Fidelity vs Vanguard

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UpperNwGuy
Posts: 2702
Joined: Sun Oct 08, 2017 7:16 pm

Re: Fidelity vs Vanguard

Post by UpperNwGuy » Sat Nov 09, 2019 2:00 am

I have accounts at both firms and am happy with both.

Northern Flicker
Posts: 4941
Joined: Fri Apr 10, 2015 12:29 am

Re: Fidelity vs Vanguard

Post by Northern Flicker » Sat Nov 09, 2019 2:18 am

Because there are expenses not accounted for in expense ratios, it is not easy to know which funds are actually cheaper. But if the assets are in a taxable account, there is no question that Vanguard stock index funds are more tax-efficient than Fidelity stock index funds.
Index fund investor since 1987.

fwellimort
Posts: 117
Joined: Tue Feb 12, 2019 9:41 am

Re: Fidelity vs Vanguard

Post by fwellimort » Sat Nov 09, 2019 3:29 am

Vanguard funds are "cheaper" on a taxable account unless you are opting for ETFs at Fidelity (you can buy Vanguard ETFs at Fidelity for no charge).

I will say "objectively" overall, Fidelity does win out in all aspects outside money market and bond market funds. Sure Vanguard is more tax efficient but it's not like you cannot purchase shares Vanguard/iShares for free at Fidelity so that discussion becomes quite moot.

But the difference is within a magnitude of <0.1%. Being out of the market even one day could be more devastating than the expenses themselves. Look at the gains just this week. Imagine you lost a day of this week.

Also, in a taxable account, don't forget, selling => paying taxes. The moment you sell in a taxable account for an equivalent fund, unless you are tax loss harvesting, you will be far more behind because now you will end up paying taxes twice on the same investment.

Vanguard and Fidelity are one of the top brokerages in the world (for retirement purposes). The difference is really negligible. A day in the market or the index the funds tracks are more deciding factors than the fees at this point.

If you are just transferring funds (no buying/selling) and Fidelity is giving a bonus to do so, sure why not? It's free money. But I believe Fidelity isn't known for bonuses unless one has significant assets as Fidelity already provides the best expense ratios in the market.
I have a feeling this transfer is more for the financial advisor in hopes to leach off you.

Anyways, as long as Vanguard exists, Fidelity will most likely be providing lower fees. Vanguard is the reason why Fidelity and Schwab has to lower fees to none (if not none). And as for tax efficiencies, once Vanguard's patent ends (around 2023), I wouldn't be surprised if Fidelity and Schwab jumps on to better advertise their own mutual funds.
For both Fidelity and Schwab, larger client base means more money to be earned from client's cash, credit cards, etc.
This is just capitalism doing its work to provide clients with the best possible deal. And with Fidelity/Schwab doing such, Vanguard too will have to keep adapting to survive in this environment. :sharebeer

pyld76
Posts: 272
Joined: Thu Feb 09, 2012 4:15 pm

Re: Fidelity vs Vanguard

Post by pyld76 » Sat Nov 09, 2019 2:00 pm

I’ve have both. Everything save my money market holdings is now with fidelity.

A short analysis would go like this:

1. If you absolutely must hold mutual funds (traditional) in a taxable account, prefer Vanguard. Their mutual funds benefit from the heartbeat trades of their ETF share classes in such a way that fidelity cannot match and are thus more tax efficient. If you don’t mind purchasing ETFs in your taxable account, prefer fidelity.

2. If you want the best rates on money market funds, prefer vanguard. However, as has been mentioned, if you want you can buy and auto-roll t-bills at Fido, which gets you pretty close in yield to what VG offers.

In literally every other respect, prefer Fidelity.

I’d just squeaked into Flagship country with VG. That customer service was on par (good day) with what I get as a Fido nobody. On a bad day, Fido wins in a landslide.

VG Luis left without a lot of the historical advantages it held when the cost differences were bigger. Now that everyone has cheap index products and they have to win on the basis of customer service, they are really in a bad way as a custodian

StandingRock
Posts: 344
Joined: Sat Feb 02, 2019 6:54 pm

Re: Fidelity vs Vanguard

Post by StandingRock » Sat Nov 09, 2019 2:36 pm

I second the comments on customer service. And it's not just Fidelity vs Vanguard per se. It would not be hard for any company to have better customer service than Vanguard. To put it simply, it's bad.

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