Vanguard or Fidelity..does it matter ?

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poppa23
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Vanguard or Fidelity..does it matter ?

Post by poppa23 »

Very simple. Im opening up a taxable account . Does it matter Vanguard or Fidelity..I dont care about the brick and mortar aspect of there being a Fidelity next to me..
sport
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Re: Vanguard or Fidelity..does it matter ?

Post by sport »

Your funds will generally cost you less at Vanguard. It may not be 100% true, but almost so.

Jeff
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ruralavalon
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Re: Vanguard or Fidelity..does it matter ?

Post by ruralavalon »

bogleheads wiki wrote:The building blocks of Boglehead-style investing are low-expense-ratio index mutual funds and/or ETFs. Vanguard fans would suggest that Vanguard has the best and most complete lineup of such funds,
Please see this: Wiki article link: Fidelity .
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gkaplan
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Re: Vanguard or Fidelity..does it matter ?

Post by gkaplan »

I suggest you also go to the Fidelity forum at Morningstar and see what they say. (From past experience, they probably won't be as objective as this forum.)
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nisiprius
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Re: Vanguard or Fidelity..does it matter ?

Post by nisiprius »

It doesn't matter very much. 6.01-of-one and 49.917%-of-a-dozen of the other. If you can tell us what things are important to you then you might get more useful responses.

I will say this much. If you have already decided that the core of your investments are going to be Vanguard index funds--

a) Vanguard, rather than other excellent mutual fund families,
b) index, rather than active,
c) mutual funds, rather than ETFs--

--if all of these things are true, then Vanguard has a very slight edge due to absence of transaction fees for their own funds, availability of very-slightly-lower-cost Admiral shares for a $10,000 minimum purchase, and some convenience features.

Also, if one already subscribes to the Boglehead philosophy, then I think Vanguard has a congenial "we-speak-your-language" atmosphere to it. There is no statue of Bogle at 82 Devonshire Street, Boston. At this point I'm enough of a cult member for that to mean a tiny bit to me, but it shouldn't to you.

If you are not committed to the use of Vanguard index funds as the core of your investment portfolio, then I think Fidelity probably does a slightly wider range of things a tiny bit better than Vanguard.
Last edited by nisiprius on Tue May 15, 2012 5:57 pm, edited 1 time in total.
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JupiterJones
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Re: Vanguard or Fidelity..does it matter ?

Post by JupiterJones »

Another important distinction is the ownership structure of Vanguard.

Vanguard is unique in that it's owned by its own funds. Every investor is, in part, an owner of Vanguard itself. What's good for one is good for the other. You're buying a truly "mutual" fund.

Fidelity has the more typical structure of being owned by Fidelity shareholders who are not necessarily Fidelity investors. Decisions that benefit the shareholder may or may not be in the best interests of the investors. There's more of an inherent conflict of interest.

All that said, I have most of my retirement with Fidelity, because their Spartan funds are cheaper than the Vanguard equivalent in my 403b. I'm not losing any sleep over it.

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matjen
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Re: Vanguard or Fidelity..does it matter ?

Post by matjen »

I'm not sure it matters much and that is why I plan on using both! :D
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Re: Vanguard or Fidelity..does it matter ?

Post by rotorhead »

The cost differences are pretty slight. Fidelity's Spartan funds are quite competitive with Vanguard's index funds. My company's 401k was managed by Fidelity all the years that I worked there. I left it in place after I retired. Then couple of years ago, the company transferred management to another firm; so I did a rollover IRA to Fidelity then. It's worked out OK; they have a brick and mortar store only 10 minutes from my house, but that wasn't the deciding factor. I also have accounts at Vanguard and Schwab. All have their merits. The Schwab account was my very first IRA, a long, long, time ago. Not practical to keep it going though, so will close it soon, and transfer to Fidelity.
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retiredjg
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Re: Vanguard or Fidelity..does it matter ?

Post by retiredjg »

poppa23 wrote:Very simple. Im opening up a taxable account . Does it matter Vanguard or Fidelity..I dont care about the brick and mortar aspect of there being a Fidelity next to me..
It might depend on what you want to buy.
  • -For the Total Stock Market Index funds, the differences are too small to make any difference.

