Fidelity vs Vanguard

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
foodstamp
Posts: 54
Joined: Sat Nov 23, 2013 6:15 pm

Fidelity vs Vanguard

Post by foodstamp »

Hello there. I realize this forum is somewhat biased in this regard, but would just like your opinion if you think it is worth it for me to open up a Vanguard account?

I've been a Fidelity customer for about 10 years. I've had multiple 401ks through there as well as their cash management account. I had a fiscal meltdown a few years ago through a crazy divorce and lost everything.

So basically I'm sort of starting over here and don't have a ton of money to invest at the outset. My 401k is at Fidelity thru work, and I'm going to open up an IRA. :moneybag :moneybag

My question is given my limited funds do you think Vanguard is appreciably better such that I should spend the time to open up a new account there and restart there? Or should I just stick with Fidelity?

Thank you nice Boglehead people.

:D
Infinity
Posts: 83
Joined: Thu Aug 08, 2013 1:58 pm

Re: Fidelity vs Vanguard

Post by Infinity »

Fidelity's Spartan series funds are basically equivalent to Vanguard's total market index funds, with nice low expense ratios.

I think choosing between Fidelity and Vanguard would be a matter of preference. You may find it easier to maintain all of your accounts at the same firm.
User avatar
rob
Posts: 3433
Joined: Mon Feb 19, 2007 6:49 pm
Location: Here

Re: Fidelity vs Vanguard

Post by rob »

Hit the search as this comes up very often.......

In my view Fido has the better web-site, tools etc and is far easier to deal with. Some of their funds are equal to Vanguard funds (see the Spartan funds) but in my view overall Vanguard has better lower cost funds. If your there with your 401K anyway, it's certainly not a bad location for your investments.
| Rob | Its a dangerous business going out your front door. - J.R.R.Tolkien
steve_14
Posts: 1507
Joined: Wed Jun 20, 2012 12:05 am

Re: Fidelity vs Vanguard

Post by steve_14 »

If you're happy with Fidelity, chances are switching won't make a huge difference in your final net worth.

I'm loyal to Vanguard since I don't care to have an adversarial "me vs them" relationship with the organization I've entrusted my life savings to.
sport
Posts: 9834
Joined: Tue Feb 27, 2007 3:26 pm
Location: Cleveland, OH

Re: Fidelity vs Vanguard

Post by sport »

At Vanguard, all the funds are low cost. At Fidelity, you have to be careful which funds you choose. Some (most?) are too expensive.
Jeff
User avatar
nisiprius
Advisory Board
Posts: 42543
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Fidelity vs Vanguard

Post by nisiprius »

My $0.02: it is an unimportant decision. There will always be things to irritate you about any firm you invest with. I had accounts at both Fidelity and Vanguard at the same time for about six years, and I would say that having accounts at two firms creates a large number of nuisance factors, so I did consolidate, and, OK, I moved everything to Vanguard. But it was practically a coin-flip decision.

The Wiki has an article with tips on Boglehead-style investing at Fidelity that you might glance at.

I would make the decision mostly on the basis of just how well you like Fidelity. If you like it, it's comfortable as an old shoe, etc. stick with it. Yes, if you plan to have the core of your investments be Vanguard mutual funds, there are some small bennies to moving to Vanguard, but they're less important than a get-nine-haircuts-and-the-tenth-is-free card. If what you really want is to own Admiral shares of Vanguard index funds, well, you can't do that at Fidelity, you will need to use what I would call "workarounds"--Vanguard ETFs, or arguably-just-as-good iShares ETFs or Fidelity Spartan mutual funds.

Generally speaking, Fidelity offers a somewhat wider and better range of ancillary services. For example, if you EVER use Fidelity's storefronts, well, Vanguard doesn't have storefronts.

If you don't care about any of that stuff and you just want the best place to set up a three-fund portfolio of Vanguard index funds, then, yes, move to Vanguard. But if you feel good about, and comfortable with, Fidelity (or Schwab or another firm), then, no, I would not move just out of brand loyalty.

Your degree of success in investing is not going to be affected by whether your accounts are at Fidelity or Vanguard, and frank it isn't going to be affected by whether the first letter of your fund names is V or F.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Call_Me_Op
Posts: 8076
Joined: Mon Sep 07, 2009 2:57 pm
Location: Milky Way

Re: Fidelity vs Vanguard

Post by Call_Me_Op »

IMO, no need to do it unless you want to diversify custodians.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
Infinity
Posts: 83
Joined: Thu Aug 08, 2013 1:58 pm

Re: Fidelity vs Vanguard

Post by Infinity »

Call_Me_Op wrote:IMO, no need to do it unless you want to diversify custodians.
What would be the benefit of that? Increased SIPC protection?

