Schwab Vs Fidelity Vs Vanguard

[JD101]

https://www.schwab.com/public/schwab/in ... funds_etfs

Vanguard is known for the lowest cost in the industry but it looks like Schwab may be beating them lately. Take a look at above link, Schwab has low investment requirement yet able to match or beat Vanguard by 0.01% or so. Am I missing something?

I recently left an employer which offered 401K through Schwab. My new employer 401K is through fidelity and it offers life strategy funds(retirement type of funds) with an ER of 0.08%. I also have an Vanguard IRA account .

Should I rollover 401K to Schwab IRA? I believe the combined ER of schwab 401k is 0.5%. Rollover IRA, I can get ER to 0.05%.

Should I rollover to Fidelity so I don't have to keep track of two accounts?

Or Roll over to Vanguard? Experts please help me solve the puzzle.

[whodidntante]

I would go with Merrill, TDA, Firstrade or any other place you like that will pay you a bonus. See the long running thread on brokerage transfer bonuses. You'll be able to buy low costs investments at any broker.

[Taylor Larimore]

whodidntante:

Thanks to Jack Bogle, Vanguard is the only mutual fund company owned by its shareholders. There is no conflict of interest or profits going to stockholders.

All our securities have been with Vanguard since 1986. As a result we live in a nice home that Jack built!

You can do the same.

Best wishes.
Taylor

[MrPotatoHead]

You might want to note, if you roll a 401K plan into an IRA vs leaving it where it is or rolling it into your new employer's 401k plan you lose the superior creditor protection of the 401K plan. Most people consider access to a stable value fund essentially unique to retirement plans) as a major plus. You also lose the potential of future benefit of the 401K, in terms of future offerings. Many employers offer free financial planning services, free robo advisers etc as free ancillaries to their 401K plan members. If your plan does not have these features, they may in the future. Many 401K plans also offer access to very low cost annuity options that may prove valuable in the future. Once you roll our of the plan, you lose the ability to accesss what they may offer in the future.

In terms of where to park your assets I have accounts at all three, in fact I have had accounts at many companies and Vanguard remains unique in the sense it is the only financial company I ever totally regret ever opening an account with. I strongly value customer service and believe both Schwab and Fidelity to have excellent(1st tier) customer service (I give a slight edge to Schwab). Both have local offices and that may matter to you in the future. In stark contrast I consider Vanguard to have 4th tier customer service and it would have to rise precipitously to reach even mediocre status in my eyes. My comments are based on repeated interactions with all three firms spanning over a minimum of a decade with each. I will say I am very partial to Fidelity's level of service at the Private Client level. I also am very fond of the plethora of commission free etfs available from Fidelity.

Both Fidelity and Schwab offer bank like services that are exceptional.

Cheers...

[mpsz]

I recommend Fidelity and Schwab. Vanguard is "just fine" but I don't actively recommend them because I have run into IT and customer service issues here. Each broker has their issues, but most of my issues have been caused by Vanguard.

There is absolutely nothing wrong with Vanguard funds or ETFs. I just don't trust the brokerage.

[drk]

Vanguard is known for the lowest cost in the industry but it looks like Schwab may be beating them lately. Take a look at above link, Schwab has low investment requirement yet able to match or beat Vanguard by 0.01% or so. Am I missing something?

Maybe. The quoted expense ratio is not necessarily the net expense ratio. On several of its funds, Vanguard is able to pay a substantial portion of the expenses through securities lending. Moreover, if you look at ETFs and compare apples-to-apples, Vanguard's funds tend to have better liquidity than their Schwab peers.

[MrPotatoHead]

I recommend Fidelity and Schwab. Vanguard is "just fine" but I don't actively recommend them because I have run into IT and customer service issues here. Each broker has their issues, but most of my issues have been caused by Vanguard.

There is absolutely nothing wrong with Vanguard funds or ETFs. I just don't trust the brokerage.

Exactly!!!

[Nate79]

I highly recommend Schwab over Vanguard. Schwab puts its customer first with excellent customer service. That's the great thing about this extremely competitive field as Schwab has direct interest to provide a superior product and service.

[vtBob]

I highly recommend Schwab over Vanguard. Schwab puts its customer first with excellent customer service. That's the great thing about this extremely competitive field as Schwab has direct interest to provide a superior product and service.