    -For Total International, there is a difference in fund composition (presence or absence of small caps) and a difference in expense ratio (.18% vx 24% now and 18% vs .34% starting in January).
All other things being equal, I'd choose Vanguard for the more complete and cheaper International. All things not being equal, either is a good choice.
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momar
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Re: Vanguard or Fidelity..does it matter ?

Post by momar »

See my signature, which happened when i rolled a small amount of after tax 401k money from fidelity to my roth at vanguard. It made me laugh, but i also wouldnt want to invest somewhere that pushed active funds on me after i told them why i like vanguard.
"Index funds have a place in your portfolio, but you'll never beat the index with them." - Words of wisdom from a Fidelity rep
Muchtolearn
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Re: Vanguard or Fidelity..does it matter ?

Post by Muchtolearn »

momar wrote:See my signature, which happened when i rolled a small amount of after tax 401k money from fidelity to my roth at vanguard. It made me laugh, but i also wouldnt want to invest somewhere that pushed active funds on me after i told them why i like vanguard.
I agree with your feelings on this. But the rep is factually correct. :confused
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momar
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Re: Vanguard or Fidelity..does it matter ?

Post by momar »

Muchtolearn wrote:
momar wrote:See my signature, which happened when i rolled a small amount of after tax 401k money from fidelity to my roth at vanguard. It made me laugh, but i also wouldnt want to invest somewhere that pushed active funds on me after i told them why i like vanguard.
I agree with your feelings on this. But the rep is factually correct. :confused
Yes, but the implication is what counts.
"Index funds have a place in your portfolio, but you'll never beat the index with them." - Words of wisdom from a Fidelity rep
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corner559
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Re: Vanguard or Fidelity..does it matter ?

Post by corner559 »

JupiterJones wrote:Another important distinction is the ownership structure of Vanguard.

Vanguard is unique in that it's owned by its own funds. Every investor is, in part, an owner of Vanguard itself. What's good for one is good for the other. You're buying a truly "mutual" fund.

Fidelity has the more typical structure of being owned by Fidelity shareholders who are not necessarily Fidelity investors. Decisions that benefit the shareholder may or may not be in the best interests of the investors. There's more of an inherent conflict of interest.

JJ
I keep hearing the ownership structure framed as a so-called benefit when compared to other firms. But for most investors does that really matter? I don't sit on VG's board, have no decision-making authority or voting shares in the company. How is this truly a benefit to me as a VG customer? Or is it just a marketing gimmick?
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Re: Vanguard or Fidelity..does it matter ?

Post by sport »

corner559 wrote:
JupiterJones wrote:Another important distinction is the ownership structure of Vanguard.

Vanguard is unique in that it's owned by its own funds. Every investor is, in part, an owner of Vanguard itself. What's good for one is good for the other. You're buying a truly "mutual" fund.

Fidelity has the more typical structure of being owned by Fidelity shareholders who are not necessarily Fidelity investors. Decisions that benefit the shareholder may or may not be in the best interests of the investors. There's more of an inherent conflict of interest.

JJ
I keep hearing the ownership structure framed as a so-called benefit when compared to other firms. But for most investors does that really matter? I don't sit on VG's board, have no decision-making authority or voting shares in the company. How is this truly a benefit to me as a VG customer? Or is it just a marketing gimmick?
Vanguard prices funds at cost. They do not make a profit on your investments. Fidelity is a for-profit business. IMO, the only reason they have some very low cost funds is to compete with Vanguard. If there were no Vanguard, Fidelity's fees would be higher.
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Re: Vanguard or Fidelity..does it matter ?

Post by Hallertaux »

Why no mention of Schwab? I use them mostly because they offer an extensive line of Schwab managed funds with extremely low exp ratios (several index funds as low as 0.09) and the minimum investment is only $100 which is great for a recent college grad like me who is only a substitute teacher. Plus the free brokerage account with checking (also free) allows me to invest outside of my Roth for a more liquid long-term that offers a great return. It's also commission free (as I'm sure vanguard and fidelity are?) for online trades of mutual funds.

