Vanguard, Fidelty, or elsewhere for early investor

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Calhoon
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Vanguard, Fidelty, or elsewhere for early investor

Post by Calhoon »

If you were in your early 20s would you open a brokerage account at vanguard or fidelity or somewhere else?

Up until earlier this month I would have recommended that she start a vanguard account. She has enough to max out a roth for the year and she could park the rest (and any other money that started piling up in her checking account) in a vmfxx brokerage account to get a good return on savings.

But now that Vanguard is planning on charging a 100 account closure fee or transfer fee I'm starting to wonder if she would be better off elsewhere. I'm thinking that at that age finances are fairly dynamic where you wouldn't cash out the roth but I could see where you might need to tap into the vmfxx account for all kinds of reasons. I'm wondering if the vanguard platform would no onger be a good place for her.

Fidielity, on the other hand, doesn't charge a transfer fee or closure fee and it looks like you can get most of the same vanguard funds through fidelity but instead of investing in vtwax, for example, you would go with the VT etf to avoid fees. Though, on the other side, the fidelity equivallent to vmfxx (spaxx) has higher fees for a lower payout and it does feel a little like I'm getting roped into a time share seminar anytime I call there.

So where would you recommdend someone just starting out put there money? Would it still be vanguard?
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Raspberry-503
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by Raspberry-503 »

They're probably both fine but Vanguard with a number of recent actions (including additional fees) seems to be focusing away from being a full-service brokerage, so I would pick Fidelity by a hair (Schwab, Vanguard, Fidelity are the big 3 and just fine)
I have been very happy with Fidelity customer service when compared to Vanguard, shorter waits, better experience.

EDIT: you're right you can invest in all Vanguard ETFs for free a Fidelity, and have access to Fidelity's own funds if that's interesting to you/her (they have 0% ER funds, which might be attractive in tax-advantaged accounts)

The one advantage of Vanguard is VUSXX, you'd need to hold a lot of cash for the difference to be material. I hold enough that even though I do everything else at Fidelity, I do have n account at Vanguard where I only hold VUSXX, but I'm thinking about moving that to Fidelity, maybe with a "cash-like" ETF like SGOV.
almostretired1965
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by almostretired1965 »

I would just go with Fidelity or Schwab unless you really want to invest in Vanguard mutual funds for some reason. I actually have accounts at Fidelity, etrade, and Vanguard. Vanguard is the only one I actually chose on my own, nearly 30 years ago now. The others were due to employers. At one point I had planned to consolidate everything at Vanguard, but will no longer do so.
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my2p
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by my2p »

Tapping into the settlement fund (VMFXX) at Vanguard does not mean account closure/transfer. It should not incur the $100 fee.

Fidelity is a fine choice as well. As you are already aware, to avoid extra fees, buy Vanguard ETFs and not funds through Fidelity. SPAXX is returning about 4.96% compared to VMFXX's 5.26%. On $100K, it's about $300/year difference. For that reason alone, you can go with Vanguard :happy .

Side note: Rather than buying VT, you may be better off buying VTI and VXUS and setting the allocation yourself.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by rkhusky »

If you want to avoid the $100 closure fee, simply ask the new brokerage to reimburse you for it.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by welderwannabe »

I haven't done it yet, but Fidelity launched the ability to do automatic investments in ETFs now, using linked bank accounts, so you can put everything on autopilot. So you can easily buy Vanguard ETFs at fidelity now and treat them just like mutual funds at Vanguard, automatic investments and all.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by MrJedi »

I have accounts at both from when I started out 10+ years ago.
Vanguard is fine but it seems like they are divesting or heading backwards from their retail services in the time I've used them while Fidelity continues to add more features/services over the years. If I were starting over today with what I know I would just do Fidelity, but Vanguard is not bad enough for me to leave with what I already have there.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by jacksprat »

..
Early 20's ?

https://m1.com/

They'll likely enjoy the 'finance super app' , tech and automation over the staid options - VG, F & S.
.
J295
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by J295 »

Transfer fee irrelevant to me. Over four decades at Fidelity and also have accounts at Vanguard and Schwab. Fidelity is my recommendation by a landslide.
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ruralavalon
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by ruralavalon »

Calhoon wrote: Sun May 12, 2024 10:07 pm If you were in your early 20s would you open a brokerage account at vanguard or fidelity or somewhere else?

