Fidelity or Vanguard

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
DKelly
Posts: 39
Joined: Mon Jan 12, 2015 7:58 pm

Fidelity or Vanguard

Post by DKelly »

We each have a 401k at Fidelity. Our taxable accounts are (now) at Vanguard. Where should we set up our Traditional to Backdoor Roth IRAs?

Is one firm easier or better, or is a matter of personal preference? We will be contributing the max each year going forward. Does one firm have better fund choices?
User avatar
ixohoxi
Posts: 132
Joined: Fri Nov 22, 2013 1:58 pm

Re: Fidelity or Vanguard

Post by ixohoxi »

I think Vanguard has better products, and Fidelity has better service. Holding Vanguard ETFs in a Fidelity account you get the best of both.
Henceforth, content shall be my aim, and anticipation my joy. -Alfred Billings Street
User avatar
ruralavalon
Posts: 26351
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: Fidelity or Vanguard

Post by ruralavalon »

Vanguard has a much broader selection of good low expense ratio funds.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
User avatar
BL
Posts: 9874
Joined: Sun Mar 01, 2009 1:28 pm

Re: Fidelity or Vanguard

Post by BL »

I believe it is no cost to leave Vanguard IRAs, while I am not so sure that is true of other places.
User avatar
Youngblood
Posts: 712
Joined: Fri Jan 04, 2008 6:18 am

Re: Fidelity or Vanguard

Post by Youngblood »

I enjoy having both accounts. Research for me is better at Fido.
"I made my money by selling too soon." | Bernard M. Baruch
rotorhead
Posts: 576
Joined: Wed Mar 17, 2010 3:59 pm
Location: Florida

Re: Fidelity or Vanguard

Post by rotorhead »

In my working years, my company 401k was managed by Fidelity. After retirement I rolled it over to Fidelity. Have been very satisfied with them. They have a retail store near our home, so that's an advantage; though I've only been over there 2 or 3 times. Online customer service is excellent. They never bother, nor try to sell me anything; and are very responsive whenever I have question or need help, such as tweaking RMD's. Their Spartan funds have low ER's; and are competitive to VG.

On the other hand we have wife's rollover IRA with Vanguard; done by design. Have been very satisfied with them as well. Nice and simple website, and absolutely no problems in dealing with them. Good choice of low cost funds. Monthly and annual reports well constructed, and easy to read.

In the next couple of years or so we will wind up at one or the other for simplicity's sake; but honestly, if we had to make a choice today, I could flip a coin and would not be disappointed either way.
User avatar
Leif
Posts: 3705
Joined: Wed Sep 19, 2007 4:15 pm

Re: Fidelity or Vanguard

Post by Leif »

I have funds at both and agree with all the above posts.

I personally prefer mutual funds over equivalent ETFs. If the Fidelity Spartan funds give you all the choices you need I would go with Fidelity. Otherwise, I would probably go with Vanguard.
sport
Posts: 12094
Joined: Tue Feb 27, 2007 2:26 pm
Location: Cleveland, OH

Re: Fidelity or Vanguard

Post by sport »

Fidelity is in business to make a profit for the family that owns it. Vanguard is in business to provide low cost investing to its customers. Fidelity has mostly high cost options and a small number of low cost choices. The only reason Fidelity has those choices is because it is in competition with Vanguard. Were it not for Vanguard, Fidelity would not have those choices. I prefer to give my business to the company responsible for the low cost options we have today. Vanguard also has the widest range of low cost funds because all of their funds are low cost. In other words, Vanguard's motivation is for me to be successful with their products, while Fidelity's motivation is to make as much money from my business as they can.
Jeff
Topic Author
DKelly
Posts: 39
Joined: Mon Jan 12, 2015 7:58 pm

Re: Fidelity or Vanguard

Post by DKelly »

Thank you all for your insight.
User avatar
Toons
Posts: 14467
Joined: Fri Nov 21, 2008 9:20 am
Location: Hills of Tennessee

Re: Fidelity or Vanguard

Post by Toons »

6 in one hand ,half a dozen in the other :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
Spirit Rider
Posts: 13977
Joined: Fri Mar 02, 2007 1:39 pm

Re: Fidelity or Vanguard

Post by Spirit Rider »

jsl11 wrote:In other words, Vanguard's motivation is for me to be successful with their products, while Fidelity's motivation is to make as much money from my business as they can.
Jeff
I think you are quite naïve to believe this. Both Vanguard and Fidelity are determined to grow their business and have healthy gross profits. This is the same mentality that thinks that mutual insurance companies are so much better than the better for profit insurance companies such as Amica, USAA, etc... They are not.