Plus there's other nice benefits such as all ATM fees and cash-exchange fees being compensated. I did a ton of research on discount brokers and frankly I couldn't find any that came close to this.
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Re: Vanguard or Fidelity..does it matter ?

Post by nisiprius »

I was with Schwab around 2000-2003 or so and I liked them a lot. I think they're a fine firm and should indeed be considered. One of my family members uses Schwab.

However, unlike TIAA-CREF, Fidelity, and Vanguard, Schwab actually did manage to tick me off to the point where I left. It probably should not count against them because it occurred at a time when one David S. Pottruck had just taken over management of the firm from Charles R. Schwab, and it lost its way and ticked a lot of people off. I didn't notice the change of management at the time. In my case, it was a case of being seduced and abandoned on fees. When I opened my account, they were making a big deal about their friendliness to small investors and their low costs. Their ads specifically touted the fact that account maintenance fees were waived for total accounts of $10,000 or more. Since my account at the time was about $70,000 that seemed fine. Within a remarkably short period of time the minimum was raised, first to $30,000, then to $100,000. And I'm afraid I didn't even notice it until I'd paid several $30 quarterly account maintenance fees. $120/year was well over 1% of my account value. I was furious.

I didn't perceive it at the time but I now suspect that part of the purpose of the "Talk to Chuck" campaign was to signal the ouster of Pottruck and the return of Charles R. Schwab.

So, let me try to be fair about this. If you go with Schwab, I think you should make a point of letting them know that you are joining them because of their low fees, and you should let them know you expect those low fees to be permanent.
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Hallertaux
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Re: Vanguard or Fidelity..does it matter ?

Post by Hallertaux »

Completely understandable! I'm experiencing that with AT&T right now where they apparently signed us up for a promotion that comes with a year long contract and "notified us" via a letter we never received and is now trying to charge us an $80 disconnect fee.

But I would be furious as well, I think you're right that they are trying to overcome that with the 'talk to chuck' campaign; when I went to fee information about my Roth nearly 1/3rd of the page was taken up by a "$0 account maintenance fee" image. It seems that they are definitely trying to get the point across. :beer
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Re: Vanguard or Fidelity..does it matter ?

Post by JW-Retired »

jsl11 wrote: Vanguard prices funds at cost. They do not make a profit on your investments. Fidelity is a for-profit business. IMO, the only reason they have some very low cost funds is to compete with Vanguard. If there were no Vanguard, Fidelity's fees would be higher.
Very true. Likewise, if there were no Fidelity, Vanguard's fees would be higher. Competition be praised!

Non-profits can and do charge outlandish fees. Try out your nearest non-profit ER.
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Re: Vanguard or Fidelity..does it matter ?

Post by JW-Retired »

poppa23 wrote: Im opening up a taxable account . Does it matter Vanguard or Fidelity..I dont care about the brick and mortar aspect of there being a Fidelity next to me..
Do you want a mutual fund account or a brokerage account? Don't use a Fido brokerage account if you want Vanguard funds as there will be extra fees. If your needs are satisfied by Fidelity's dozen low cost Spartan Index Funds there is no difference, they are pretty equally as low cost as the Vanguard ones. If you want managed funds, those at Vanguard are going to be cheaper.

I have mutual fund accounts at both companies and a brokerage account at Fido. All the IRAs are at Vanguard. A bit more money at Fido. If/when I ever roll over my 401k I would probably put it at Vanguard. IMO, not a lot of difference.
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Re: Vanguard or Fidelity..does it matter ?

Post by mslaw »

Appreciate all the nuances of which investment firm might be easier than the other for a particular person. Sometimes it is important to consider not only the actual investments but how the "next" owner of the assets will maneuver within the system. When Vanguard closed their brick and mortar, I found Fidelity easier to deal with when there were complicated ownership transfers and trust accounts. New financial assets owners are often a bit more at ease going into an office.
This is probably shocking on this board, but some of us still have paper stock certificates. So old school.
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Re: Vanguard or Fidelity..does it matter ?