Agreed. Schwab is nearly singularly unique in the level of customer service I have received over the Years for a very extremely competivey price product

[Tallis]

I would go with Merrill, TDA, Firstrade or any other place you like that will pay you a bonus. See the long running thread on brokerage transfer bonuses. You'll be able to buy low costs investments at any broker.

Or, if you wait, perhaps you can get a bonus with Fidelity or Schwab. We earned 50k American Airlines miles from the former, and $1000 from the latter for opening accounts with them.

For customer service, I give the nod to Schwab, but to be honest, we pretty much totally own Vanguard ETFs in our Schwab and Fidelity accounts.

[onourway]

If you are concerned about 0.01% of expense on a few funds I'd argue you are focused on the wrong thing. Schwab is a great brokerage - I have a portion of my holdings there and their checking account is my primary. However most of my long-term investments are with Vanguard because I trust the ownership structure of Vanguard much more, and Vanguard offers a much wider diversity of low cost funds than either Schwab or Fidelity.

[mak1277]

Inertia rules the day. I have money at Fidelity and Vanguard. With Vanguard, it takes me about 30 seconds to invest more money online, and I've yet to need to call customer service. I have no reason to switch. If I had initially invested at Schwab, I'm fairly certain I'd be making the same comment.

[RickBoglehead]

Keep in mind that expenses are just part of the equation.

I had accounts at Fidelity and Vanguard, with most assets at Vanguard. The only holding in my Fidelity accounts was Fidelity Total Bond Market Premium, FSITX. When I compared it a few years back to Vanguard's Total Bond Market Admiral, VBTLX, my assessment was they were the same. In fact, Fidelity charges 0.045% while Vanguard charges 0.05%, so Fidelity has "lower expenses".

Look at the 1, 3, 5 and 10 year numbers as of 3/31/18:

Fidelity - 1, 1.1, 1.71, 3.48
Vanguard - 1.11, 1.12, 1.73, 3.57

I have since moved all my Fidelity to Vanguard as a result of re-looking at things recently.

[RagnarRahl]

I have accounts with TD Ameritrade (formerly with Scottrade) Vanguard and Schwab. I prefer Schwab but I intend to keep all three. I will keep Vanguard because they have an ETF that I can't easily duplicate elsewhere. It is VEU and includes all international markets including emerging markets. I know that many people have had problems with Vanguard's customer service, but I haven't. And I trade so little that it is unlikely that I will.

I bank with Schwab and keep most of my non IRA funds there. I am keeping TD Ameritrade because I want to stay under $500,000 with any brokerage. I had no problems with the changeover from Scottrade. I know that all of them have additional insurance of accounts through Lloyd's of London, but I am more comfortable having all of my accounts insured by SIPC.

[arf30]

I've got taxable and IRAs at Vanguard, employer 401k and HSA at Fidelity, and checking and emergency fund at Schwab, but have been thinking about moving the checking and IRAs to Fidelity to consolidate a bit. The taxable will probably stay at Vanguard forever due to cost basis.
Fidelity and Schwab both have great customer service, Vanguard does not.

[David Jay]

I would roll over into the new 401K. There can be superior creditor protection (depending on state laws) and early retirement (age 55) possibilities with a 401K.

[euroswiss]

You might want to note, if you roll a 401K plan into an IRA vs leaving it where it is or rolling it into your new employer's 401k plan you lose the superior creditor protection of the 401K plan. Most people consider access to a stable value fund essentially unique to retirement plans) as a major plus. You also lose the potential of future benefit of the 401K, in terms of future offerings. Many employers offer free financial planning services, free robo advisers etc as free ancillaries to their 401K plan members. If your plan does not have these features, they may in the future. Many 401K plans also offer access to very low cost annuity options that may prove valuable in the future. Once you roll our of the plan, you lose the ability to accesss what they may offer in the future.

In terms of where to park your assets I have accounts at all three, in fact I have had accounts at many companies and Vanguard remains unique in the sense it is the only financial company I ever totally regret ever opening an account with. I strongly value customer service and believe both Schwab and Fidelity to have excellent(1st tier) customer service (I give a slight edge to Schwab). Both have local offices and that may matter to you in the future. In stark contrast I consider Vanguard to have 4th tier customer service and it would have to rise precipitously to reach even mediocre status in my eyes. My comments are based on repeated interactions with all three firms spanning over a minimum of a decade with each. I will say I am very partial to Fidelity's level of service at the Private Client level. I also am very fond of the plethora of commission free etfs available from Fidelity.