...Do you really think Vanguard or Fidelity is running a Ponzi scheme?
Mitchell777
Posts: 1154
Joined: Mon May 21, 2007 6:32 am

Re: Fidelity vs Vanguard

Post by Mitchell777 »

I have been with Vanguard for many years, but have dealt with Fidelity on numerous occasions for parent or my 401K. I believe Fidelity customer service is very good. I would just keep an eye on fund expenses comparing the two to see which may be best for you based on your individual investments
Sconie
Posts: 932
Joined: Sun Feb 07, 2010 10:23 am
Location: Arizona

Re: Fidelity vs Vanguard

Post by Sconie »

Both are professional, wonderfully-run, investment organizations; you really can't go wrong with either one. That said, all things being equal, I prefer invest my money with Vanguard---where my fellow shareholders and I are the owners---versus helping to further enrich Ned Johnson and his daughter Abigail.
I know you think you understand what you thought I said but I'm not sure you realize that what you heard is not what I meant. - Alan Greenspan
User avatar
abuss368
Posts: 23011
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Fidelity vs Vanguard

Post by abuss368 »

We have been Vanguard investors for a long time. It was the best financial decision we ever made.
John C. Bogle: “Simplicity is the master key to financial success."
User avatar
mhc
Posts: 4209
Joined: Mon Apr 04, 2011 10:18 pm
Location: NoCo

Re: Fidelity vs Vanguard

Post by mhc »

My work stuff is at Fidelity, and my personal stuff is at Vanguard. I prefer Vanguard, but both are top notch.

I prefer Vanguard because they have more low-cost index funds. For example, I cannot find a small-cap international index fund at Fidelity. Having more options is also useful for taxable accounts when it is time to TLH.
JohnF
Posts: 132
Joined: Mon Sep 02, 2013 7:29 pm

Re: Fidelity vs Vanguard

Post by JohnF »

I’m with Vanguard. But, living in a State (Georgia) where Vanguard does not provide the option of State tax withholding on IRA withdrawals tempts me to switch. However, I appreciate Vanguard’s emphasis on minimizing expenses, guess you can’t have it both ways.
Happy2BeFree

Re: Fidelity vs Vanguard

Post by Happy2BeFree »

I've been with Fidelity for 25 years and never had a problem with them. Always professional and exceedingly helpful. Last year I began investing in VG's mutual funds with taxable money. Love their minuscule expenses, excellent index funds, and shareholder-fund ownership structure.

I've been debating merging Fidel into VG for simplicity, but something always stops me. Though VG has more index options that I miss at Fidelity, VG's customer service is a crapshoot. At times they're superb (when I went through an inheritance transfer process), but recently they've been subpar (reps knowing less than I do about their own website and products, trying to sell me on switching to VG, etc.).

My experience is that Fidelity has better and more knowledgeable customer service, along with more active-trading features, which I don't care about; and Vanguard has rock-bottom expenses and a wider variety of index options (plus some great low-cost active funds).

I read a post on this site that said you can't expect VG's services (web and phone) to best Fidelity's because it's an at-cost shop. You get what you pay for in that way, essentially. That made sense to me. I think, as others have said, it's a personal decision and you can't go wrong either way, as long as you know what's important to you.
MnD
Posts: 4616
Joined: Mon Jan 14, 2008 12:41 pm

Re: Fidelity vs Vanguard

Post by MnD »

If your 401-K is at Fidelity and you like the service, I'd stick with Fidelity.
You have access to a huge number of ultra-low expense Funds via Fidelity Spartan and ETF's including Vanguard ETF's, which in most cases are superior to the regular share class.
VSS (Vanguard small cap international ETF) for example is ER .25% versus .45% for the regular fund which also has a .25% purchase and .25% redemption fee (yikes!).
Last edited by MnD on Tue Dec 03, 2013 11:54 am, edited 1 time in total.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
User avatar
midareff
Posts: 7323
Joined: Mon Nov 29, 2010 10:43 am
Location: Biscayne Bay, South Florida

Re: Fidelity vs Vanguard

Post by midareff »

I have been with both for many years and like them both. My core (94+%) is at VG. I keep a small ROTH and some taxable at Fidelity so my 2% AMEX and 1.5% Visa keep auto depositing the cash back. I use Fidelity for some specialty sector funds (read: play money) I can't get at VG. An example of that is Fidelity New Markets Income.. I rode that pony for about 6 years before VG opened an Emerging Market Bonds Fund.
JW-Retired
Posts: 7188
Joined: Sun Dec 16, 2007 12:25 pm

Re: Fidelity vs Vanguard

Post by JW-Retired »

Over the years I have whittled down my fund company count to just Fido and Vanguard and stopped there. They are both very good in that they offer all the extremely low cost funds you might need. Others have already mentioned their minor differences. IMO, none of these outweigh my liking the diversity of having our assets roughly split between both companies. No expectation it will happen, but if either of them ever does something we find really offensive we have a familiar exit path away. :D