Post by carolinaman »

I have mutual fund and brokerage accounts at both. Each has certain advantages. Vanguard has lower fees and a better selection of passive funds/etfs. Fidelity has better website and online services and also has a good fixed income desk that has been very helpful to me. Also, Fidelity has local office and I can have in person meeting with account rep to discuss strategy and needs. True, they do pitch their own funds but also include good general advice. I intend to continue using both.
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Re: Vanguard or Fidelity..does it matter ?

Post by retiredjg »

Hallertaux wrote:Why no mention of Schwab? I use them mostly because they offer an extensive line of Schwab managed funds with extremely low exp ratios (several index funds as low as 0.09) and the minimum investment is only $100 which is great for a recent college grad like me who is only a substitute teacher.
The $100 minimums make Schwab a good place for many people to start out. However, most folks here are not looking for managed funds and Schwab's list of index funds is extremely limited. An index fund investor can get started at Schwab, but their choices are not adequate for long term.

Edit: I'm talking about mutual funds here. I sometimes forget that ETFs exist and Schwab does have a decent lineup of no transaction fee ETFs.
Last edited by retiredjg on Wed May 16, 2012 10:35 am, edited 1 time in total.
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Re: Vanguard or Fidelity..does it matter ?

Post by nvboglehead »

I have an accounts at both Fidelity and Vanguard. I closed my account at Schwab for the same reasons as Nisprius. I don't plan on "talking with Chuck" ever again.

I like some of Fidelity's products and services. However, I would never use them for my equity index fund positions in taxable accounts. I don't trust them with their fee waivers to compete with Vanguard. This would also apply to Schwab's index ETFs. If either of these firms decide that they need to make more money to pay their costs, like the expense of all those retail locations (Fidelity has over 100; Schwab over 300), and/or to increase the ROI to the Schwab and Fidelity stockholders, you could be stuck with them because of unrealized capital gains.

On many occasions on this forum, I have seen others say that it is fine to use Schwab or Fidelity because they are charging about the same in expense ratios on their index fund products as is Vanguard. I think it is another example of a "frog in a pot". They lure you in with an enticing expense ratio. Over time they might raise their fees and you would not be able to leave because of the capital gains taxes that would have to be paid on liquidating your positions.


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poppa23
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Re: Vanguard or Fidelity..does it matter ?

Post by poppa23 »

nvboglehead wrote:I have an accounts at both Fidelity and Vanguard. I closed my account at Schwab for the same reasons as Nisprius. I don't plan on "talking with Chuck" ever again.

I like some of Fidelity's products and services. However, I would never use them for my equity index fund positions in taxable accounts. I don't trust them with their fee waivers to compete with Vanguard. This would also apply to Schwab's index ETFs. If either of these firms decide that they need to make more money to pay their costs, like the expense of all those retail locations (Fidelity has over 100; Schwab over 300), and/or to increase the ROI to the Schwab and Fidelity stockholders, you could be stuck with them because of unrealized capital gains.

On many occasions on this forum, I have seen others say that it is fine to use Schwab or Fidelity because they are charging about the same in expense ratios on their index fund products as is Vanguard. I think it is another example of a "frog in a pot". They lure you in with an enticing expense ratio. Over time they might raise their fees and you would not be able to leave because of the capital gains taxes that would have to be paid on liquidating your positions.


Dale

I think this is the point that tips it. Thanks for all the help put there. This is a great forum.
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Re: Vanguard or Fidelity..does it matter ?

Post by livesoft »

But to keep the frog in the pot ....

If one uses Vanguard ETFs, then one is not beholden to keeping assets at a given broker since those ETFs can be transferred "in-kind" to another broker.

Fidelity does have some nice tools: Retirement Income Planner and Income Strategy Planner. Plus Fidelity gets one's ETF dividends a day faster than at Vanguard.
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Re: Vanguard or Fidelity..does it matter ?

Post by Kumte »

I also have accounts at both places.
Advantages of Fidelity account
I like some of their alert systems. I get an email reminder everytime there is a TIPS auction which I can trade on their site without fees. I also get invited to participate in IPOs. The other advantage I found with Fidelity is that I have their myCash account. I have done away with my brick and mortar banking accounts. So whenever I get a manual check I go to the nearest Fidelity office and deposit it. Also my salary is direct deposited one day earlier.
Their User interface is pretty good. Their portfolio analysis and performance tool also helps you analyze your investments. They calculate your annual rate of return across all accounts for various periods of time.
Advantages of Vanguard
Vanguard ofcourse is for their low fees and admiral funds.
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Re: Vanguard or Fidelity..does it matter ?