Both Fidelity and Schwab offer bank like services that are exceptional.

Cheers...

I completely agree with this - my experience with all three as well.

That said, as others point out, I would not roll any 401k over into IRA (yet). Too many advantages of 401k over IRA (including asset protection and 72t options)). I'd compare the two in terms of expense ratios and available investment options and, if similar, roll the old 401k into that of the new employer.

[echidna]

Keep in mind that expenses are just part of the equation.

Exactly. Splitting hairs over sub-tenths of a percent in expenses, while ignoring other factors that affect performance is silly. Funds invested in essentially the same thing (e.g., index funds) can differ in performance for many reasons other than quoted fund expenses. In the end, what you should compare is the bottom line: long-term fund performance, adjusted for taxes if appropriate. Just be careful to make apples-to-apples comparisons: exact same calendar time period, same tax calculations (see below), etc.

For instance (talking about tax effects, as most of my portfolio is taxable), Vanguard has a patented strategy (exclusive to them until the patent runs out) for improving the tax efficiency of their mutual funds paired with ETF's.

Plus the devil is in the details with taxable investments, as e.g. not all dividends are qualified, and different vendor's funds based on the same index can have significantly different fractions of the dividends as qualified. Also, very common way for a mutual fund to lose out in real, after-tax performance is through excessive trading that generates capital gains distributions.

(Note: I ran into trouble recently comparing after-tax performance of IVV (BlackRock S&P 500 ETF sold by Fidelity) with Vanguard''s VOO. IVV on Fidelity's site appeared to be significantly less tax-efficient. This turns out to be an error (IMHO) in how Fidelity's third-party data source is treating taxation on dividends. Fidelity are currently investigating this. BlackRock's own data shows tax efficiency that matches Vanguard.)

[ruralavalon]

https://www.schwab.com/public/schwab/in ... funds_etfs

Vanguard is known for the lowest cost in the industry but it looks like Schwab may be beating them lately. Take a look at above link, Schwab has low investment requirement yet able to match or beat Vanguard by 0.01% or so. Am I missing something?

I recently left an employer which offered 401K through Schwab. My new employer 401K is through fidelity and it offers life strategy funds(retirement type of funds) with an ER of 0.08%. I also have an Vanguard IRA account .

Should I rollover 401K to Schwab IRA? I believe the combined ER of schwab 401k is 0.5%. Rollover IRA, I can get ER to 0.05%.

Should I rollover to Fidelity so I don't have to keep track of two accounts?

Or Roll over to Vanguard? Experts please help me solve the puzzle.

I suggest rolling the old 401k over to an IRA at Fidelity or Vanguard, for the simplicity of having fewer accounts in fewer locations, and also because both Vanguard and Fidelity offer a wider selection of low expense index funds than does Schwab. My own personal preference is Vanguard, because they have by far the largest selection of low expense mutual funds offered anywhere.

The differences in index fund expense ratios between Schwab and Fidelity and Vanguard are tiny and inconsequential. Other differences (like the index used, turnover rate, tracking error, securities lending) will be more important than an expense ratio difference of one hundredth of a percent or a few thousandths of a percent.

If the 401k plan at your new employer will accept a rollover from your old plan, and offers good funds with low expense ratios, then a rollover into the new 401k is another choice to consider.

[bondsr4me]

I have accounts at all three plus TDA (for now anyway).

IMHO they are all good for "investors".
Only Schwab and Fidelity are good for "traders".

I think for long-term "investors" you can't go wrong with any of these.

Regarding "ownership", we as VG fund owners may "own" VG, but VG does not share any financial/operational information
with us "owners". This is kinda annoying.

At least with Schwab, being a publicly owned company, we as shareholders are entitled to financial/operational info and can go to
shareholder meetings....not so with Vanguard or Fidelity.

Choose one, choose two, choose all three....you can't go wrong.

Don

[Nate79]

I have accounts at all three plus TDA (for now anyway).

IMHO they are all good for "investors".
Only Schwab and Fidelity are good for "traders".

I think for long-term "investors" you can't go wrong with any of these.

Regarding "ownership", we as VG fund owners may "own" VG, but VG does not share any financial/operational information
with us "owners". This is kinda annoying.