The slight complexity of having to go to two websites doesn't bother me in the slightest. (Actually we have 3 to look at since we elected not to rollover the 401k.)
JW
Retired at Last
Jeff7
Posts: 329
Joined: Sat Nov 24, 2012 2:30 pm

Re: Fidelity vs Vanguard

Post by Jeff7 »

Sconie wrote:Both are professional, wonderfully-run, investment organizations; you really can't go wrong with either one. That said, all things being equal, I prefer invest my money with Vanguard---where my fellow shareholders and I are the owners---versus helping to further enrich Ned Johnson and his daughter Abigail.
And just the wealth disparity between Bogle and Fidelity's owner. As I understand it, one's a multimillionaire. The other's a billionaire. I don't know if the person at the helm at Vanguard now is similarly compensated, but I'd certainly hope that the philosophy there remains the same: The shareholders are the owners, and they get priority. Fidelity has a lot more focus on more expensive (profitable) active funds.


But, always sitting there in the back of my mind, is the idea that any system can be corrupted and broken.
User avatar
Watty
Posts: 21339
Joined: Wed Oct 10, 2007 3:55 pm

Re: Fidelity vs Vanguard

Post by Watty »

One major drawback of Fidelity is that their target date "Freedom" retirement funds have absurdly high expense ratios of around 0.81% compared to 0.17% for the Vanguard targeted date retirement funds. That would make huge difference over the years so the Fidelity Freedom funds would be a poor choice.

If you will be starting off with a modest amount then just being able to put it all into a targeted date fund can work well instead of trying juggle several index funds.
BanditKing
Posts: 630
Joined: Tue Oct 29, 2013 11:11 pm

Re: Fidelity vs Vanguard

Post by BanditKing »

I have my 401k at Fidelity and my Roth at taxable at vanguard. I prefer vanguard overall - I think the fees are better. I also prefer the website - but that is a personal preference.

If I ever leave my job, I'd roll the 401k over to Vanguard.

I think in the end, it's six of one and a half-dozen of the other.
Dandy
Posts: 6426
Joined: Sun Apr 25, 2010 7:42 pm

Re: Fidelity vs Vanguard

Post by Dandy »

Fidelity's Spartan Index funds compare favorably with VG's. Beyond that VG has the edge in costs. Fidelity probably has better CSRs and website. Vanguard seems to have a better focus on customers e.g. I believe they are more likely to close a hot fund than Fidelity. I remember Fidelity leaving the Magellan Fund open way too long and charging a front end fee even though it had 10's of billions of assets at the time.
Hey both are good firms with many good investment options and service. I consolidated to VG and am happy.
User avatar
JupiterJones
Posts: 2943
Joined: Tue Aug 24, 2010 3:25 pm
Location: Nashville, TN

Re: Fidelity vs Vanguard

Post by JupiterJones »

All things being equal, I'd lean slightly toward Vanguard just on the basis of their unique "client-owned" structure.

Although in my case, Fido is actually cheaper than Vanguard (due to not being able to get Vanguard Admiral shares in my workplace's 403b plan), and I'm happy enough with them to stay until that changes.
Stay on target...
User avatar
Sheepdog
Posts: 5664
Joined: Tue Feb 27, 2007 3:05 pm
Location: Indiana, retired 1998 at age 65

Re: Fidelity vs Vanguard

Post by Sheepdog »

Paul Merriman,Founder of Merriman Wealth Management, wrote his comparison of Vanguard and Fidelity http://www.marketwatch.com/story/fideli ... nt_popular. Among his comments are:

Many investors think the choice between having their money at Fidelity Investments or at Vanguard is a tossup. It's not.
Even though Fidelity is a great company with many successful funds, in my estimation, Vanguard is clearly better for investors who are building a portfolio of basic asset class funds.


Let's start by noting a fundamental difference between these two companies. Vanguard is actually owned by the shareholders of its mutual funds. If the company is profitable (and it is), those profits go to the people who own Vanguard funds, not to outside investors.

This brings us to the topic of fees and expenses paid by investors. Vanguard has no incentive to charge any more than necessary to keep the company healthy. But the owners of Fidelity do better when the company charges more to investors. So Fidelity's incentive is to charge what the traffic will bear.
For the 10 years ended Dec. 31, 2012, my moderate (60% equity) portfolio at Fidelity returned 7.8%; in that same period my moderate Vanguard portfolio returned 9.1%. The difference might not seem very important. But it is.