Post by exigent »

Where we have a choice, our funds are at Vanguard. For certain (employer-related) accounts, our funds are at Fidelity. I'm happy with both. As others have pointed out, the Spartan funds are quite competitive from a pricing perspective. That being said, I have more trust that Vanguard won't jack up expense ratios in the future. It's conceivable (though perhaps not likely) that Fidelity would. If that happens, you'll either have to deal with it or move your money. In a taxable account, there are tax implications of doing this. Good luck.
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Re: Vanguard or Fidelity..does it matter ?

Post by minskbelarus47 »

I used a one time Vanguard financial planner (free from my company 401K), and he recommended some Vanguard Funds and some Fidelity.

I went to Fidelity and they basically did the same. Recommended VG funds and ETFs.

Fidelity website and planning tools pretty easy to use. I can walk to the Tyson's Corner Fidelity Office and talk to Dave.

Both seem to have some sense of customer first. I am pretty impressed with both, not that that counts for anything. I trust them both with my money.

Company 401K in VG, rest in Fido, TSP. It works for me.
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Re: Vanguard or Fidelity..does it matter ?

Post by FordBoy33 »

It probably doesn't matter if you're going to stick with the broad-based, low-cost index funds at either place. I'm moving some accounts from Fidelity to Vanguard, since I decided to primarily use the Vanguard funds. Some of our accounts have to remain at Fidelity, and we're in Fidelity funds there. Both seem fine for the Bogleheads approach.
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Re: Vanguard or Fidelity..does it matter ?

Post by sport »

JW Nearly Retired wrote:Very true. Likewise, if there were no Fidelity, Vanguard's fees would be higher. Competition be praised!
I disagree with this. Vanguard has no reason to have higher fees. They do not have shareholders or owners to give that "profit" to. They provide investing services "at cost". In fact, recently, due to growth of some funds, and the associated economies of scale, Vanguard has lowered their fees on approximately 30 funds. This was not in response to Fidelity or any other competitor. Vanguard's primary objective is to offer the lowest fees possible. In addition, Fidelity has very low fees only on certain funds, for competitive purposes. Vanguard has very low fees on all of their funds. They are not all the same, because some types of funds are more expensive to operate, and also because some of their funds are smaller than others. Nevertheless, for each type of fund, and they have over 100 of them IIRC, all of their fees are very low compared to any competitor.

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Re: Vanguard or Fidelity..does it matter ?

Post by Johm221122 »

Hallertaux wrote

'Why no mention of Schwab? I use them mostly because they offer an extensive line of Schwab managed funds with extremely low exp ratios "

This would not be something that would be often recommended on this site.I would be curious to which funds you use?and why?
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Re: Vanguard or Fidelity..does it matter ?

Post by exigent »

Johm221122 wrote:Hallertaux wrote

'Why no mention of Schwab? I use them mostly because they offer an extensive line of Schwab managed funds with extremely low exp ratios "

This would not be something that would be often recommended on this site.I would be curious to which funds you use?and why?
You cut that quote short. He went on to talk about index funds, so by "Schwab managed funds", I think he means they are operated by Schwab, not that they are actively managed funds.

Schwab has some nice index offerings with low expense ratios and (importantly for those just starting out) very low minimums.
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Re: Vanguard or Fidelity..does it matter ?

Post by nisiprius »

minskbelarus47 wrote:I used a one time Vanguard financial planner (free from my company 401K), and he recommended some Vanguard Funds and some Fidelity.

I went to Fidelity and they basically did the same. Recommended VG funds and ETFs.
That's very impressive and speaks well for both firms. But I'm dying to know if you can remember any of the specific cross-firm-suggestions--which Fidelity funds were well-regarded by the Vanguard rep and vice versa.

(Is it possible that for smaller accounts Fidelity would actually prefer that you buy the Vanguard fund and pay a $75 fee than buy the Fidelity Spartan counterpart?)
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Re: Vanguard or Fidelity..does it matter ?

