WSJ (not com, yet): Fidelity Has A Vanguard Problem

[thefinancebuff]

Good question. Yes fidelity protects brokerage account but if you have 401k managed by Fidelity accessible via 401k.com that site is not protected by hardware key. (Even if you own Fidelity Brokerage Account with Hardware protection).

Vanguard doesn't offer a hardware key, period, 401k or not. If you have 401k managed by Vanguard, do you get the text message 2-factor security option?

 

[eta2020]

That is a bit like saying that parents do not care about their children because they don't protect them from everything that could harm them when they're off on their own. They provide less security that many of us customers would prefer, but that doesn't translate into a categorical "not caring" about their customers.

You are right. I just had a bad experience with 401k account and Fidelity when asking about Hardware key.

That is in spite of having with them 401k of size that makes Platinum Customer with E*Trade. That tells me if I have that type of sizable Brokerage Account with them I will get same "I don't care" treatment.

I am sure they also have very happy customers.

 

[eta2020]

Vanguard doesn't offer a hardware key, period, 401k or not. If you have 401k managed by Vanguard, do you get the text message 2-factor security option?

That is why I would buy Vanguard or Schwab ETFs using E*Trade or Schwab account.

 

[GrayHare]

Any idea why they refused to help you switch to similar Fidelity funds?

I think it was the reasons mentioned, rep laziness, plus the company's disinterest in earning from fund sales. Presumably Fido earns more via other avenues so devotes more effort there.

 

[audreyh1]

A huge number of iShares ETFs are commision free at Fidelity. Some of these ETFs are very low cost.

 

[eytonxav]

I don't get the Fidelity bashing that seems to be coming out in some of the posts. I have holdings at both firms, but I think Vanguard has a long way to go in offering one stop shopping and customer service like Fidelity does.

 

[eta2020]

A huge number of iShares ETFs are commision free at Fidelity. Some of these ETFs are very low cost.

100 Lowest Expense Ratio ETFs ? Cheapest ETFs | ETF Database
This table is literally ruled by Vanguard and Schwab.

The cost of iShares ETFs is substantially bigger then cost of Schwab and Vanguard.

IE S&P 500 for 4 cents on 100 dollars versus 7 cents on 100 dollars.
And Schwab gives you commission free trading on those cheaper ETFs.

 

[2B]

I used to wish that Vanguard had a debit card but then I realized I'm probably safer with having to physically move assets to my local bank to spend money. It provides an extra firewall to reduce the risk I have to straighten out a major hack on my accounts. There's only so much damage that can be done when my bank holds an almost trivial amount of my assets at any one time. Theoretically, I have no liability at either institution but the shock to my system would be orders of magnitude different.

I have a credit card I use for on line purchases and another I use for direct bill debits. I've never had an issue with the direct debit card but I have an issue about once per year with the on line card.

 

[audreyh1]

I used to wish that Vanguard had a debit card but then I realized I'm probably safer with having to physically move assets to my local bank to spend money. It provides an extra firewall to reduce the risk I have to straighten out a major hack on my accounts. There's only so much damage that can be done when my bank holds an almost trivial amount of my assets at any one time. Theoretically, I have no liability at either institution but the shock to my system would be orders of magnitude different.

I have a credit card I use for on line purchases and another I use for direct bill debits. I've never had an issue with the direct debit card but I have an issue about once per year with the on line card.

Even at Fidelity I have a debit card on a separate bank-type account.

 

[audreyh1]

100 Lowest Expense Ratio ETFs ? Cheapest ETFs | ETF Database
This table is literally ruled by Vanguard and Schwab.

The cost of iShares ETFs is substantially bigger then cost of Schwab and Vanguard.

IE S&P 500 for 4 cents on 100 dollars versus 7 cents on 100 dollars.
And Schwab gives you commission free trading on those cheaper ETFs.

I see iShare ETFs in that list like AGG with ER of 0.08% which is commision free at Fidelity. So my earlier point about some iShares ETFs stands. I didn't make any claim about more cheaper ETFs vs. anyone else or anything.

Great link though. And if I end up investing a large chunk in ETFs, I'll probably move the funds to invest to a Schwab account, especially as I am interested in their Investor Checking offering.

 

[nwsteve]

I don't get the Fidelity bashing that seems to be coming out in some of the posts. I have holdings at both firms, but I think Vanguard has a long way to go in offering one stop shopping and customer service like Fidelity does.

+1
No comparison in customer service, quality of web resources and breadth of service. Fidelity wins going away.

 

[NW Landlady]

If anything, go to Fido for FBIOX.....

Shall I say it.....

WHEEEE!

ooops! Now its doomed....never mind...

 

[GTFan]

If an investor pays higher costs/fees, his return will be lower than it would otherwise be. We can adopt better or more "lazy" tax strategies, rebalancing, try to time the market, etc, etc, but the expenses paid will always diminish the bottom line.

If you're comparing higher fees for buying an active fund vs. picking the stocks yourself, sure. But that isn't the argument - it's whether active funds including fees outperform low cost indexes over the long term. Your bottom line will be higher with an outperforming fund.