The lesson here isn’t really about whether to use Vanguard or Fidelity. The important lesson is never forget the potential damage high expenses, turnover and active management missteps can cost you in the long run.
All that truly matters in the end is that you loved.
User avatar
bengal22
Posts: 1916
Joined: Sat Dec 03, 2011 6:20 pm
Location: Ohio

Re: Fidelity vs Vanguard

Post by bengal22 »

I have been a long time investor with Vanguard(80's) and a long time investor with Fidelity(90"s). I have been very happy with both. They both have low cost index funds, excellent customer service, good web sites, and they both work hard to get you to invest with them. I really think the "we own Vanguard" is really a marketing ploy because at the end of the day the performance of their funds and the expense ratio is where us common investors get our reward. Neither customer is more motivated to satisfy their customer and does it really matter if the owner of Fidelity or the leadership of Vanguard gets rich? I have been happy with both Fidelity and Vanguard.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley
User avatar
danwhite77
Posts: 421
Joined: Thu Mar 08, 2012 9:21 am

Re: Fidelity vs Vanguard

Post by danwhite77 »

I'm a Vanguard investor. Here are two of my reasons:

http://www.reuters.com/article/2011/11/ ... HX20111123

http://money.cnn.com/2013/09/23/retirem ... y-lawsuit/

When you invest with Vanguard, you own Vanguard. When you invest with any other company, the company's management may or may not have your best interests in mind. It's impossible to overstate the importance of this ownership structure.

http://vanguardblog.com/2010/03/25/yes- ... ent-owned/

"Unlike all other mutual fund companies, Vanguard is client-owned. The clients who put their dollars in our mutual funds are the owners of those funds. And those funds, in turn, own Vanguard. The bottom line: Vanguard does not make a profit from operating our mutual funds."

Thank you Jack Bogle!
"While some mutual fund founders chose to make billions, he chose to make a difference." - Dedication to Jack Bogle in 'The Bogleheads' Guide to Investing'.
User avatar
bengal22
Posts: 1916
Joined: Sat Dec 03, 2011 6:20 pm
Location: Ohio

Re: Fidelity vs Vanguard

Post by bengal22 »

danwhite77 wrote:I'm a Vanguard investor. Here are two of my reasons:

http://www.reuters.com/article/2011/11/ ... HX20111123

http://money.cnn.com/2013/09/23/retirem ... y-lawsuit/

When you invest with Vanguard, you own Vanguard. When you invest with any other company, the company's management may or may not have your best interests in mind. It's impossible to overstate the importance of this ownership structure.

http://vanguardblog.com/2010/03/25/yes- ... ent-owned/

"Unlike all other mutual fund companies, Vanguard is client-owned. The clients who put their dollars in our mutual funds are the owners of those funds. And those funds, in turn, own Vanguard. The bottom line: Vanguard does not make a profit from operating our mutual funds."

Thank you Jack Bogle!
I on the other hand think that it is possible "to overstate the importance of this ownership structure." I would prefer to pick the mutual funds that meet my needs and have low expense ratios. Period. Both Fidelity and Vanguard are motivated to satisfy and meet the needs of their CUSTOMERS. I can't help but believe that someone, somewhere is making a profit from operating Vanguard mutual funds. Anyway to answer the OP both Fidelity and Vanguard are good companies to deal with.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley
User avatar
danwhite77
Posts: 421
Joined: Thu Mar 08, 2012 9:21 am

Re: Fidelity vs Vanguard

Post by danwhite77 »

bengal22 wrote: Both Fidelity and Vanguard are motivated to satisfy and meet the needs of their CUSTOMERS.
Not to get too technical . . . well, okay, to get too technical, Fidelity is motivated to satisfy the needs of (and thereby profit from) their CUSTOMERS. Vanguard is motivated to satisfy the needs of their OWNERS.
"While some mutual fund founders chose to make billions, he chose to make a difference." - Dedication to Jack Bogle in 'The Bogleheads' Guide to Investing'.
MnD
Posts: 4616
Joined: Mon Jan 14, 2008 12:41 pm

Re: Fidelity vs Vanguard

Post by MnD »

All I care about is the quality of service I receive and my costs.
I get the quality of service I want and expect through self-directed Schwab and Fidelity accounts.
The costs are a function of the funds I select - nearly all ultra-low cost ETF's from Vanguard, Schwab and iShares.

The fact that "others" can spend money at Fidelity or Schwab for hand-holding and/or expensive funds is irrelevant to me.
It actually may be an advantage since they are ones that are likely paying the freight for the nice web site, on-line tools, tight multiple account integration, dedicated customer service rep (Dave) that picks up the phone or calls me right back, 2% cash-back credit cards etc. that are available to all customers. Even the cheap ones like me. :mrgreen:
If someone else is paying too much at Fidelity, that's their tough luck.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
User avatar
nisiprius
Advisory Board
Posts: 42543
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Fidelity vs Vanguard

Post by nisiprius »

Infinity wrote:
Call_Me_Op wrote:IMO, no need to do it unless you want to diversify custodians.
What would be the benefit of that? Increased SIPC protection?