Post by Saving$ »

I was recently the administrator and later executor of an estate with assets at Fidelity. I had never dealt with them before. Of the 4 financial institutions with whom I dealt as executor, Fidelity was the most difficult, obstinate, unhelpful institution. The estate had sufficient assets to be assigned to some sort of special servicing. I went through 14 months of pure frustration, and vowed to get rid of Fidelity as soon as I could. I was annoyed that the decedent had left a mess, and more annoyed that Fidelity was doing everything in their power to make everything more difficult than it needed to be, making up rules as they went along, ignoring one of the judges orders (how does that even happen?) and claiming all sorts of their rigamarole were mandated by law, when I knew full well that was not true - USAA, Wells Fargo and Vanguard got the same orders and paperwork, and had no problem complying. I vowed I would never subject my executor and beneficiaries to the Fidelity hell.

After about 14 months of dealing with Fidelity giving me the runaround, I stumbled upon a phone rep who could not believe what I had been through. He promised to personally address the issues. I did not have much hope, but he called back within a few hours and admitted Fidelity had made a mess of things, and he would need a supervisor to help him unravel it. He dutifully called me back every day for a few days until he got everything fixed. That was impressive, and my stance softened just a bit.

Then I found this board, and was preparing to move my assets to Vanguard. However, then this board taught me about backdoor Roth accounts, moving untaxed IRA assets to a solo 401k to accommodate a backdoor Roth, etc. I now find myself with significant assets at Fidelity. Fidelity advantages over Vanguard are:
- Allow IRA assets to be rolled into solo 401k, Vanguard does not allow
- Pay account closing fees from other institutions when rolling accounts to Fidelity to consolidate. Vanguard does not pay or reimburse these costs.
- Do not seem to require all IRA accounts to have the same beneficiary, which makes estate planning easier.

The other current advantage I have is the direct dial number for the rep who helped me with the above situation. I don't deal with anyone except him, and since I adopted that policy, Fidelity customer service has been great.
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Re: Vanguard or Fidelity..does it matter ?

Post by Dale_G »

I had a 401k and non-qualified deferred comp plan at Fido for about 15 years. Never had to talk to them - everything worked the way it was supposed to. The Spartan equity funds were reasonably priced, but all of the bond funds available in the plan were about 3 times more expensive than similar funds at Vanguard.

I wouldn't use Fido for a "bond heavy" account.

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poppa23
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Re: Vanguard or Fidelity..does it matter ?

Post by poppa23 »

Saving$ wrote:I was recently the administrator and later executor of an estate with assets at Fidelity. I had never dealt with them before. Of the 4 financial institutions with whom I dealt as executor, Fidelity was the most difficult, obstinate, unhelpful institution. The estate had sufficient assets to be assigned to some sort of special servicing. I went through 14 months of pure frustration, and vowed to get rid of Fidelity as soon as I could. I was annoyed that the decedent had left a mess, and more annoyed that Fidelity was doing everything in their power to make everything more difficult than it needed to be, making up rules as they went along, ignoring one of the judges orders (how does that even happen?) and claiming all sorts of their rigamarole were mandated by law, when I knew full well that was not true - USAA, Wells Fargo and Vanguard got the same orders and paperwork, and had no problem complying. I vowed I would never subject my executor and beneficiaries to the Fidelity hell.

After about 14 months of dealing with Fidelity giving me the runaround, I stumbled upon a phone rep who could not believe what I had been through. He promised to personally address the issues. I did not have much hope, but he called back within a few hours and admitted Fidelity had made a mess of things, and he would need a supervisor to help him unravel it. He dutifully called me back every day for a few days until he got everything fixed. That was impressive, and my stance softened just a bit.

Then I found this board, and was preparing to move my assets to Vanguard. However, then this board taught me about backdoor Roth accounts, moving untaxed IRA assets to a solo 401k to accommodate a backdoor Roth, etc. I now find myself with significant assets at Fidelity. Fidelity advantages over Vanguard are:
- Allow IRA assets to be rolled into solo 401k, Vanguard does not allow
- Pay account closing fees from other institutions when rolling accounts to Fidelity to consolidate. Vanguard does not pay or reimburse these costs.
- Do not seem to require all IRA accounts to have the same beneficiary, which makes estate planning easier.