At least with Schwab, being a publicly owned company, we as shareholders are entitled to financial/operational info and can go to
shareholder meetings....not so with Vanguard or Fidelity.

Choose one, choose two, choose all three....you can't go wrong.

Don

In fact I hold Schwab to a higher level than Vanguard because they are a public company. That Vanguard has our interest at heart because as VG fund owners we own the company is a load of bull that gets spread around like manure on the field. The Kool-aid drinkers can say what they want but a company that treats their customers like VG does doesn't have their owners interest in mind.

[mptfan]

Both Fidelity and Schwab offer bank like services that are exceptional.

Schwab does more than offer bank like services, it offers services of an actual bank, i.e. Schwab Bank.

[echidna]

whodidntante:

Thanks to Jack Bogle, Vanguard is the only mutual fund company owned by its shareholders. There is no conflict of interest or profits going to stockholders.

It's an interesting question to speculate on why then then Vanguard's customer service is on average distinctly inferior to that of Schwab and Fidelity (as the consensus seems to be, and as my admittedly limited experience has borne out).

Perhaps Vanguard's ownership structure provides less incentive to employees to keep customers happy?

[echidna]

Vanguard is known for the lowest cost in the industry but it looks like Schwab may be beating them lately. Take a look at above link, Schwab has low investment requirement yet able to match or beat Vanguard by 0.01% or so. Am I missing something?

Maybe. The quoted expense ratio is not necessarily the net expense ratio. On several of its funds, Vanguard is able to pay a substantial portion of the expenses through securities lending.

My understanding is that income from securities lending results in non-qualified dividend distributions, which could reduce the tax-efficiency of a fund. Is that so even when the loan income offsets expenses?

[SmileyFace]

Schwab and Fidelity have been slightly lower on competing Index Funds for a while.
But, the difference is mostly in the noise.
A 0.01% difference on even a $1Million dollar fund is only $100 yearly.
Plus, given the ER had been a race-to-the-bottom for these competitors - you might move everything only to have the competitor you just left drop again next year.

[Nate79]

Keep in mind that expenses are just part of the equation.

I had accounts at Fidelity and Vanguard, with most assets at Vanguard. The only holding in my Fidelity accounts was Fidelity Total Bond Market Premium, FSITX. When I compared it a few years back to Vanguard's Total Bond Market Admiral, VBTLX, my assessment was they were the same. In fact, Fidelity charges 0.045% while Vanguard charges 0.05%, so Fidelity has "lower expenses".

Look at the 1, 3, 5 and 10 year numbers as of 3/31/18:

Fidelity - 1, 1.1, 1.71, 3.48
Vanguard - 1.11, 1.12, 1.73, 3.57

I have since moved all my Fidelity to Vanguard as a result of re-looking at things recently.

While certainly expenses are part of the equation (and expenses vs time and their effect on performance) the funds you are comparing are not exactly the same in terms of credit risk and duration. The slightly higher performance of the Vanguard fund comes at a slightly longer average duration and slightly lower credit rating bonds vs the Fidelity fund (at least according to M*). But that is the makeup today, who knows about in the past.

[Taylor Larimore]

whodidntante:

Thanks to Jack Bogle, Vanguard is the only mutual fund company owned by its shareholders. There is no conflict of interest or profits going to stockholders.

It's an interesting question to speculate on why then then Vanguard's customer service is on average distinctly inferior to that of Schwab and Fidelity (as the consensus seems to be, and as my admittedly limited experience has borne out).

Perhaps Vanguard's ownership structure provides less incentive to employees to keep customers happy?

echidna:

Company oriented websites attracts dissenters. It is better to learn what most investors say:

The September 2016 issue of Consumer Reports rated traditional investment companies on the services they provide:

"A total of 118,662 rating from small investors and 45,447 from large investors.-- Rating were based on: Investment Returns, Met Goals, Customer Service, Advice and Online Reports. Vanguard's overall company rating was #1 for both small investors (67 companies rated), and large investors (31 companies rated)."

I have no doubt the flood of new Vanguard investors has hurt Vanguard services (although every Vanguard investor I know has been unaffected). I recently read that Vanguard has hired thousands of new employees which will eventually come up to speed.

As I Replied above, Vanguard is the only mutual fund company owned by its shareholders. This is a major advantage which is almost certain to benefit Vanguard investors in the long run.

