Fidelity vs. Vanguard: Which is best?

[sailfish]

It seemed pretty easy to set up distributions from my wife's Vanguard IRA acct via the online method. I just set up a monthly bank transfer account with her credit union checking account. We can easily change amounts, and take out withholding for Federal and state. Never had an issue with VG

 

[45th Birthday]

Just a bit of data on the VG vs Fido question; regarding customer service.

My accounts are with Fido but, I do have some VG funds. After several months of ownership, I noticed that I had Wellington (VWELX) vs Wellington Admiral (VWENX) shares in my taxable account, even though my account balance is large enough to qualify for Admiral shares, which have a 0.17% vs 0.25% ER.

So, I called a Fido rep, and spent <2 mins on the line while she confirmed that they could do a non-taxable exchange. I'll get an email Monday confirming the transaction. Boom! Done!

I hate Vanguard because of their poor website, stupid, inflexible policies, and lack of transparency. However, I have a bunch of money in an Admiral class bond fund with them. I was messing around on Fido trying to buy the same fund, and it gave me an error saying I couldn't do Admiral. Are you saying I can call and have it changed? If so, I'm going to move the account.

 

[LOL!]

Vanguard actively-managed Admiral funds are available at other brokerages. These include Wellesley, Wellington, GNMA, short-term investment grade bond, and so on.

Vanguard index funds in the Admiral share class are NOT available at other brokerages. However, Vanguard index funds in the Signal share class (same low expense ratio at Admiral) ARE available at other brokerages.

Of course, the other brokerage has to make them available, so one will need to check. Often the customer service reps of the other brokerage will be clueless about all this.

I know that WellsFargo has commission-free Vanguard funds for folks grandfathered into the PMA/WellsTrade deal of 100 free trades per year. I have owned both Signal share class and Admiral share class funds in the past at WellsTrade, but no longer do so. BTW, WellsTrade is better than both Vanguard and Fidelity if one wishes to have a portfolio of just funds and ETFs.

 

[Huston55]

I hate Vanguard because of their poor website, stupid, inflexible policies, and lack of transparency. However, I have a bunch of money in an Admiral class bond fund with them. I was messing around on Fido trying to buy the same fund, and it gave me an error saying I couldn't do Admiral. Are you saying I can call and have it changed? If so, I'm going to move the account.

Yes, just call a Fido rep.

Vanguard actively-managed Admiral funds are available at other brokerages. These include Wellesley, Wellington, GNMA, short-term investment grade bond, and so on.

Vanguard index funds in the Admiral share class are NOT available at other brokerages. However, Vanguard index funds in the Signal share class (same low expense ratio at Admiral) ARE available at other brokerages.

Of course, the other brokerage has to make them available, so one will need to check. Often the customer service reps of the other brokerage will be clueless about all this.

I know that WellsFargo has commission-free Vanguard funds for folks grandfathered into the PMA/WellsTrade deal of 100 free trades per year. I have owned both Signal share class and Admiral share class funds in the past at WellsTrade, but no longer do so. BTW, WellsTrade is better than both Vanguard and Fidelity if one wishes to have a portfolio of just funds and ETFs.

Better in what sense?

 

[sailfish]

I just remembered that one cannot buy ETFs in a Vanguard IRA account, only funds.

 

[eta2020]

Why would I buy Admiral Shares if I can buy Vanguard ETF and I can buy at brokerage of my choice? BTW I think ETF is more Tax efficient as well.

 

[LOL!]

I just remembered that one cannot buy ETFs in a Vanguard IRA account, only funds.

This is categorically false. We have purchased ETFs at Vanguard in an IRA account. One needs to sign up at Vanguard for Vanguard Brokerage Services (VBS) to be able to purchase non-mutual funds (i.e. stocks, CDs, ETFs, Fidelity mutual funds, etc), but this is relatively easy.

 

[LOL!]

Why would I buy Admiral Shares if I can buy Vanguard ETF and I can buy at brokerage of my choice? BTW I think ETF is more Tax efficient as well.

Since Vanguard ETFs are just another share class of Vanguard mutual funds just like Admiral shares are just another share class of Vanguard mutual funds, the ETF is NOT more tax efficient than the Admiral share class.

I repeat: The ETF not more tax efficient.

There is probably some confusion because ETFs are generally more tax efficient than actively-managed mutual funds. Plus Vanguard ETFs are generally more tax efficient than index funds from places other than Vanguard. But when comparing Vanguard ETFs with Vanguard mutual funds for the same index fund, there is no difference in tax efficiency.