The other current advantage I have is the direct dial number for the rep who helped me with the above situation. I don't deal with anyone except him, and since I adopted that policy, Fidelity customer service has been great.
You shouldnt have to jump through those hoops to get good customer service..
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JPH
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Re: Vanguard or Fidelity..does it matter ?

Post by JPH »

Someone recently posted here that Fidelity will reimburse the investor if funds ever are lost because of fraudulent use. I was able to confirm that policy on the Fidelity website. I have not found a similar statement of policy on the Vanguard site. I don't know their policy. I just recovered from having my Bogleheads account hijacked, so I am seriously considering this risk.

Edit: Vanguard offers basically the same policy.
Last edited by JPH on Fri Jul 06, 2012 6:27 pm, edited 1 time in total.
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yahoo
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Re: Vanguard or Fidelity..does it matter ?

Post by yahoo »

I like Fidelity's cash management acct. Free checking, and ATM fees always rebated on any atm in the US. I can hold Vanguard ETF's in my acct and the commssions are small 7.95 online.
A Fidelity rep once told me "we have a healthy respect for Vanguard".. I think the quality of the phone reps are similar (some great , some not so great)
ProfessorX
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Re: Vanguard or Fidelity..does it matter ?

Post by ProfessorX »

I have both Fidelity and Vanguard. And I choose to keep both. I have a legacy inactive Roth IRA at Fidelity along with what used to be called their "MySmartCash" checking account.

Then I have an active Roth IRA at Vanguard, along with all my employer retirement accounts.

Vanguard is great for having a large collection of low-fee index funds. You've already heard a lot about this.

Fidelity has the Spartan funds, which are not nearly as comprehensive as Vanguards offerings. But at Fidelity I have a 2% on all purchases no-limit cash back AmEx card, a 1.5% on all purchases no-limit cash back Visa card, the MySmartCash account which has no fee withdrawals even in other currencies in foreign countries, and Fidelity also has this incredible programmable auto bill pay set up. Fidelity allows me to make check deposits using my iPhone into checking (I use it all the time). Fidelity does seem to require that you carry a sufficient balance with them to keep the MySmartCash features, but I never ran into it personally.

You don't get a lot of these (nice) "frills" at Vanguard, I guess they are paid for at Fidelity by all the people paying 0.81% ER in the Contrafund etc :D
trademil
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Re: Vanguard or Fidelity..does it matter ?

Post by trademil »

nisiprius wrote:Since my account at the time was about $70,000 that seemed fine. Within a remarkably short period of time the minimum was raised, first to $30,000, then to $100,000. And I'm afraid I didn't even notice it until I'd paid several $30 quarterly account maintenance fees. $120/year was well over 1% of my account value. I was furious.
$120/year is 1% of 12,000$, it is only 0.17% of 70,000$.
Dandy
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Re: Vanguard or Fidelity..does it matter ?

Post by Dandy »

I used to have investments in both companies, now just Vanguard. I found Fidelity kind of lost there way, didn't feel they were as customer focused as Vanguard. Good company, some good products, maybe a bit more focused on profits and marketing. Better than almost all the other fund companies.
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Re: Vanguard or Fidelity..does it matter ?

Post by TheGreyingDuke »

After years of being exclusively at Vanguard, I have just opened an account at Fidelity to get the 50,000 frequent flyer miles on offer. So far the offerings on the site seem a bit more robust, but nothing that I cannot get elsewhere.

I am buying a Spartan Advantage bond fund, ER is the same as at VG and results look about the same, so I will let them fly me 83% of the way to China (and back) this fall
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exigent
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Re: Vanguard or Fidelity..does it matter ?

Post by exigent »

TheGreyingDuke wrote:After years of being exclusively at Vanguard, I have just opened an account at Fidelity to get the 50,000 frequent flyer miles on offer. So far the offerings on the site seem a bit more robust, but nothing that I cannot get elsewhere.