Best wishes.
Taylor

[mouses]

I agree that Vanguard has abysmal customer service compared to Schwab, not the least of which is not being available 24/7, but one thing I do like about Vanguard is the easy readability of their website.

As I get older and as website designers apparently have twenty to thirty year old eyesight, I find redesigned websites almost always have readability issues that really suck; small, pale, thin type, low contrast designs that don't scale well so even magnifying doesn't help much. Vanguard at least has not (yet) messed up their website.

Let's hear it for Chrome's high contrast option, however.

[echidna]

whodidntante:

Thanks to Jack Bogle, Vanguard is the only mutual fund company owned by its shareholders. There is no conflict of interest or profits going to stockholders.

It's an interesting question to speculate on why then then Vanguard's customer service is on average distinctly inferior to that of Schwab and Fidelity (as the consensus seems to be, and as my admittedly limited experience has borne out).

Perhaps Vanguard's ownership structure provides less incentive to employees to keep customers happy?

echidna:

Company oriented websites attracts dissenters. It is better to learn what most investors say:

The September 2016 issue of Consumer Reports rated traditional investment companies on the services they provide:

"A total of 118,662 rating from small investors and 45,447 from large investors.-- Rating were based on: Investment Returns, Met Goals, Customer Service, Advice and Online Reports. Vanguard's overall company rating was #1 for both small investors (67 companies rated), and large investors (31 companies rated)."

I have no doubt the flood of new Vanguard investors has hurt Vanguard services (although every Vanguard investor I know has been unaffected). I recently read that Vanguard has hired thousands of new employees which will eventually come up to speed.

As I Replied above, Vanguard is the only mutual fund company owned by its shareholders. This is a major advantage which is almost certain to benefit Vanguard investors in the long run.

Best wishes.
Taylor

That is evidently a composite rating, which, as you quoted it, doesn't break out customer service as a line item. I don't think anyone posting here takes issue with Vanguard as providing good products, but there has been widespread, often vocal and persistent criticism of their customer service. Not necessarily that it is bad but certainly that it suffers in comparison with Schwab and Fidelity. The reason the bulk of my investment portfolio is now with Fidelity due to issues I had recently with account setup at Vanguard, and more significantly, their comparatively lackadaisical response to my complaints. I wanted to use Vanguard (and still will, to a more limited extent), it was my initial first choice after reading one of Jack Bogle's books and doing some other research, but they let me down.

[ruralavalon]

I feel a little nostalgia, since we no longer have the capacity for polls.

My own sense is that most here find Vanguard customer service to be good.

[JD101]

Guys,

Thanks for all the great information. I have learnt that all 3 are good and difference in ER is trivial. A lot of the people here are financial savvy and already have done research on what funds to pick. A lot of us would do an asset allocation using low cost index and or ETFs. If that is the case, why do we need a great customer service? A lot of us are also long term investors. We are strictly talking about retirement accounts here. Schwab and fidelity may be good today but things can change tomorrow. Vanguard is owned by investors so they may remain low cost for long time.

I just called Fidelity and asked them about whether my new employer plan allows 401k rollover, the answer is YES, that means I can still keep asset protection and other benefits of of 401k that some of you have mentioned and reduce my ER from 0.5% to 0.1%. In this case, it would no brainier to not consolidate the accounts. Am I missing anything here? Please advise.

[MrPotatoHead]

A lot of us would do an asset allocation using low cost index and or ETFs. If that is the case, why do we need a great customer service?

[limeyx]

I highly recommend Schwab over Vanguard. Schwab puts its customer first with excellent customer service. That's the great thing about this extremely competitive field as Schwab has direct interest to provide a superior product and service.

Agreed. Schwab is nearly singularly unique in the level of customer service I have received over the Years for a very extremely competivey price product

Yup, I settled on Vanguard for tax deferred and Schwab for taxable (all vanguard ETFs) and am super happy
Schwab's service is simply awesome and one of the main reasons I stay

[msi]

whodidntante:

Thanks to Jack Bogle, Vanguard is the only mutual fund company owned by its shareholders. There is no conflict of interest or profits going to stockholders.

It's an interesting question to speculate on why then then Vanguard's customer service is on average distinctly inferior to that of Schwab and Fidelity (as the consensus seems to be, and as my admittedly limited experience has borne out).

