchase and Schwab, who charges up to $49.95. Fund sales are (I believe) transaction cost free at FIDO and incur an additional $49.95 fee at Schwab.

Those 25 "free" trades on funds that are not NTF can add up to nearly $2K ($1,875) per year.

As others have mentioned up thread, you can also hold a wide variety of popular VG funds like Wellesley, Wellington, Tax Managed Balanced and others far easier and free, (vs paying transaction fees) at VG.

All that said, there are some real trade-offs using VG. The biggest, IMHO, is no 24x7 customer service. They're only reachable M-F, 8-8. That can be a big deal when you have a concern about an account over a weekend and need to wait until Monday at 8 ET to reach them..

VG is also WAY behind FIDO and Schwab on account security. There's currently no secure 2FA - just 2FA via text, which can be easily compromised by SIM hacks. (FIDO, on the other hand, uses Symantec VIP Access that generates a random number every 60 seconds. WAY more secure). Many of us have requested that VG get with the times and implement something like VIP Access and despite repeated requests, VG just doesn't appear to care.

VG does offer a way to restrict logon access to only one computer, but that feature frequently doesn't work. Just happened to me yesterday - tried to log on, and the VG website didn't recognize my PC and wouldn't let me in. So, had to call to get access restored. Fortunately, it was during their (very limited) CS hours. I would have been SOL if it had been a weekend.

It's also taking a lot longer recently to reach a live rep at VG. I had to do a callback (about 10 min wait) yesterday. I seem to get FIDO reps live every time I call them (retail, not 401K) FWIW.

I'd be tempted to consolidate at FIDO or Schwab but the Mutual Fund fees (and ability to have Admiral Wellesley and Wellington among other VG Admiral funds without trading fees) is a biggy to me as I have a number of actively managed funds from companies like PIMCO, Dodge & Cox and others that I don't want to give up..(heresy, I know..), and I don't want to pay nearly $2K / year in MF trading fees at FIDO if I decide to move things around..

ETA - you can also buy the Institutional share class of popular PIMCO funds at VG (like PIMCO Income) with a $25K minimum at VG. Minimums are $1M elsewhere on those Institutional share classes..PIMCO funds usually have very high ERs, and the only class worth even thinking of holding is Institutional for their lower (but still comparatively/ridiculously high) ERs.

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.

 

[gayl]

I'm talking about mutual funds, not ETFs and stocks. I thought that was pretty clear in my original post..

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 in not charging to trade their proprietary MFs but will charge on the fund families you like)