 

[eta2020]

Since Vanguard ETFs are just another share class of Vanguard mutual funds just like Admiral shares are just another share class of Vanguard mutual funds, the ETF is NOT more tax efficient than the Admiral share class.

I repeat: The ETF not more tax efficient.

There is probably some confusion because ETFs are generally more tax efficient than actively-managed mutual funds. Plus Vanguard ETFs are generally more tax efficient than index funds from places other than Vanguard. But when comparing Vanguard ETFs with Vanguard mutual funds for the same index fund, there is no difference in tax efficiency.

I ran numbers comparing ETF versus Mutual Fund and to my surprise you are correct.

Still I prefer ETFs which I can transfer to broker of my choice.

 

[LOL!]

Better in what sense?

1. Better web interface for showing what's going on. No need to click through many pages to get info. A customizable single page view of all accounts, gains/losses, lots, etc is available.

2. Better 1099s that are complete with no errors that download into TurboTax easily.

3. Orders submitted to national markets, so that one can "see" them with real-time level II quotes at another broker. Fidelity seems to try to trade internally with its other customers, so if one submits an order it does not show up. I can see my orders appear and get executed from my other broker. I cannot do that with Fidelity.

4. Real-time updating of all transactions including pending transactions. One knows where one's money is and where it is going. Fidelity gives you different numbers depending on which web page you are looking at. Fidelity silently cancels money transfers without telling you.

5. Nearly instantaneous transfers of cash between checking and investing accounts. Real-time updating of those transactions (see #4 above), too.

6. Dividends are shown and credited as they are paid and not a day or two later. Vanguard seems to always take an extra day or two to let you see your dividends even from Vanguard ETFs.

7. Web pages are not trying to sell me some investment or fund. They are purely functional.

8. Free trades on Vanguard mutual funds, Vanguard ETFs, non-Vanguard funds, non-Vanguard ETFs, stocks, etc. This include Vanguard Admiral and Signal share classes of Vanguard funds. This is less expensive than both Fidelity and Vanguard.

9. Superb online banking with free online bill pay. Yes, Fidelity has something, but it just ain't the same.

Anyways, only folks grandfathered into the free 100 trades a year probably don't pay any commissions. New accounts have to pay about the same as Fidelity.

 

[gerntz]

Since you're comparing only two, it's "which is better".

 

[samclem]

I've got accounts at both Fido and Vanguard. I don't do a lot of trading, I don't buy individual stocks, etc. I don't need any analytical tools/screeners on my brokerage's web site (all I need, and it ain't much, is at Morningstar). I prefer Vanguard to Fido. While Fido does have some low-cost MFs, Vanguard has a larger selection. The VGD web page does everything I need it to do, including the new cost-basis tracking (and easy specific-shares identification when selling, it absolutely could not be better). Both the VGD reps and the Fido reps have beenhelpful when I've had an administrative question. There are Fido offices in many towns (including one a few miles from me) and I can't see needing them--just another thing to be paid for by somebody, and I always suspect it's the customers doing the paying.

 

[REWahoo]

Since you're comparing only two, it's "which is better".

The one without the grammar police?

 

[scrabbler1]

I have been with Fido for nearly 24 years and they have been great. I liked having investment centers nearby so I could meet with actual humans if I wanted to instead of talking on the phone with phone reps, some of whom were very good but once in a while I spoke to someone who was not as good (perhaps due to inexperience).

Back in 2005, I had a problem with their phone system I used to make purchases of mutual fund shares. Fido has made some changes to their system and they had a glitch which prevented me from making my purchases because they were not meeting their minimum amount. But I was grandfathered in under other rules which allowed me to make those lower purchases. When I spoke to various phone reps to make my purchases, a slow and arduous process compared to the quick automated phone service, I explained this to them and they promised to take the matter to a higher level (they did accept my order). Then in a Fido newsletter, some VP was boasting about the changes they made to their system. I got annoyed and wrote the guy, telling him how their so-called new-and-imprved system was failing me and how I would invest elsewhere (I have a small account with Dreyfus) until they fixed it. A few weeks later, the VP's assistant called me to discuss my letter and they eventually fixed the problem. I have kept that VP's assistant phone number in case I needed help at a high level, a privilege I have used (but not abused) a fre times over the years.

In the 18 months leading up to my ER back in 2007-08, I met with some Account Executives to go through my ER plan (such as setting up their RIP program) which was helpful. Just after I ERed 5 years ago, I was ready to create a Rollover IRA and to invest the company stock proceeds into a big bond fund. The AE was great at helping me through the whole process and get my greatly expanded accounts up and running. I also learned how to better use the Fido website.