Perhaps Vanguard's ownership structure provides less incentive to employees to keep customers happy?

echidna:

Company oriented websites attracts dissenters. It is better to learn what most investors say:

The September 2016 issue of Consumer Reports rated traditional investment companies on the services they provide:

"A total of 118,662 rating from small investors and 45,447 from large investors.-- Rating were based on: Investment Returns, Met Goals, Customer Service, Advice and Online Reports. Vanguard's overall company rating was #1 for both small investors (67 companies rated), and large investors (31 companies rated)."

I have no doubt the flood of new Vanguard investors has hurt Vanguard services (although every Vanguard investor I know has been unaffected). I recently read that Vanguard has hired thousands of new employees which will eventually come up to speed.

As I Replied above, Vanguard is the only mutual fund company owned by its shareholders. This is a major advantage which is almost certain to benefit Vanguard investors in the long run.

Best wishes.
Taylor

That is evidently a composite rating, which, as you quoted it, doesn't break out customer service as a line item. I don't think anyone posting here takes issue with Vanguard as providing good products, but there has been widespread, often vocal and persistent criticism of their customer service. Not necessarily that it is bad but certainly that it suffers in comparison with Schwab and Fidelity. The reason the bulk of my investment portfolio is now with Fidelity due to issues I had recently with account setup at Vanguard, and more significantly, their comparatively lackadaisical response to my complaints. I wanted to use Vanguard (and still will, to a more limited extent), it was my initial first choice after reading one of Jack Bogle's books and doing some other research, but they let me down.

Believe it or not, they actually did give Vanguard a high rating for customer service, along with Fidelity and Schwab.

[lazyday]

Perhaps Vanguard's ownership structure provides less incentive to employees to keep customers happy?

Fidelity and Schwab make a lot of money from customers who choose high cost products. This high profit provides both a strong incentive to keep customers happy, and the funds to do so.

Of course Fidelity and Schwab also have strong incentive to make money from their customers. This is much less of a concern with Vanguard, as Taylor posts above.

If you're careful, you can freeload at Fido or Schwab, paying low costs for great service. Just don't die or suffer cognitive decline, and your assets will be fine.

Not that I expect Fido or Schwab to do everything they can to take your money from you. They seem to have reputations for some restraint. But it seems much safer to trust Vanguard.

[abuss368]

Vanguard has experienced an explosion in assets. I have no doubt that they will hire the crew members needed to continue the mission.

Thank you Jack Bogle!

[PFInterest]

https://www.schwab.com/public/schwab/in ... funds_etfs

Vanguard is known for the lowest cost in the industry but it looks like Schwab may be beating them lately. Take a look at above link, Schwab has low investment requirement yet able to match or beat Vanguard by 0.01% or so. Am I missing something?

I recently left an employer which offered 401K through Schwab. My new employer 401K is through fidelity and it offers life strategy funds(retirement type of funds) with an ER of 0.08%. I also have an Vanguard IRA account .

Should I rollover 401K to Schwab IRA? I believe the combined ER of schwab 401k is 0.5%. Rollover IRA, I can get ER to 0.05%.

Should I rollover to Fidelity so I don't have to keep track of two accounts?

Or Roll over to Vanguard? Experts please help me solve the puzzle.

backdoor rIRA.

[JD101]

Folks,

I need your help in figuring out this specific question:

The new employer allows me to rollover old 401K which is with schwab to 401K with Fidelity. If I leave the money in Schwab 401K the combined ER of large cap, mid cap, small cap, international cap is about 0.5%. With Fidelity I can get that down to 0.09%. So it would make sense to rollover into Fidelity IRA and still get the asset protection benefit of 401K. What do you guys think?

[ruralavalon]

Folks,

I need your help in figuring out this specific question:

The new employer allows me to rollover old 401K which is with schwab to 401K with Fidelity. If I leave the money in Schwab 401K the combined ER of large cap, mid cap, small cap, international cap is about 0.5%. With Fidelity I can get that down to 0.09%. So it would make sense to rollover into Fidelity IRA and still get the asset protection benefit of 401K. What do you guys think?

I think that a rollover of the old 401k into the new 401k is a good idea.

That is a significant improvement in expense ratios.