...Do you really think Vanguard or Fidelity is running a Ponzi scheme?
I think the truth is that nobody actually knows of an historically justified reason to diversify custodians, because nothing has yet happened that would have made it prudent. But it is possible to imagine scenarios. I personally consolidated to Vanguard because I didn't think "diversifying custodians" outweighed the nuisance of multiple accounts, but let me point out two not-too-paranoid reasons why one might want more than a single account.

a) IT diversification. The risk that one firm might encounter some really bad computer glitch that might make it difficult to access your account for a meaningful period of time.

b) Comparing treatment. When you have accounts at two firms X and Y, and one of them institutes some nasty new fee, and says "Oh, it's customary now, just about everyone is doing it," you will know whether they are telling the truth... and if the other firm isn't doing it, you're all ready to take your business there.

With regard to custodianship, there is a very tricky point I didn't figure out until a few years ago. What it boils down to is that if you really want to "diversify across custodians," then what is important is to have, say, your Total Stock Market Index holdings in the form of two different mutual funds from different fund companies, each of which uses a different custodial bank. Find out the custodial bank from the "statement of additional information."

SIPC protection doesn't apply to mutual funds itself, and AFAIK there is no direct government protection of the holdings of a mutual fund. The fund company says that the fund holds so many shares of GE, so many shares of Marriott, etc. The only guarantee of this is the organizational structure mandated by the Investment Company Act of 1940, which doesn't let the fund company hold its own shares, but requires them to be held at a separate custodial bank.

SIPC protection does not apply when you hold shares of a mutual fund directly in an account at a mutual fund company.

SIPC protection only applies to a second, extra layer of holding, when you are holding stocks or bonds or mutual funds at a brokerage. And, no, that doesn't mean it is safer to hold a mutual fund at a brokerage. In effect when you hold a mutual fund at a brokerage, you have ADDED a second layer of risk. Layer 1: Did the mutual fund really buy the shares of GE, Marriott, etc. for you? Layer 2: Did the brokerage really buy the shares of that mutual fund for you?

Holding a mutual fund at a brokerage adds the custodial risk of the broker on top of the custodial risk of the mutual fund itself. SIPC protection counteracts that second layer of risk.

SIPC protection is sort of "statement insurance." It guarantees that the brokerage is really holding the securities your statement says it is holding for you. But it doesn't provide any guarantees at all against fraud in the securities themselves. If your brokerage says you own 100 shares of Enron, the SIPC guarantees that you do or they'll make it up to you. But the SIPC doesn't guarantee that Enron itself isn't a scam.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
MnD
Posts: 4616
Joined: Mon Jan 14, 2008 12:41 pm

Re: Fidelity vs Vanguard

Post by MnD »

danwhite77 wrote:
bengal22 wrote: Both Fidelity and Vanguard are motivated to satisfy and meet the needs of their CUSTOMERS.
Not to get too technical . . . well, okay, to get too technical, Fidelity is motivated to satisfy the needs of (and thereby profit from) their CUSTOMERS. Vanguard is motivated to satisfy the needs of their OWNERS.
If the owners have quite homogeneous needs and expectations that's fine. But if (for example) a slight majority of the owners want a bare bones levels of service and the slight minority want a higher level of service, tools, account integration etc., you can potentially have significant problems with a mutual ownership model. A customer driven model with varying levels of costs and associated services can have a significant edge over a mutual ownership model in that case.

And you can mix and match - own Vanguard funds with the mutual ownership benefits held at a brokerage with a more customer-driven service model. :happy
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
User avatar
bengal22
Posts: 1916
Joined: Sat Dec 03, 2011 6:20 pm
Location: Ohio

Re: Fidelity vs Vanguard

Post by bengal22 »

deleted out of weariness
Last edited by bengal22 on Wed Dec 04, 2013 4:22 pm, edited 2 times in total.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley
User avatar
matjen
Posts: 2136
Joined: Sun Nov 20, 2011 11:30 pm

Re: Fidelity vs Vanguard

Post by matjen »

MnD wrote:All I care about is the quality of service I receive and my costs.
I get the quality of service I want and expect through self-directed Schwab and Fidelity accounts.
The costs are a function of the funds I select - nearly all ultra-low cost ETF's from Vanguard, Schwab and iShares.

The fact that "others" can spend money at Fidelity or Schwab for hand-holding and/or expensive funds is irrelevant to me.
It actually may be an advantage since they are ones that are likely paying the freight for the nice web site, on-line tools, tight multiple account integration, dedicated customer service rep (Dave) that picks up the phone or calls me right back, 2% cash-back credit cards etc. that are available to all customers. Even the cheap ones like me. :mrgreen:
If someone else is paying too much at Fidelity, that's their tough luck.