Sure Vanguard has great index funds, but I happen to believe that it is the competition from Fidelity, other index fund companies and ETFs that have forced them to be cost competitive over the last ten - fifteen years.

This is not John Bogle's Vanguard anymore. Pay attention to Vanguard's marketing over the last decade, it has been towards higher expense products. They are still a great company and offer many of the best indexed products for individual investors, but don't believe for a minute that their motivations are purely altruistic.

Don't associate human traits to a business. Evaluate products entirely on their pros and cons.
Jack FFR1846
Posts: 18499
Joined: Tue Dec 31, 2013 6:05 am
Location: 26 miles, 385 yards west of Copley Square

Re: Fidelity or Vanguard

Post by Jack FFR1846 »

I have a 3 fund portfolio in spartan advantage index funds. The bond fud is equal in er to vanguard, the international fund is 17% more expensive at vanguard and the total stock is 20% more expensive at Fidelity. I may move my total stock to vanguard. $650,000 moved would save me $65 a year.

They are the same
Bogle: Smart Beta is stupid
sport
Posts: 12094
Joined: Tue Feb 27, 2007 2:26 pm
Location: Cleveland, OH

Re: Fidelity or Vanguard

Post by sport »

Spirit Rider wrote:
jsl11 wrote:In other words, Vanguard's motivation is for me to be successful with their products, while Fidelity's motivation is to make as much money from my business as they can.
Jeff
I think you are quite naïve to believe this. Both Vanguard and Fidelity are determined to grow their business and have healthy gross profits. This is the same mentality that thinks that mutual insurance companies are so much better than the better for profit insurance companies such as Amica, USAA, etc... They are not.

Sure Vanguard has great index funds, but I happen to believe that it is the competition from Fidelity, other index fund companies and ETFs that have forced them to be cost competitive over the last ten - fifteen years.

This is not John Bogle's Vanguard anymore. Pay attention to Vanguard's marketing over the last decade, it has been towards higher expense products. They are still a great company and offer many of the best indexed products for individual investors, but don't believe for a minute that their motivations are purely altruistic.

Don't associate human traits to a business. Evaluate products entirely on their pros and cons.
Vanguard wants to grow their business. This results in lower fees for all their customers, old and new. In fact, over the years, Vanguard has been lowering their prices whenever they can. Vanguard is the leader in low costs. Fidelity is a follower, offering low costs only when necessary to compete with Vanguard. The owners of Fidelity, the Johnson family, are some of the richest people in the United States. Vanguard returns its profits to the shareholders of its funds through lower expenses. Fidelity has brick and mortar stores all over the country. Who do think pays for those stores? Vanguard's employee do not work on commission. I would expect the Fidelity brokers who sell the expensive funds have an incentive to act in their own self interest. I don't think I am naïve at all.
User avatar
bengal22
Posts: 2146
Joined: Sat Dec 03, 2011 5:20 pm
Location: Ohio

Re: Fidelity or Vanguard

Post by bengal22 »

Spirit Rider wrote:
jsl11 wrote:In other words, Vanguard's motivation is for me to be successful with their products, while Fidelity's motivation is to make as much money from my business as they can.
Jeff
I think you are quite naïve to believe this. Both Vanguard and Fidelity are determined to grow their business and have healthy gross profits. This is the same mentality that thinks that mutual insurance companies are so much better than the better for profit insurance companies such as Amica, USAA, etc... They are not.