Up until earlier this month I would have recommended that she start a vanguard account. She has enough to max out a roth for the year and she could park the rest (and any other money that started piling up in her checking account) in a vmfxx brokerage account to get a good return on savings.

But now that Vanguard is planning on charging a 100 account closure fee or transfer fee I'm starting to wonder if she would be better off elsewhere. I'm thinking that at that age finances are fairly dynamic where you wouldn't cash out the roth but I could see where you might need to tap into the vmfxx account for all kinds of reasons. I'm wondering if the vanguard platform would no onger be a good place for her.

Fidielity, on the other hand, doesn't charge a transfer fee or closure fee and it looks like you can get most of the same vanguard funds through fidelity but instead of investing in vtwax, for example, you would go with the VT etf to avoid fees. Though, on the other side, the fidelity equivallent to vmfxx (spaxx) has higher fees for a lower payout and it does feel a little like I'm getting roped into a time share seminar anytime I call there.

So where would you recommdend someone just starting out put there money? Would it still be vanguard?
In my opinion Vanguard and Fidelity are both good choices. It's largely a matter of personal preference.

My personal preference is Vanguard because it has by far the largest menu of low cost funds to consider. Vanguard has the best money market funds.

In my opinion Vanguard is the best choice for the buy-and-hold, do-it-yourself investor.

Fidelity has local customer service offices in some cities, which might be important to some novice investors.
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rkhusky
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by rkhusky »

Since half of Fidelity funds have ER’s greater than 0.5%, a novice investor is better off at Vanguard, so as not to get put into an expensive active fund. Fidelity would be fine if they have someone to advise them on which funds to choose and to whom they would turn if a Fidelity salesman tries to sell them on something different.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by momopi »

Calhoon wrote: Sun May 12, 2024 10:07 pm If you were in your early 20s would you open a brokerage account at vanguard or fidelity or somewhere else?
For someone in their 20's, they'd like prefer Fidelity's web site over Vanguard's.

But you do need to shop for low cost funds/ETF's carefully to avoid the higher-fees ones.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by OldSport »

While I do like Fidelitys website better, one thing Vanguard has going for it is that it has by far the best money market fund returns bar none.

Fidelity charges 3-4x the money market ER fees as Vanguard, significantly eating into the return. $100 fee to close may be annoying if you only have $1000 and jump around, but if you have a large portfolio with no plans of closing that the $100 is trivial.

If they charge $100 every time money is transferred out, then that's a huge deal (maybe SEC or consumer violation), but if it's a one time total account closure, that's not so big.

If you're planning on parking any sizeable amount in a money marker, I'd go with Vanguard. Vanguard also has really good funds for Wellington and Wellesly if you want to use those, and also Vanguard has good bond funds. Otherwise if you're most going to buy and hold equity index ETFs, then Fidelity is great.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by retired@50 »

rkhusky wrote: Mon May 13, 2024 11:32 am Since half of Fidelity funds have ER’s greater than 0.5%, a novice investor is better off at Vanguard, so as not to get put into an expensive active fund. Fidelity would be fine if they have someone to advise them on which funds to choose and to whom they would turn if a Fidelity salesman tries to sell them on something different.
I agree with this ^^^. Fido is okay if you have a tour guide.

I advise my nieces and nephews to use Vanguard. It also helps when they have questions about the website or tax reporting because I've been with Vanguard a long time so I can typically help out.

Regards,
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PersonalFinanceJam
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by PersonalFinanceJam »

I'm assuming this person has somehow asked for your help in this regard. What financial relationships does this person already have? Do they have an opinion on what might be good or is important to them? From a low cost investing perspective the platform is practically irrelevant these days. If I'm back in my 20's I want someone to explain to me in basic terms the mechanics of all of this. In all likelihood this person will have many decades of saving and investing in front of them. Providers change fees and policies all the time. Some of these may not be to the liking of this person. They will most likely have to deal with an employer sponsored plan of some type in the future.