Interesting take on the free-riding at Fido or Schwab. ;-) I have my funds split between Fido and Vanguard. My wife is split between Fido and Schwab. I think they are all great but prefer the Fido website and obviously the convenience of the brick and mortar locations which I use a few times a year. At a minimum I get free coffee there every time I stop in. :-)
A man is rich in proportion to the number of things he can afford to let alone.
JW-Retired
Posts: 7188
Joined: Sun Dec 16, 2007 12:25 pm

Re: Fidelity vs Vanguard

Post by JW-Retired »

danwhite77 wrote: When you invest with Vanguard, you own Vanguard. When you invest with any other company, the company's management may or may not have your best interests in mind. It's impossible to overstate the importance of this ownership structure.

http://vanguardblog.com/2010/03/25/yes- ... ent-owned/

"Unlike all other mutual fund companies, Vanguard is client-owned. The clients who put their dollars in our mutual funds are the owners of those funds. And those funds, in turn, own Vanguard. The bottom line: Vanguard does not make a profit from operating our mutual funds."

Thank you Jack Bogle!
Ditto to the Jack Bogle thank you. But Jack isn't running the place anymore. Client-owned or non-profit doesn't automatically lead to low cost, or good service, or lower paid executives. Speaking as one "client owner", IMO I/we owners have zero influence on how Vanguard is run by it's management. In what way is it any more than the zero for clients at Fido? I think the management at both places may or may not have the best interests of clients in mind on any given issue.

Anyway, I'm very happy Vanguard still seems to be cruising along on the low cost path set by Jack. Just have my doubts than it is anything but momentum keeping the ship on course.
JW
Retired at Last
SGM
Posts: 3100
Joined: Wed Mar 23, 2011 4:46 am

Re: Fidelity vs Vanguard

Post by SGM »

I actually think this website may have some influence over Vanguard. BHs may have been thought of as a thorn in the side of Vanguard, but are now considered more of an asset.

Fidelity has not cold called me in a few years. I think if I used their retirement calculator or somehow revealed that most of my assets are elsewhere they would start that baloney again. They called trying to interest me in a guaranteed product that would generate commissions. If I wanted that kind of "help" I could just drive up to the local bank or accountant and ask for investment advice.
"Let us endeavor, so to live, that when we die, even the undertaker will be sorry." Mark Twain
TheGreyingDuke
Posts: 1822
Joined: Fri Sep 02, 2011 10:34 am

Re: Fidelity vs Vanguard

Post by TheGreyingDuke »

I have some small $$ at Fido, mostly to earn the frequent flyer miles that fund my retirement travel. Only buy el cheapo Spartan funds so it is a wash in that regard.

BUT, I do find that when I read any of the advice or research given at FIDO I need to keep in mind from whom the advice is coming, sometimes it seems a bit of a sales pitch. If you can ignore that noise, I would say do what is easiest (I have a long family tradition at VG going back decades.)
"Every time I see an adult on a bicycle, I no longer despair for the future of the human race." H.G. Wells
mflood
Posts: 1
Joined: Wed Dec 04, 2013 10:11 am

Investment help needed

Post by mflood »

I am in my 60's and on social security, but still working. I don't have a lot of savings. Any suggestions for building my portfolio. I only have about $40,000 to invest.
jlawrence01
Posts: 1683
Joined: Mon Feb 25, 2013 1:34 am
Location: Southern AZ

Re: Fidelity vs Vanguard

Post by jlawrence01 »

I have been a long term Vanguard customer and have been happy with their service.

I had my 401k in Fidelity until I retired. When I retired, I decided to rollover my 401k assets into my account at E*Trade to invest in ETFs. When I called to start the transfer, my call was transferred to a retention specialist who kept me on the phone for nearly 40 minutes. His sales pitch reminded me very much of a time share salesman. First, he attacked the "higher transactions costs" of E*Trade which just was not true as I have different pricing. After several other disses of E*Trade, he stated that if I transferred the funds out of Fidelity,my money would be "out of the market" for 10 days. I reminded him that we had a 20 day "black out" period when our plan moved from Vanguard to Fidelity due to issues at Fidelity. Finally, I ended the call.

My funds were received by E*Trade in three days.
JW-Retired
Posts: 7188
Joined: Sun Dec 16, 2007 12:25 pm

Re: Fidelity vs Vanguard

Post by JW-Retired »

jlawrence01 wrote:
I had my 401k in Fidelity until I retired. When I retired, I decided to rollover my 401k assets into my account at E*Trade to invest in ETFs. When I called to start the transfer, my call was transferred to a retention specialist who kept me on the phone for nearly 40 minutes. His sales pitch reminded me very much of a time share salesman. First, he attacked the "higher transactions costs" of E*Trade which just was not true as I have different pricing. After several other disses of E*Trade, he stated that if I transferred the funds out of Fidelity,my money would be "out of the market" for 10 days. I reminded him that we had a 20 day "black out" period when our plan moved from Vanguard to Fidelity due to issues at Fidelity. Finally, I ended the call.