Sure Vanguard has great index funds, but I happen to believe that it is the competition from Fidelity, other index fund companies and ETFs that have forced them to be cost competitive over the last ten - fifteen years.

This is not John Bogle's Vanguard anymore. Pay attention to Vanguard's marketing over the last decade, it has been towards higher expense products. They are still a great company and offer many of the best indexed products for individual investors, but don't believe for a minute that their motivations are purely altruistic.

Don't associate human traits to a business. Evaluate products entirely on their pros and cons.
Agree. I have both and find them equally as good. Vanguard chose low cost to expand their business and Fidelity chose low cost to expand their business.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley
sport
Posts: 12094
Joined: Tue Feb 27, 2007 2:26 pm
Location: Cleveland, OH

Re: Fidelity or Vanguard

Post by sport »

bengal22 wrote:Agree. I have both and find them equally as good. Vanguard chose low cost to expand their business and Fidelity chose low cost to expand their business.
Not quite. Vanguard was always low cost with costs being reduced as Vanguard grew. Fidelity was originally high cost, and still is. They just added a small number of inexpensive funds to compete with Vanguard.
User avatar
Gamma Ray
Posts: 510
Joined: Sun Feb 01, 2015 7:16 pm
Location: Bouncing between FL and NYC

Re: Fidelity or Vanguard

Post by Gamma Ray »

With my short research, I found vanguard to be more simplified and fidelity to be more complicated (not necessarily a bad thing)
Fidelity website looks fresh compared to vanguard, though, but I've never seen their control panels, if it's important to you maybe you should also get some feedback on how user friendly their websites, mobile apps and dashboards are.
User avatar
bengal22
Posts: 2146
Joined: Sat Dec 03, 2011 5:20 pm
Location: Ohio

Re: Fidelity or Vanguard

Post by bengal22 »

jsl11 wrote:
bengal22 wrote:Agree. I have both and find them equally as good. Vanguard chose low cost to expand their business and Fidelity chose low cost to expand their business.
Not quite. Vanguard was always low cost with costs being reduced as Vanguard grew. Fidelity was originally high cost, and still is. They just added a small number of inexpensive funds to compete with Vanguard.
I am sure vanguard originally had a market plan that emphasized low cost to expand their market share. Does it really matter who thought of it first.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley
sport
Posts: 12094
Joined: Tue Feb 27, 2007 2:26 pm
Location: Cleveland, OH

Re: Fidelity or Vanguard

Post by sport »

bengal22 wrote:
jsl11 wrote:
bengal22 wrote:Agree. I have both and find them equally as good. Vanguard chose low cost to expand their business and Fidelity chose low cost to expand their business.
Not quite. Vanguard was always low cost with costs being reduced as Vanguard grew. Fidelity was originally high cost, and still is. They just added a small number of inexpensive funds to compete with Vanguard.
I am sure vanguard originally had a market plan that emphasized low cost to expand their market share. Does it really matter who thought of it first.
In my opinion, Fidelity would never have had low cost funds were it not for Vanguard. We have Vanguard and John Bogle to thank for the low cost options available today. I prefer to reward Vanguard with my business as a thank you. Fidelity is just another financial company that will take advantage of their customers with high priced products given the opportunity.
User avatar
Gamma Ray
Posts: 510
Joined: Sun Feb 01, 2015 7:16 pm
Location: Bouncing between FL and NYC

Re: Fidelity or Vanguard

Post by Gamma Ray »

jsl11 wrote:
bengal22 wrote:
jsl11 wrote:
bengal22 wrote:Agree. I have both and find them equally as good. Vanguard chose low cost to expand their business and Fidelity chose low cost to expand their business.
Not quite. Vanguard was always low cost with costs being reduced as Vanguard grew. Fidelity was originally high cost, and still is. They just added a small number of inexpensive funds to compete with Vanguard.
I am sure vanguard originally had a market plan that emphasized low cost to expand their market share. Does it really matter who thought of it first.
In my opinion, Fidelity would never have had low cost funds were it not for Vanguard. We have Vanguard and John Bogle to thank for the low cost options available today. I prefer to reward Vanguard with my business as a thank you. Fidelity is just another financial company that will take advantage of their customers with high priced products given the opportunity.
These people seem to agree with most of you:
http://lifehacker.com/five-best-investm ... 1628737219
August, 2014