As mathjak said, you can pick a variety of Fidelity funds that have done so vs. the S&P over decades. I hold two of them, Growth Company and Contrafund. But the majority of what I have is in indexes, both Fidelity 401k and Vanguard. I'm about half and half between the two and that's ok for me.

 

[Texas Proud]

I used to wish that Vanguard had a debit card but then I realized I'm probably safer with having to physically move assets to my local bank to spend money. It provides an extra firewall to reduce the risk I have to straighten out a major hack on my accounts. There's only so much damage that can be done when my bank holds an almost trivial amount of my assets at any one time. Theoretically, I have no liability at either institution but the shock to my system would be orders of magnitude different.

I have a credit card I use for on line purchases and another I use for direct bill debits. I've never had an issue with the direct debit card but I have an issue about once per year with the on line card.

I will say that the shock to your system can be quite large.... one time I logged onto my Vanguard account and the balance came up as ZERO... thought I was going to have a heart attack.... logged out and logged back on and the same... called and was told they were doing some updates ... saw all my funds the next day... but it was a pretty big OMG moment....

 

[LOL!]

We have more assets in index funds at Fidelity than we have at Vanguard. I just don't care for Fidelity's web site. It has too much junk related to trading and research which are just noise to me. I just don't care for any Fidelity insight or commentary since it is all financial porn.

If one wanted to find out the index mutual funds that Fidelity has, one simply cannot get right to them. They are hidden away. For instance, what is the ticker symbol of the Fidelity Freedom Index 2030 fund? Sure, I can get the ticker if I type in the full name, but what if I just search "index funds" at fidelity.com? No Freedom Index funds are mentioned on the landing page for that.

Vanguard has its problems, too, so Vanguard is not immune from sub par performance, but I will say that most of its white papers and insight articles pretty much speak to the indexing choir, so everything from Vanguard stays on message. Can't say that for Fidelity.

 

[mathjak107]

you have the option of selecting the old fidelity classic screen if you do not like the cluttered new layout , which i don't.

 

[BellBarbara]

Fidelity tries to sell too many funds and annuities to generate income. DH worked there - saw this. When he joined them (in technology side) we had to move all of our money into FIDO - they proposed 34 funds, all with the largest fees (no index or FIDO funds at all). They also recommended we buy annuities then - their proposal was a joke. They are all on commission. Yes, you can ignore all of this noise when they try to sell you this stuff, but many people do not know better. Increasing revenues? Sure, getting more money out of people in fees.

 

[mathjak107]

i can say even at our yearly consultation which i get as a private access customer i have never been lured to try to buy any product ever.

 

[bUU]

Ditto. And I'm just a regular everyday investor with them - I still get a free consultation each year - which has been very helpful in the past - and there was no pressure whatsoever.

 

[eytonxav]

I believe Fidelity's brokers are all on salary, not commission, and personally, they have never pushed high priced funds at me.

 

[mathjak107]

they are not on commission . they get salary and goal bonuses.

 

[H2ODude]

Fido fan here. Unless there was a substantial cost difference I wouldn't give up the service and the local center 4 miles from house. Have done two private client conferences at my request, like that they don't bug me for repeat visit unless I ask. I like being left alone! Now get off my lawn!

 

[BellBarbara]

Why do you think they presented us the proposal? I am really interested in your thoughts. Even BIL who was in financial services for a diff company was pretty shocked at the proposal. Even after DH retired, and we left our money there for a couple years trying to decide, they pitched him on annuities. Do you think they handle employees differently than external customers? These were two different agents. I think we got a new one because we moved (or maybe the other guy left, not sure)

 

[BellBarbara]

No axe to grind - they were a great employer, DH did great there. He worked on a lot of these systems you guys mention. We would probably not have been able to retire so early if not for their 401k bonus'. He was able to put so much away with maxing out his contributions, their match, and the 401k bonus. HUGE.

 

[BellBarbara]

DH says he worked on a huge system that paid commissions......maybe not all employees? Or has it changed recently? He left about 4 years ago.

Just found this. Maybe the correct word is not commissions but if 69% of an account's rep is variable based on variable pay - hmmmm.

https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/representative-compensation.pdf

> Conflicts of Interest
While Fidelity strives to design representative compensation plans that align the interests
of our clients with those of the representative in identifying appropriate products and
services, certain representatives have financial incentives to sell Fidelity proprietary
products, including but not limited to Rollover IRAs, products managed by Strategic
Advisors, and insurance products. Certain representatives also receive differing
compensation for different product types, for example, managed account and insurance
product sales, which require more in-depth engagement with clients, provide more
compensation than products such as money market funds. Importantly, representatives
do not have a financial incentive to promote Fidelity mutual funds over non-Fidelity
mutual funds. It is also important to note that in this area of compensation, as in all
others, Fidelity considers whether representatives are providing guidance about
appropriate products and services based upon customer needs. We take this approach to
client relationships very seriously, and review representative interactions in order to help
ensure this standard.