My funds were received by E*Trade in three days.
That is an eye-opener. I have been with Fidelity for decades and have never been called by them for any reason. We even transferred DW's 401k rollover IRA from Fidelity to Vanguard without a peep from Fido.
JW
Retired at Last
jlawrence01
Posts: 1683
Joined: Mon Feb 25, 2013 1:34 am
Location: Southern AZ

Re: Fidelity vs Vanguard

Post by jlawrence01 »

JW Nearly Retired wrote:
jlawrence01 wrote:
I had my 401k in Fidelity until I retired. When I retired, I decided to rollover my 401k assets into my account at E*Trade to invest in ETFs. When I called to start the transfer, my call was transferred to a retention specialist who kept me on the phone for nearly 40 minutes. His sales pitch reminded me very much of a time share salesman. First, he attacked the "higher transactions costs" of E*Trade which just was not true as I have different pricing. After several other disses of E*Trade, he stated that if I transferred the funds out of Fidelity,my money would be "out of the market" for 10 days. I reminded him that we had a 20 day "black out" period when our plan moved from Vanguard to Fidelity due to issues at Fidelity. Finally, I ended the call.

My funds were received by E*Trade in three days.
That is an eye-opener. I have been with Fidelity for decades and have never been called by them for any reason. We even transferred DW's 401k rollover IRA from Fidelity to Vanguard without a peep from Fido.
JW

Note that I called Fidelity and they transferred me to a specialist. They did not call me. A minute into the call, I put my phone on speaker so my DW could listen in. The call shocked her also.
User avatar
jwillis77373
Posts: 395
Joined: Mon Jun 25, 2007 9:52 pm
Location: Texas

Re: Fidelity vs Vanguard

Post by jwillis77373 »

You think it is worth it for me to open up a Vanguard account?
My opinion is yes.

Because of my experience "after" leaving a job or switching jobs, it gives you a safer (more in your control place) to roll your funds into an account that is totally under your control. For example, I had a 401k with a company and left that job for another, I left the 401k with Fidelity. One day I logged in to check on things and all the Funds had changed name to this MegaCorp Fund Growth, MegaCorp Fund Extended Market, MegaCorp Fund International, MegaCorp Fund Bond, ect...

The 401k plan had changed to use Funds customized for the company I used to work for.. and I had no choice in the matter..that made me kind of angry. The pre-switch documentation to me was late and changing everything was done without so much as a confirmation on my part.

It was just "done".

Later I saw "extra administrative fees" for the privilege of holding these MegaCorp Funds and was charged a "Service Fee" for Rolling it over to Vanguard and a "Check Origination Fee" for doing the transfer. That Made me mad.

At each step I did not know my choices, options or understand the procedure. People might have explained it too me "if" I knew what to ask or say.. lacking experience.. I just participated as much as I could, reading everything online that I could.

The online information was disorganized and "tailored" for someone who already knew what they were doing. There was a "presumed familiar bias in the information". That could be a lesson in "never leave a 401k behind" or "be prepared, educate yourself or you'll learn things the hard way" but I think Fidelity could have made it easier.. but its not in their best interests in assisting you with a Rollover to another Custodian.. and typically an inexperienced customer will try to use the provider they are already using rather than another Custodian to "Pull" the account.. unless your asking a Bank Robber to "help you out" it just doesn't seem "natural".

I've been a Fidelity customer for about 10 years. I've had multiple 401ks through there as well.
Yeah, my experience is the same.

Most Employers or Companies seem to go with a Broker or a Mutual Fund Company that has Full service offerings.. sometimes services even Vanguard doesn't offer.. So my experience is most people will interact with Fidelity or some company like them sooner or later. The real difference between Vanguard or Fidelity.. is "choosing" to open a separate account and managing it yourself, so you don't feel at the mercy of the only investment company you "know".

So basically I'm sort of starting over here and don't have a ton of money to invest at the outset. My 401k is at Fidelity thru work, and I'm going to open up an IRA.
That's kind of how I started and "split" things up.

401k at work (with Fidelity) and personal IRA at Vanguard (wherever you open an IRA they are going to charge you a management fee, might as well be with Vanguard if your not already there). Then after you move on (everyone moves on these days) perform a Rollover from 401k to an IRA.

In fact because I got a choice between Traditional 401k and Roth 401k half way through employment.. when I rolled it over from Fidelity the "co-mingled" monies had to be sorted out and sent to a Traditional IRA and a Roth IRA.. fear of that was what delayed me learning how to do a Rollover in the first place.. its just not documented that's what will happen by Fidelity or Vanguard.. come on guys.. this stuff is just not "Obvious" to new customers!