I am buying a Spartan Advantage bond fund, ER is the same as at VG and results look about the same, so I will let them fly me 83% of the way to China (and back) this fall
Details on the 50k mile offer? Was it targeted, or generally available? What was the required deposit? Which airline? Etc.
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Re: Vanguard or Fidelity..does it matter ?

Post by mackstann »

Fidelity charges a $50 closing fee on IRAs. Vanguard does not. So if you go with Fidelity, you better hope you don't change your mind. :twisted:

Vanguard is not-for-profit and runs their funds at cost, by both principle and legal structure. I like to think of them as the credit union of mutual fund companies.
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SpringMan
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Re: Vanguard or Fidelity..does it matter ?

Post by SpringMan »

Dale_G wrote:I had a 401k and non-qualified deferred comp plan at Fido for about 15 years. Never had to talk to them - everything worked the way it was supposed to. The Spartan equity funds were reasonably priced, but all of the bond funds available in the plan were about 3 times more expensive than similar funds at Vanguard.

I wouldn't use Fido for a "bond heavy" account.

Dale
Your 401K and deferred comp plan may not have had all the available choices that other Fidelity IRA and taxable accounts have. Fidelity Spartan Advantage Treasury funds have .1% ERs. They recently added a Spartan Advantage TIPS fund with a .1% ER. Also they have 30 ETFs that trade for free and all others trade for $7.95. Unless restrictions apply as in your case, Fido is not a problem for bond heavy accounts.
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Random Musings
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Re: Vanguard or Fidelity..does it matter ?

Post by Random Musings »

I prefer Vanguard. One main reason is for legacy purposes. If the accounts are already there, odds are reasonable that my benefactors will keep the money there as well.

At Vanguard, they don't have to worry about the Fidelity vultures coming in with "portfolio management" ideas where they tend to move assets with higher expense ratios (and AUM fees to boot). I've seen a bunch of those proposals, 150-225 plus basis points when it's all said and done. Plus, Fidelity has more sector funds and (on average) higher expense ratio active funds. Even though they offer all the index stuff, the culture is still active.

RM
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Re: Vanguard or Fidelity..does it matter ?

Post by gkaplan »

Another thing not frequently mentioned here is that Fidelity switches fund managers as frequently as baseball teams switch their managers.
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Re: Vanguard or Fidelity..does it matter ?

Post by Random Poster »

In my experience, Fidelity routinely slow-transfers funds and has never once accurately handled a 401K/403b rollover request.

The first time I rolled over my 401K (which was, due to employer requirements, held at Fidelity) to Vanguard, the Fidelity rep claimed to not understand the various problems that they had caused and then remarked "well, it isn't even your money anyway." :confused How are my contributions to my 401k not my money?
gpburdell
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Re: Vanguard or Fidelity..does it matter ?

Post by gpburdell »

Long time lurker and my 1st post.

I used to have both Vanguard and Fidelity. I originally had Fidelity accounts from SEP-IRA working for my parents business and the college fund they set up for me. Like many, I started using Vanguard as I wanted their low cost funds for my Roth IRA; this was over 10 years. Over the years; I found that the Vanguard website was lacking compared to Fidelity especially around tools and more importantly investment performance tracking.

Once Vanguard started offering ETFs; there was no reason I had to keep accounts with Vanguard. A couple years ago I went ahead and consolidated my accounts at Fidelity and couldn't be happier. A majority of my positions are in various Vanguard ETFs so to me I haven't lost anything to switching.

I have transferred a 401k and a couple IRAs w/o issue to Fidelity. The fact they have a couple offices where I live is nice plus even though I never had reason to go to one.

FYI, I primarily invest using ETFs and the occasional individual stock when I feel like playing. I have enough assets and new money going in that when I make a trade it's for at least a couple grand at a time so the commission is negligible. If I was just starting out and only able to do a few hundred at a time; I'd stay with Vanguard and stick to their lower minimum funds.
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Re: Vanguard or Fidelity..does it matter ?

Post by Call_Me_Op »

Fidelity has better customer service (available all of the time). Both companies have their advantages.
Last edited by Call_Me_Op on Mon Jun 18, 2012 9:10 am, edited 1 time in total.
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