All of this is to say don't get too hung up on the place as a black and white, right or wrong choice. See if you can impart some wisdom to this person and help them make their own choices given what is important to them.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by bhj »

If I were early 20s, at this point, I would choose Fidelity or Schwab for a Roth IRA.

Vanguard ETFs can be purchased at either Fidelity or Schwab. Fidelity or Schwab index mutual funds can be purchased at the respective brokerage as well.

Regarding the money market funds, yes, Vanguard seems to have a higher yield consistently. However, the people at that age I know do not have enough cash to make a material difference at a 30-35 basis point difference in money market yields.

For those investing with any of the three, investing in index mutual funds or lower-cost ETFs should be done. The "no" response should be used anytime there is mention of assistance with picking funds or ETFs or advisory/management services.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by B88 »

My customer service experience with Vanguard was reliably horrible. I left them a couple years ago. Opened both Schwab and Fidelity accounts. I use mostly ETF's now. Schwab has reduced the ER to .03% on most of their ETFs. You can of course buy Vanguard ETFs at either firm without fees added on. If I had to pick one it is hard. Schwab customer service is maybe 5% better than Fidelity, but both are excellent. I might even suggest getting an account at each. If one or the other goes bad over the years you can move funds to the other. I expected I would find a preference for one or the other, but after a couple of years I still have money with both.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by mikeyzito22 »

ruralavalon wrote: Mon May 13, 2024 8:52 am
Calhoon wrote: Sun May 12, 2024 10:07 pm If you were in your early 20s would you open a brokerage account at vanguard or fidelity or somewhere else?

Up until earlier this month I would have recommended that she start a vanguard account. She has enough to max out a roth for the year and she could park the rest (and any other money that started piling up in her checking account) in a vmfxx brokerage account to get a good return on savings.

But now that Vanguard is planning on charging a 100 account closure fee or transfer fee I'm starting to wonder if she would be better off elsewhere. I'm thinking that at that age finances are fairly dynamic where you wouldn't cash out the roth but I could see where you might need to tap into the vmfxx account for all kinds of reasons. I'm wondering if the vanguard platform would no onger be a good place for her.

Fidielity, on the other hand, doesn't charge a transfer fee or closure fee and it looks like you can get most of the same vanguard funds through fidelity but instead of investing in vtwax, for example, you would go with the VT etf to avoid fees. Though, on the other side, the fidelity equivallent to vmfxx (spaxx) has higher fees for a lower payout and it does feel a little like I'm getting roped into a time share seminar anytime I call there.

So where would you recommdend someone just starting out put there money? Would it still be vanguard?
In my opinion Vanguard and Fidelity are both good choices. It's largely a matter of personal preference.

My personal preference is Vanguard because it has by far the largest menu of low cost funds to consider. Vanguard has the best money market funds.

In my opinion Vanguard is the best choice for the buy-and-hold, do-it-yourself investor.

Fidelity has local customer service offices in some cities, which might be important to some novice investors.
"local customer service offices." This is actually one of the reasons I moved to Fidelity even though we aren't novices. It was actually a move made recently because if I pass, my wife can just go in there and talk to our "rep," which was assigned to us (which I don't use for anything and he's free.) She knows we are mostly in passive index funds and she knows what funds we are in. It is just nice to have somewhere for her to go if she needs help. Vanguard has nothing like this, and we can use Vanguard ETFs at Fidelity at no extra cost. Also, Vanguard customer service on the phone is miserably slow and not 24/7. Good luck!
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by rkhusky »

mikeyzito22 wrote: Mon May 13, 2024 4:45 pm She knows we are mostly in passive index funds and she knows what funds we are in.
Also emphasize low-cost, because there are expensive index funds too.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by alpenglow »

I have accounts at Fidelity, Vanguard, and Schwab. I've been happy with all three, but would rank 1) Fido, 2) Schwab, 3) Vanguard. It is likely that I'll consolidate everything at Fido once I retire.
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Calhoon
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by Calhoon »

Okay, so it looks like the group consensus would be that it would be between vanguard and fidelity and that the 100 transfer fee/closing fee wouldn't be a big factor. The fee could very well be outweighed by a higher vmfxx return at vanguard.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by bondsr4me »