Betterment 11.54% (259 votes)
Vanguard 51.25% (1,150 votes)
Fidelity 23.98% (538 votes)
TD Ameritrade 9.76% (219 votes)
Bogleheads 3% (78 votes)
Total Votes: 2,244
malabargold
Posts: 689
Joined: Fri Aug 08, 2014 8:16 am

Re: Fidelity or Vanguard

Post by malabargold »

Fidelity has far more content, and better help with longer hours.
Vanguard has offered very competitive investment products, and year by year
Fidelity is approaching Vanguard's low cost options, not only with Spartan, but
with comission-free ishares.
Both are fine IMO.
User avatar
Gamma Ray
Posts: 510
Joined: Sun Feb 01, 2015 7:16 pm
Location: Bouncing between FL and NYC

Re: Fidelity or Vanguard

Post by Gamma Ray »

malabargold wrote:Fidelity has far more content, and better help with longer hours.
Vanguard has offered very competitive investment products, and year by year
Fidelity is approaching Vanguard's low cost options, not only with Spartan, but
with comission-free ishares.
Both are fine IMO.
What does longer hours mean? Do you mean contact/support? How often do you contact them?
User avatar
ruralavalon
Posts: 26351
Joined: Sat Feb 02, 2008 9:29 am
Location: Illinois

Re: Fidelity or Vanguard

Post by ruralavalon »

malabargold wrote:Fidelity has far more content, and better help with longer hours.
Vanguard has offered very competitive investment products, and year by year
Fidelity is approaching Vanguard's low cost options, not only with Spartan, but
with comission-free ishares.
Both are fine IMO.
Fidelity has only about a dozen low expense ratio mutual funds, their Spartan Advantage funds. Every Vanguard mutual fund has a low expense ratio.

Vanguard's customer service hours are 8AM to 10 PM weekdays and 9AM to 4PM Saturday.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
SGM
Posts: 3341
Joined: Wed Mar 23, 2011 4:46 am

Re: Fidelity or Vanguard

Post by SGM »

Vanguard has never cold called me to buy an investment. A Fidelity agent did so 4 years ago. It was an inappropriate annuity product. Maybe this was a rogue agent. He didn't seem to get the message immediately which I don't understand because I can be very abrupt with unwanted sales calls. It is a lot easier to get low cost funds through Vanguard and many more funds are low cost. You won't get a rogue call to purchase anything from Vanguard.

I only dealt with Fidelity because several years ago Vanguard required a third party to be involved in a solo 401k. That is no longer required. I like the ownership structure of Vanguard better.

I don't like all the advertising Vanguard is doing, but it is still the best mutual fund company around. You may find one or two fund companies with slightly lower expense ratios for a few funds that are used to attract customers in the hope of the customers buying higher cost products. I will stick with Vanguard.
derosa
Posts: 464
Joined: Wed Jul 24, 2013 5:18 pm

Re: Fidelity or Vanguard

Post by derosa »

I guess I am not understanding the question. You now have accounts at both places so you have experience at both places. Well what has been your experience?
gpburdell
Posts: 329
Joined: Sun Jun 17, 2012 9:01 pm

Re: Fidelity or Vanguard

Post by gpburdell »

jjaster7 wrote:I think Vanguard has better products, and Fidelity has better service. Holding Vanguard ETFs in a Fidelity account you get the best of both.
bingo. i swapped all my vanguard accounts to fidelity and couldn't be happier. fido has the better website, apps, tools, etc it's not even in the same ballpark. any brokerage can hold vanguard etfs so u don't have to limit your account to vanguard. i've heard good things about schwab too. if i get worried that i'm holding too much of my assets in one place; i'll diversify to schwab.

does vanguard even allow you have to have funds and stocks in the same account yet? they didn't several years ago, which was very annoying.