My question is given my limited funds do you think Vanguard is appreciably better such that I should spend the time to open up a new account there and restart there?
Starting "multiple" IRA accounts (other than one for Traditional IRA and one for Roth IRA) just doesn't make sense, you end up paying more Administrative fees for each additional account.. I learned this the hard way.. but you can surely leave your 401k for work at Fidelity (you have little choice) and start a small Vanguard IRA account (Traditional IRA or Roth IRA) as a learner or starter account.

Every year you can contribute to 401k or IRA (do both) and see how it works. If you really have a job secure enough to never ever move on, sure you can combine the two, and maybe the exercise was only a "Confidence" builder. But you paid only one small IRA Administrative fee.. for however long the experiment lasted, in the overall scheme of things not a great loss.


Now as a "seasoned" Vanguard customer, I've tried their Automatic Checking account deduction for funding my yearly Vanguard IRA a little bit each pay period, and I've funded my Fidelity 401k at least to the Employer match with payroll deductions. Vanguard is also just as easy for creating a Taxable account and automatic checking account deductions (sort of like a savings account) and will then deposit the money if needed back into my Checking account. I don't really feel "safe" in trusting Fidelity who serves my Employers interests "First" with my direct Checking Account transfer information.. maybe I would if I had a "Personal" Fidelity account.. but that's just me.

And now that I kind of understand the implications of the Bush Tax cut in 2001, I'm looking at opening a Fidelity 457b to save even more.

Fidelity isn't "Evil" its quite nice, but your not really its primary customer when they manage your 401k. I suppose if you opened a separate Fidelity account they might cater more to servicing you "First" rather than the Employer that brings them lots of business, but you would be expected to "pay" out of pocket for that extra attention, and it might be higher than Vanguard.
mhalley
Posts: 8657
Joined: Tue Nov 20, 2007 6:02 am

Re: Fidelity vs Vanguard

Post by mhalley »

Mflood,
You will probably get a better response to your question if you follow the suggestions in this link.

http://www.bogleheads.org/forum/viewtop ... f=1&t=6212

Mike
tj
Posts: 3926
Joined: Thu Dec 24, 2009 12:10 am

Re: Fidelity vs Vanguard

Post by tj »

I find that Fidelity's 1099's are a lot easier to read.

In Vanguard, I like that I can have dividends automatically sent to a linked checking account...I don't remember that being possible with Fidelity, but maybe I just didn't know how to set it up.
bondsr4me
Posts: 1550
Joined: Fri Oct 18, 2013 7:08 am

Re: Fidelity vs Vanguard

Post by bondsr4me »

To the OP:

FWIW, I just transferred my investment account from Fidelity to Vanguard.
I have nothing bad to say about Fidelity, I just decided that it would be the best thing for me.
I am trying very hard (and it is extremely difficult) to get away from the "trading" mentality.
Fidelity gave a bunch of free trades, which makes it even harder to get away from the trading mentality.
Again, nothing bad to say about Fidelity, but lots of bad things to say about "TRADING" which are my fault.

Good luck with your choice whatever you decide to do.
Vanguard is a good choice.

Don
l2ridehd
Posts: 258
Joined: Sat Sep 10, 2011 5:18 am

Re: Fidelity vs Vanguard

Post by l2ridehd »

I maintain accounts at Vanguard, Fidelity, and Schwab. All three have pro's and con's. I like the Fidelity web site best, I like the Schwab cash card best, and I like Vanguard low cost structure best. I maintain 90% of my investments at Vanguard. Fidelity has the best customer service and tools. Schwab has the best trading capability and a zero fee any where in the world ATM card. In total Vanguard has the lowest cost. An interesting thing is I have Vanguard total stock market Admiral shares and Fidelity total stock market Spartan shares. Opened them with the same amount about 8 years ago. Vanguard has done better over that time. By a very small amount, less then 1/10 of a %. Probably because or ER. I was always going to go to morningstar and plot them to see what that showed, but never have. It could be as simple as timing of posted dividends or timing of deducting fees. Not sure, but over several years Vanguard did very slightly better.
User avatar
Boglenaut
Posts: 3090
Joined: Mon Mar 23, 2009 7:41 pm

Re: Fidelity vs Vanguard

Post by Boglenaut »

l2ridehd wrote: An interesting thing is I have Vanguard total stock market Admiral shares and Fidelity total stock market Spartan shares. Opened them with the same amount about 8 years ago. Vanguard has done better over that time. By a very small amount, less then 1/10 of a %. Probably because or ER. I was always going to go to morningstar and plot them to see what that showed, but never have. It could be as simple as timing of posted dividends or timing of deducting fees. Not sure, but over several years Vanguard did very slightly better.
They follow different indices.
Post Reply