Calhoon wrote: Tue May 14, 2024 7:37 am Okay, so it looks like the group consensus would be that it would be between vanguard and fidelity and that the 100 transfer fee/closing fee wouldn't be a big factor. The fee could very well be outweighed by a higher vmfxx return at vanguard.
+1

I agree with your assessment above.
Unless you're a bonus chaser, the $100 transfer fee is irrelevant.
And yes, the higher VMFXX return is another great reason to choose Vanguard.
Good Luck with your choice.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by UpperNwGuy »

rkhusky wrote: Mon May 13, 2024 11:32 am Since half of Fidelity funds have ER’s greater than 0.5%, a novice investor is better off at Vanguard, so as not to get put into an expensive active fund. Fidelity would be fine if they have someone to advise them on which funds to choose and to whom they would turn if a Fidelity salesman tries to sell them on something different.
Fidelity has plenty of funds with ERs that are the same or lower than Vanguard's. It simply doesn't follow that a novice investor would be better at Vanguard. If the novice investor follows the three-fund portfolio, and manages their own portfolio, there won't be a temptation to invest in those higher cost funds. No need to interact with a Fidelity salesman.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by UpperNwGuy »

Calhoon wrote: Sun May 12, 2024 10:07 pm If you were in your early 20s would you open a brokerage account at vanguard or fidelity or somewhere else?
One of my children chose Fidelity and loves it. Another chose Robinhood and loves it. The third uses the TSP and loves it. My high school student neighbor who comes to me for investment advice chose Schwab and loves it. None of them chose Vanguard. All of them knew I had brokerage accounts at Vanguard, Schwab, and Fidelity.

By the way, this young generation prefers ETFs to mutual funds, and they don't want to talk to anyone on the phone. They want to use the app for all interactions.
Last edited by UpperNwGuy on Tue May 14, 2024 9:28 am, edited 4 times in total.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by Wiggums »

rkhusky wrote: Mon May 13, 2024 11:32 am Since half of Fidelity funds have ER’s greater than 0.5%, a novice investor is better off at Vanguard, so as not to get put into an expensive active fund. Fidelity would be fine if they have someone to advise them on which funds to choose and to whom they would turn if a Fidelity salesman tries to sell them on something different.
+1

I’d add that the money market funds at Vanguard pay more.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by ruralavalon »

mikeyzito22 wrote: Mon May 13, 2024 4:45 pmAlso, Vanguard customer service on the phone is miserably slow and not 24/7. Good luck!
My experience with Vanguard customer service is different, not slow at all. In my experience Vanguard customer service by phone has always been prompt, courteous and professional. Being a buy-and-hold investor, I have never had a need for customer service on weekends or evenings.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by rkhusky »

UpperNwGuy wrote: Tue May 14, 2024 8:10 am
rkhusky wrote: Mon May 13, 2024 11:32 am Since half of Fidelity funds have ER’s greater than 0.5%, a novice investor is better off at Vanguard, so as not to get put into an expensive active fund. Fidelity would be fine if they have someone to advise them on which funds to choose and to whom they would turn if a Fidelity salesman tries to sell them on something different.
Fidelity has plenty of funds with ERs that are the same or lower than Vanguard's. It simply doesn't follow that a novice investor would be better at Vanguard. If the novice investor follows the three-fund portfolio, and manages their own portfolio, there won't be a temptation to invest in those higher cost funds. No need to interact with a Fidelity salesman.
A novice investor might not know that. At least with Vanguard, even the active funds are relatively low cost.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by rkhusky »

UpperNwGuy wrote: Tue May 14, 2024 8:13 am By the way, this young generation prefers ETFs to mutual funds, and they don't want to talk to anyone on the phone. They want to use the app for all interactions.
Because they like trading stocks on their phones instead of playing Candy Crush?
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by ruralavalon »

rkhusky wrote: Tue May 14, 2024 10:05 am
UpperNwGuy wrote: Tue May 14, 2024 8:13 am By the way, this young generation prefers ETFs to mutual funds, and they don't want to talk to anyone on the phone. They want to use the app for all interactions.
Because they like trading stocks on their phones instead of playing Candy Crush?
Made me laugh :D :D .

This "younger generation" is by definition inexperienced, and so not necessarily a model for anyone to emulate.