fidelity lets u buy/sell many ishares etfs commission free if u are worried about that. i prefer vanguard etfs and buy in several thousand $ chunks so the commission is negligible. but, it's nice that i can sell a vanguard etf then buy the equivalent ishares etf for free or vice versa for tax loss harvesting.
User avatar
Gamma Ray
Posts: 510
Joined: Sun Feb 01, 2015 7:16 pm
Location: Bouncing between FL and NYC

Re: Fidelity or Vanguard

Post by Gamma Ray »

gpburdell wrote:
jjaster7 wrote:I think Vanguard has better products, and Fidelity has better service. Holding Vanguard ETFs in a Fidelity account you get the best of both.
bingo. i swapped all my vanguard accounts to fidelity and couldn't be happier. fido has the better website, apps, tools, etc it's not even in the same ballpark. any brokerage can hold vanguard etfs so u don't have to limit your account to vanguard.
What is Fidelity earning from this transaction? Do they get a cut on expenses somehow?
User avatar
msi
Posts: 706
Joined: Sun Feb 17, 2008 10:15 pm

Re: Fidelity or Vanguard

Post by msi »

gpburdell wrote:
jjaster7 wrote: does vanguard even allow you have to have funds and stocks in the same account yet? they didn't several years ago, which was very annoying.
They do now with the upgraded accounts. It's one account for brokerage and Vanguard funds.
feh
Posts: 2011
Joined: Sat Dec 15, 2012 10:39 am

Re: Fidelity or Vanguard

Post by feh »

gpburdell wrote:
jjaster7 wrote:I think Vanguard has better products, and Fidelity has better service. Holding Vanguard ETFs in a Fidelity account you get the best of both.
bingo. i swapped all my vanguard accounts to fidelity and couldn't be happier. fido has the better website, apps, tools, etc it's not even in the same ballpark. any brokerage can hold vanguard etfs so u don't have to limit your account to vanguard. i've heard good things about schwab too. if i get worried that i'm holding too much of my assets in one place; i'll diversify to schwab.
I also hold V funds in my Fido acocunts. As long as you aren't buying on a regular basis ($75 a crack), it's a good situation.

PS - if you go the ETF route, the fee is about $8
Last edited by feh on Thu Feb 05, 2015 2:03 pm, edited 1 time in total.
invst65
Posts: 644
Joined: Thu Nov 27, 2014 10:04 am

Re: Fidelity or Vanguard

Post by invst65 »

Call me paranoid but I have accounts at both to mitigate risk.
chaz
Posts: 13604
Joined: Tue Feb 27, 2007 1:44 pm

Re: Fidelity or Vanguard

Post by chaz »

Vanguard is good and very safe.
Chaz | | “Money is better than poverty, if only for financial reasons." Woody Allen | | http://www.bogleheads.org/wiki/index.php/Main_Page
J295
Posts: 3401
Joined: Sun Jan 01, 2012 10:40 pm

Re: Fidelity or Vanguard

Post by J295 »

We have accounts at both. I prefer Fidelity due to better service.
livesoft
Posts: 86075
Joined: Thu Mar 01, 2007 7:00 pm

Re: Fidelity or Vanguard

Post by livesoft »

SGM wrote:I don't like all the advertising Vanguard is doing, ...
Lots of baby photos nowadays in their ads with big eyes. :shock: <- baby photo.

I have accounts at both. Some things that Fidelity has just do not matter at all, such as research and more content.

Here is a scenario where you might want to have accounts at both:

On Monday, the stock market drops 5%, so at Fidelity you exchange from FSITX (total bond index) into FSTVX (total US stock index).
On Tuesday, stock market goes back up 5%, but you cannot exchange from FSTVX to FSITX because of the early redemption fee, so you use your Vanguard account and exchange from VTSAX into VBTLX.

Use cannot use ETFs in a single account either because you will get caught free-riding.

If you don't think something like this will ever happen, look at the first two weeks of August 2011.
Wiki This signature message sponsored by sscritic: Learn to fish.
Post Reply