[AAA]

I've been comparing these three brokerages recently as I'm considering not putting all my eggs in one Vanguard basket. (Brokerage diversity is the subject of many Bogleheads threads so please let's not get into that here). What I notice is that, yes, they all have low cost stock index funds with very similar expense ratios, but in other areas such as bond funds, money market funds and CD offerings, Vanguard is usually the best overall. For a significant amount of money in such vehicles, it could amount to a few hundred dollars a year in lost income due to higher expenses. So I'm wondering why a lot of people here vote for Schwab or Fidelity, unless they are almost exclusively using stock index funds, they like the customer service and think that's worth it or they are doing so for purposes of brokerage diversity.

[Dottie57]

I recommend Fidelity and Schwab. Vanguard is "just fine" but I don't actively recommend them because I have run into IT and customer service issues here. Each broker has their issues, but most of my issues have been caused by Vanguard.

There is absolutely nothing wrong with Vanguard funds or ETFs. I just don't trust the brokerage.

Exactly!!!

Same here. I’ve gone with Fidelity because my 401k is there and I like the web site very much.

[SmileyFace]

I've got a taxable account, a rollover IRA account, and an active 401k account.
One is with Vanguard, one with Fidelity, and one with Schwab. I personally don't see much difference - similar ERs, similar website experiences, etc.
I have rarely had to use customer service for anything si can't speak much to customer service.
Personally - I like keeping the 3 things in 3 separate places - I never get confused over which statement is which tax treatment, etc. With simple index portfolios it isn't too much to manage.

[Nightowl99]

I guess everyone's experience is different because I like Vanguard the best so far. I haven't compared expense ratios of funds lately, but back when I did, several years ago, Vanguard's were the lowest. My experience with Schwab was limited to the time I visited an advisor there: she recommended that I put all of my dad's portfolio into bonds (100% bonds). It didn't seem like good advice, so I transferred it all to Fidelity. Their advisor was very nice and helped diversify my dad's portfolio, which was previously 100% Chevron stock. That was helpful, but he recommended investing part of it in an annuity, which I later learned was not such good advice because of the fees and the tax situation. Having been through all that and reading a little, I finally ended up transferring all my investments to Vanguard and have been happiest with them so far. I haven't had any customer service issues with them, and find them to be unfailingly helpful and polite, but time will tell if there's ever any reason to go back to one of the others.

[NYCwriter]

I've been with Vanguard almost as long as I was with TD. I moved my individual equities and an etf from TD to Fidelity when I got offered a hefty bonus plus 2 years free commissions. It was a no-brainer, because TD cs had dropped a bit in quality n their pursuit of traders. My core portfolio remains with Vanguard. It's just easier that way. Transactions for VG funds are free and the website is easy to use in spite of the quirks.

VG CS was good up until a couple of years ago. I was actually told by a rep that VG's message system wasn't working properly and was therefore unreliable. (If that doesn't work properly, what else doesn't work?)

Fidelity CS has been great from the get-go. Easy live chat with a knowledgeable person, and any issue quickly resolved even if it requires a transfer to a different unit.

I'm mindful that VG is different, and even with increasing competition their ers are ideal, so I give them a bit of leeway.

Fidelity is pretty good with its site, with research materials, for those who own individual equities or etfs, or want to research CDs, etc.

I will never use Schwab. They handled one of my father's portfolios. He had early Alzheimer's and with our attention diverted to his care, everything was left to the advisor du jour. We discovered later that it had all been chopped up into pieces in high expense funds and then during the recession (coinciding with my father's death) there was a need to pay a hefty amount into it. It's my dad's fault for not cleaning up affairs when he first got his diagnosis. Based on what I've read on this site, Fidelity has done similar things in an advisory capacity, so I think it's a caveat for any portfolio.

It's worth noting that every so often I receive an email about Vanguard's Voyager or Advisor services, and when I try to go through their questionnaire, I invariably hit a "page not found" error that boots me out of the process. No advisor services for me, I guess!

[lazyday]

yes, they all have low cost stock index funds with very similar expense ratios, but in other areas such as bond funds, money market funds and CD offerings, Vanguard is usually the best overall. For a significant amount of money in such vehicles, it could amount to a few hundred dollars a year in lost income due to higher expenses.

I don't own corporate bonds. Schwab and Fidelity both have Treasury funds with pretty low ER, and you can purchase Treasuries at auction with no cost. You can also buy and sell on the secondary market with no added cost over the spread.

Is Vanguard superior for CDs? I haven't tried to compare.

Vanguard does have significantly better money market funds. At Fidelity and especially at Schwab, you can't avoid the lower yield in the sweep account, but for long term holdings, you can use either short term Treasury funds, or T Bills.