So the practices of "this younger generation" are not a reason to use exchange traded funds (ETFs) rather than regular mutual funds.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by UpperNwGuy »

rkhusky wrote: Tue May 14, 2024 10:04 am
UpperNwGuy wrote: Tue May 14, 2024 8:10 am
rkhusky wrote: Mon May 13, 2024 11:32 am Since half of Fidelity funds have ER’s greater than 0.5%, a novice investor is better off at Vanguard, so as not to get put into an expensive active fund. Fidelity would be fine if they have someone to advise them on which funds to choose and to whom they would turn if a Fidelity salesman tries to sell them on something different.
Fidelity has plenty of funds with ERs that are the same or lower than Vanguard's. It simply doesn't follow that a novice investor would be better at Vanguard. If the novice investor follows the three-fund portfolio, and manages their own portfolio, there won't be a temptation to invest in those higher cost funds. No need to interact with a Fidelity salesman.
A novice investor might not know that. At least with Vanguard, even the active funds are relatively low cost.
But you're forgetting that the OP was about how a parent should advise a child about brokerages. I assume that the parent would also give advice about what types of funds/ETFs to purchase and what pitfalls to avoid.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by UpperNwGuy »

rkhusky wrote: Tue May 14, 2024 10:05 am
UpperNwGuy wrote: Tue May 14, 2024 8:13 am By the way, this young generation prefers ETFs to mutual funds, and they don't want to talk to anyone on the phone. They want to use the app for all interactions.
Because they like trading stocks on their phones instead of playing Candy Crush?
As the father of three young adults, I am annoyed that you are making fun of them.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by rkhusky »

UpperNwGuy wrote: Tue May 14, 2024 10:19 am
rkhusky wrote: Tue May 14, 2024 10:05 am
UpperNwGuy wrote: Tue May 14, 2024 8:13 am By the way, this young generation prefers ETFs to mutual funds, and they don't want to talk to anyone on the phone. They want to use the app for all interactions.
Because they like trading stocks on their phones instead of playing Candy Crush?
As the father of three young adults, I am annoyed that you are making fun of them.
I have nephews that like trading stocks on their phones. My kids aren’t old enough for stocks, but once they get their first 401k’s, I will advise to buy, hold and rebalance, hopefully a low cost target date fund, so they don’t even have to do the latter.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by Cocoa Beach Bum »

rkhusky wrote: Tue May 14, 2024 10:04 am
UpperNwGuy wrote: Tue May 14, 2024 8:10 am
rkhusky wrote: Mon May 13, 2024 11:32 am Since half of Fidelity funds have ER’s greater than 0.5%, a novice investor is better off at Vanguard, so as not to get put into an expensive active fund. Fidelity would be fine if they have someone to advise them on which funds to choose and to whom they would turn if a Fidelity salesman tries to sell them on something different.
Fidelity has plenty of funds with ERs that are the same or lower than Vanguard's. It simply doesn't follow that a novice investor would be better at Vanguard. If the novice investor follows the three-fund portfolio, and manages their own portfolio, there won't be a temptation to invest in those higher cost funds. No need to interact with a Fidelity salesman.
A novice investor might not know that. At least with Vanguard, even the active funds are relatively low cost.
Really? Vanguard's market neutral fund, VMNFX, might be very appealing to a cautious, nervous novice investor who's looking for a fund designed to weather a market downturn. Vanguard only charges a mere 1.80% expense ratio for its investor shares.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by PersonalFinanceJam »

UpperNwGuy wrote: Tue May 14, 2024 8:13 am
Calhoon wrote: Sun May 12, 2024 10:07 pm If you were in your early 20s would you open a brokerage account at vanguard or fidelity or somewhere else?
One of my children chose Fidelity and loves it. Another chose Robinhood and loves it. The third uses the TSP and loves it. My high school student neighbor who comes to me for investment advice chose Schwab and loves it. None of them chose Vanguard. All of them knew I had brokerage accounts at Vanguard, Schwab, and Fidelity.

By the way, this young generation prefers ETFs to mutual funds, and they don't want to talk to anyone on the phone. They want to use the app for all interactions.
+1 The choice of broker just isn't that impactful anymore. People making jokes in parts of this thread only validate the younger generation's beliefs that the "olds" are out of touch.