When my friend's remaining parent passed away last year, he decided to take his inheritance to Fido (from Morgan Stanley, who had his mom's accounts). He did this after I told him how good Fido had been for me over the years. We have the same AE at our local office, and the AE helped him set up his inherited brokerage and IRA accounts although I did the actual transfer on one of them after the AE showed me how to do it. Even though my friend is not very savvy with these things, he can manage to log in and make some transactions on his own.

I mentioned Dreyfus where I have a small account from the 1990s I have kept open. The one thing I like a little better about them regarding their website is that they have a sitekey you have to verify before you can sign in. Fido does not have this security feature.

 

[travelover]

Fidelity helped me roll over my after-tax 401(k) contributions to a Roth IRA. It was a little like taking a camel through the eye of a needle as it was a gray area of the law and a limited opportunity. It would have been easier for them just to blow me off. So, when hand holding is needed, Fidelity has come through for me at their brick and mortar store.

 

[mpeirce]

I still use four. During the darks days in 2008 I was a bit more comfortable knowing my funds were spread out some.

I keep the most money in Vanguard. Their website has gotten better over the years (it was pretty bad a while back, but is decent now) and I've never encountered a problem with them.

Fidelity has an office 10 miles from here. It's been handy to be able to stop in on rare occasions. They also were very helpful consolidating my grandma's stocks when I was helping her out. (She had a munch of old stock certificates in a safe deposit box, long story...) So they earned some loyalty from me for that.

I also keep a Schwab account. This used to be my main investment account, but I mainly keep around now because my son's UTMA account is there.

And eTrade. It's also a legacy account holding the remaining shares of my old companies stock in there. It's has a record of all that. When I finally get that them all sold off, I'll probably close it down.

Honestly, all these companies provide pretty good web sites, fine service, and I can't think of really good reasons to favor one over the other. They're all good enough these days.

 

[nwsteve]

Just a bit of data on the VG vs Fido question; regarding customer service.

My accounts are with Fido but, I do have some VG funds. After several months of ownership, I noticed that I had Wellington (VWELX) vs Wellington Admiral (VWENX) shares in my taxable account, even though my account balance is large enough to qualify for Admiral shares, which have a 0.17% vs 0.25% ER.

So, I called a Fido rep, and spent <2 mins on the line while she confirmed that they could do a non-taxable exchange. I'll get an email Monday confirming the transaction. Boom! Done!

Huston55
Could you update us on if you were successful on this conversion, please.
I have checked with my Fido rep and am told

"we (fido) don't have a selling agreement to hold Admiral shares for our retail clients. If the bloggers happen to use our platform but have assets through an advisory firm they could potentially get that share class"

Are you a "retail" client or are your Fido positions through an employer 401k type investment?
Thanks
Nwsteve

 

[Free To Canoe]

Huston55
Could you update us on if you were successful on this conversion, please.
I have checked with my Fido rep and am told

"we (fido) don't have a selling agreement to hold Admiral shares for our retail clients. If the bloggers happen to use our platform but have assets through an advisory firm they could potentially get that share class"

Are you a "retail" client or are your Fido positions through an employer 401k type investment?
Thanks
Nwsteve

+1
This is kind of what they told me when I tried to upgrade my Wellesley shares.

 

[Bestwifeever]

Since you're comparing only two, it's "which is better".

Or which of the two is "best of all", not just of each other.

 

[nwsteve]

+1
This is kind of what they told me when I tried to upgrade my Wellesley shares.

I even had my rep double check but all she could learn was that Fido does have Vanguard's authorization to hold Admiral shares. When I moved my Vanguard position to Fidelity, I had to first convert my Admiral shares to standard shares before a transfer could be done.
Oh well, sounded great when Huston 55 said he was getting a conversion but guess it is not happening.
Thanks for confirming the understanding.
Nwsteve

 

[Huston55]

Huston55
Could you update us on if you were successful on this conversion, please.
I have checked with my Fido rep and am told

"we (fido) don't have a selling agreement to hold Admiral shares for our retail clients. If the bloggers happen to use our platform but have assets through an advisory firm they could potentially get that share class"

Are you a "retail" client or are your Fido positions through an employer 401k type investment?
Thanks
Nwsteve

So, I did get a return call from Fido as promised, to confirm the conversion. But, the rep told me she was mistaken and that Fido doesn't have an agreement to sell Admiral shares to retail customers. Good customer service, just not a good result. I guess that's...Boom, Undone!