For corporate bonds, you could use a Vanguard ETF and just pay the $5 commission per trade.

[finagle]

You might want to note, if you roll a 401K plan into an IRA vs leaving it where it is or rolling it into your new employer's 401k plan you lose the superior creditor protection of the 401K plan. Most people consider access to a stable value fund essentially unique to retirement plans) as a major plus. You also lose the potential of future benefit of the 401K, in terms of future offerings. Many employers offer free financial planning services, free robo advisers etc as free ancillaries to their 401K plan members. If your plan does not have these features, they may in the future. Many 401K plans also offer access to very low cost annuity options that may prove valuable in the future. Once you roll our of the plan, you lose the ability to accesss what they may offer in the future.

In terms of where to park your assets I have accounts at all three, in fact I have had accounts at many companies and Vanguard remains unique in the sense it is the only financial company I ever totally regret ever opening an account with. I strongly value customer service and believe both Schwab and Fidelity to have excellent(1st tier) customer service (I give a slight edge to Schwab). Both have local offices and that may matter to you in the future. In stark contrast I consider Vanguard to have 4th tier customer service and it would have to rise precipitously to reach even mediocre status in my eyes. My comments are based on repeated interactions with all three firms spanning over a minimum of a decade with each. I will say I am very partial to Fidelity's level of service at the Private Client level. I also am very fond of the plethora of commission free etfs available from Fidelity.

Both Fidelity and Schwab offer bank like services that are exceptional.

Cheers...

Good point but one needs to keep an eye out on the 401k one's ex-employer(s) is with. If the ex-employer moves from Vanguard/Fido/Schwab to Wells Fargo/Merrill/Ed Jones/Dewey Cheatum, I'm rolling over to a Roth IRA. Could happen if your ex-office gets divested and they loose the Vanguard ultra-low-cost umbrella 401k plan.

[finagle]

I recommend Fidelity and Schwab. Vanguard is "just fine" but I don't actively recommend them because I have run into IT and customer service issues here. Each broker has their issues, but most of my issues have been caused by Vanguard.

There is absolutely nothing wrong with Vanguard funds or ETFs. I just don't trust the brokerage.

Exactly!!!

Same here. I’ve gone with Fidelity because my 401k is there and I like the web site very much.

What's your Fido index fund for Total International Stock? I'm in fsivx but I don't believe it's as comprehensive as Vanguard's Total International Stock in the 3-fund portfolio. Makes me want to rollover my taxable to Vanguard.

[StormShadow]

Not that I expect Fido or Schwab to do everything they can to take your money from you. They seem to have reputations for some restraint. But it seems much safer to trust Vanguard.

+1 Vanguard has a great track record.

I'm sure you can save a few more cents going elsewhere, but I place value with the peace of mind I get using Vanguard.

[Dottie57]

I recommend Fidelity and Schwab. Vanguard is "just fine" but I don't actively recommend them because I have run into IT and customer service issues here. Each broker has their issues, but most of my issues have been caused by Vanguard.

There is absolutely nothing wrong with Vanguard funds or ETFs. I just don't trust the brokerage.

Exactly!!!

Same here. I’ve gone with Fidelity because my 401k is there and I like the web site very much.

What's your Fido index fund for Total International Stock? I'm in fsivx but I don't believe it's as comprehensive as Vanguard's Total International Stock in the 3-fund portfolio. Makes me want to rollover my taxable to Vanguard.

I believe it is FTIPX. It is rather new to Fidelity. It has emerging markets and small cap which is closer to Vanguard.
I believe FSIVX is large cap international.

[troubleshooter]

I've got a taxable account, a rollover IRA account, and an active 401k account.
One is with Vanguard, one with Fidelity, and one with Schwab. I personally don't see much difference - similar ERs, similar website experiences, etc.
I have rarely had to use customer service for anything si can't speak much to customer service.
Personally - I like keeping the 3 things in 3 separate places - I never get confused over which statement is which tax treatment, etc. With simple index portfolios it isn't too much to manage.

DaftInvestor,
I am new here, and I am looking into investing with Vanguard index funds, but can you please answer an odd question for me?
Why would a person go thru Fidelity or Schwab to invest in a Vanguard index fund, when they can go directly to Vanguard
itself? Is it only due to the customer service issue I have read about? Or is there something so simple that I have not figured it out yet? Thank you.