It is an app economy now for better or worse. I don't even buy gas without an app and I'm far from being in my 20's.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by drk »

Calhoon wrote: Sun May 12, 2024 10:07 pm it does feel a little like I'm getting roped into a time share seminar anytime I call there.
This won't be an issue for a 20-something because they'll never call. Fidelity and Schwab both offer live chat staffed by real people.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by AllieTB1323 »

We have accounts at Vanguard and Fidelity. When our granddaughter asked which brokerage would be best we recommended Fidelity. The main reasons we recommended Fidelity was the quality of their website and she would be able to invest in many Fidelity Mutual Funds with a $0.00 minimum vs. $3000.00 at Vanguard.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by rkhusky »

Cocoa Beach Bum wrote: Tue May 14, 2024 1:41 pm
rkhusky wrote: Tue May 14, 2024 10:04 am
UpperNwGuy wrote: Tue May 14, 2024 8:10 am
rkhusky wrote: Mon May 13, 2024 11:32 am Since half of Fidelity funds have ER’s greater than 0.5%, a novice investor is better off at Vanguard, so as not to get put into an expensive active fund. Fidelity would be fine if they have someone to advise them on which funds to choose and to whom they would turn if a Fidelity salesman tries to sell them on something different.
Fidelity has plenty of funds with ERs that are the same or lower than Vanguard's. It simply doesn't follow that a novice investor would be better at Vanguard. If the novice investor follows the three-fund portfolio, and manages their own portfolio, there won't be a temptation to invest in those higher cost funds. No need to interact with a Fidelity salesman.
A novice investor might not know that. At least with Vanguard, even the active funds are relatively low cost.
Really? Vanguard's market neutral fund, VMNFX, might be very appealing to a cautious, nervous novice investor who's looking for a fund designed to weather a market downturn. Vanguard only charges a mere 1.80% expense ratio for its investor shares.
I suppose if they were looking for the most expensive fund, like you did, that’s the one they would pick. The next most expensive is 0.80%, and then there are about 6 more Investor class above 0.5%. So, maybe 9 out of 270, or 3%. Out of all 379 funds and share classes, their 50th most expensive fund is at 0.30%. The 100th most expensive is at 0.17%.

I was thinking more of Vanguard’s Wellington and Wellesley funds. Even the US Growth fund, which I happened into when I was starting out, isn’t too bad at 0.30% for Investor shares.

Half of Fidelity’s funds are 0.5% or above. Their 100th most expensive offering, out of 391, is at 0.67%, and their 200th most expensive is 0.45%. A novice investor would be much more likely to chance into an expensive active fund at Fidelity. Not to mention their neat trick of naming their expensive target date funds nearly identically to their low cost ones. Wonder how many people have fallen for that?
Last edited by rkhusky on Tue May 14, 2024 3:58 pm, edited 3 times in total.
mikeyzito22
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by mikeyzito22 »

ruralavalon wrote: Tue May 14, 2024 9:25 am
mikeyzito22 wrote: Mon May 13, 2024 4:45 pmAlso, Vanguard customer service on the phone is miserably slow and not 24/7. Good luck!
My experience with Vanguard customer service is different, not slow at all. In my experience Vanguard customer service by phone has always been prompt, courteous and professional. Being a buy-and-hold investor, I have never had a need for customer service on weekends or evenings.
Sure. I don’t use customer service much either. My comment was mainly about having a real person, in person, for my wife to speak to if she needed when I was gone. Also for a younger person, the UI at Fidelity is much easier (for me) than at Vanguard. YMMV.
UpperNwGuy
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by UpperNwGuy »

rkhusky wrote: Tue May 14, 2024 3:45 pm Half of Fidelity’s funds are 0.5% or above. A novice investor would be much more likely to chance into an expensive active fund at Fidelity. Not to mention their neat trick of naming their expensive target date funds nearly identically to their low cost ones. Wonder how many people have fallen for that?
You remain unwilling to accept the fact that novice investors, once educated in the importance of ERs, are perfectly capable and highly motivated to go with the less expensive funds. I seem to have more confidence in young people than you do.
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Cocoa Beach Bum
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by Cocoa Beach Bum »

rkhusky wrote: Tue May 14, 2024 3:45 pm...
Half of Fidelity’s funds are 0.5% or above. Their 100th most expensive offering, out of 391, is at 0.67%, and their 200th most expensive is 0.45%. A novice investor would be much more likely to chance into an expensive active fund at Fidelity.
...
This is a bogus argument given that both Vanguard and Fidelity brokerages offer to sell hundreds of mutual funds from outside firms. But thanks for playing.
https://investor.vanguard.com/investmen ... tual-funds
“How did you go bankrupt?" "Two ways. Gradually, then suddenly.”
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by steadyosmosis »

Schwab.
Age<59.5 | Early-retired | AA ~55/45 | Taxable=100% VTI | Roth IRA=97% equities | HSA=94% equities | Traditional IRA=100% fixed income | I spend from the taxable account |
rkhusky
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by rkhusky »

UpperNwGuy wrote: Tue May 14, 2024 3:55 pm
rkhusky wrote: Tue May 14, 2024 3:45 pm Half of Fidelity’s funds are 0.5% or above. A novice investor would be much more likely to chance into an expensive active fund at Fidelity. Not to mention their neat trick of naming their expensive target date funds nearly identically to their low cost ones. Wonder how many people have fallen for that?
You remain unwilling to accept the fact that novice investors, once educated in the importance of ERs, are perfectly capable and highly motivated to go with the less expensive funds. I seem to have more confidence in young people than you do.
But there’s the lure of performance chasing. Out of Fidelity’s large stable of active funds, I am sure that they can point to several that have recently outperformed index funds by much more than the ER.
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by Lastrun »

rkhusky wrote: Tue May 14, 2024 4:38 pm But there’s the lure of performance chasing. Out of Fidelity’s large stable of active funds, I am sure that they can point to several that have recently outperformed index funds by much more than the ER.
There is "lure" everywhere, including Vanguard.

From their website:
Actively managed funds try to beat market returns with investments hand-picked by professional money managers. You may be surprised by our active funds' performance.
Your personalized active/index investment option of Vanguard ETFs® and mutual funds will combine the chance for higher returns from actively managed funds with the broad diversification of index funds. It may also include up to 3 Advice Select funds available exclusively to our advice services clients.
And I think the advisor funds are 70bps all in.
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nps
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by nps »

Lastrun wrote: Tue May 14, 2024 5:39 pm
rkhusky wrote: Tue May 14, 2024 4:38 pm But there’s the lure of performance chasing. Out of Fidelity’s large stable of active funds, I am sure that they can point to several that have recently outperformed index funds by much more than the ER.
There is "lure" everywhere, including Vanguard.
I agree. I feel like some BHs are living in the past with these hero/antihero tropes. The major players in the financial services industry are a lot more alike now then they ever were before.
sycamore
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by sycamore »

Interesting all this discussion over a $100 closing fee that may never happen.

I remember when a single trade commission was $49.95! At a discount brokerage.

Yeah, back when $49.95 was real money.

I also remember walking to school in the snow. Uphill. Both ways.

:)

Here's some fun history.
https://www.latimes.com/archives/la-xpm ... story.html

Things are quite different now.
UpperNwGuy
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Re: Vanguard, Fidelty, or elsewhere for early investor

Post by UpperNwGuy »

rkhusky wrote: Tue May 14, 2024 4:38 pm
UpperNwGuy wrote: Tue May 14, 2024 3:55 pm
rkhusky wrote: Tue May 14, 2024 3:45 pm Half of Fidelity’s funds are 0.5% or above. A novice investor would be much more likely to chance into an expensive active fund at Fidelity. Not to mention their neat trick of naming their expensive target date funds nearly identically to their low cost ones. Wonder how many people have fallen for that?
You remain unwilling to accept the fact that novice investors, once educated in the importance of ERs, are perfectly capable and highly motivated to go with the less expensive funds. I seem to have more confidence in young people than you do.
But there’s the lure of performance chasing. Out of Fidelity’s large stable of active funds, I am sure that they can point to several that have recently outperformed index funds by much more than the ER.
You assume that the younger generation is willing to talk to a Fidelity customer service rep who might suggest such things. My experience is that these folk want to do everything through an app and not talk to anyone.
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