Why Vanguard?

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Djtjak
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Why Vanguard?

Post by Djtjak »

Why Vanguard? It used to be pretty easy: low costs. Now everyone has low costs. I have accounts at Vanguard and Fidelity. Why not consolidate at Fidelity which seems to cater to the small investor (me) more than Vanguard. In addition the Fidelity research is far superior to that available at Vanguard.
So, what do you think?
Silverado
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Re: Why Vanguard?

Post by Silverado »

Vanguard seems to cater to my needs just fine. Automatically invests my money each month.

Why Ford, not Chevy? Why this, not that?

The real answer to your question: because I can.
CardioMD
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Re: Why Vanguard?

Post by CardioMD »

The answers are Fidelity and Toyota :D
“The stock market is a giant distraction from the business of investing.” -Jack Bogle
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TomatoTomahto
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Re: Why Vanguard?

Post by TomatoTomahto »

I have accounts at both. I prefer Vanguard’s web site, but otherwise they are very similar.

Fidelity is quicker to answer the phone, but yesterday the CSR was useless. 3 questions, none of which he could answer with anything better than “we are behind because of COVID.” It was a matter of re-titling accounts, which I did on Vanguard online in 2 days — Fidelity it’s been a week and they haven’t even begun the process.
I get the FI part but not the RE part of FIRE.
sycamore
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Re: Why Vanguard?

Post by sycamore »

Djtjak wrote: Thu Jan 21, 2021 6:08 am In addition the Fidelity research is far superior to that available at Vanguard.
So, what do you think?
Boglehead "research" is far superior to either Fidelity's or Vanguard's :)

I'm open to using any broker as I can follow good investing principles at any of them.
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dogagility
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Re: Why Vanguard?

Post by dogagility »

sycamore wrote: Thu Jan 21, 2021 6:53 am
Djtjak wrote: Thu Jan 21, 2021 6:08 am In addition the Fidelity research is far superior to that available at Vanguard.
So, what do you think?
Boglehead "research" is far superior to either Fidelity's or Vanguard's :)

I'm open to using any broker as I can follow good investing principles at any of them.
+1
Not sure what the OP means by "research" but I would ignore all "research" which attempts to market active, high cost, and/or individual stock investing.
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SmileyFace
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Re: Why Vanguard?

Post by SmileyFace »

Not sure what you mean about research tools - as others have said I don't need any. However - Fidelity’s retirement planning tool is the absolute best I have been able to find.
I used to be a huge Vanguard guy - now I prefer Fidelity and Schwab. No reason to go Vanguard any longer.
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Brianmcg321
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Re: Why Vanguard?

Post by Brianmcg321 »

I always lol at brokerages “research”.

All that money spent on research to say they know nuthin.
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Tamarind
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Re: Why Vanguard?

Post by Tamarind »

Because when I started investing they were absolutely the cheapest, and it's hard for Fidelity to pull my business to them by being "as cheap". No incentive there to spend the time. I haven't yet had any trouble doing anything I needed to through the website or with phone support. I happily work with other providers for things Vanguard doesn't offer, like HSAs.

For someone just starting out today Fidelity seems like an equally fine choice of custodian.

All the research that's interesting seems to show up here regardless of who did it. :)
rab
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Re: Why Vanguard?

Post by rab »

OP, you are correct that for many years the primary appeal of Vanguard was lower costs, but today many other companies (e.g. Fidelity, Schwab) have similarly lower costs.

However, another distinguishing feature of Vanguard is it ownership structure where the ultimate owners of the company are the shareholders of their mutual funds. My hope is that this ownership structure will make Vanguard more focused on serving their fund shareholders and is my main reason for staying with Vanguard.
chiliagon
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Re: Why Vanguard?

Post by chiliagon »

Fidelity, Schwab, and Vanguard are all fine with me, and I have used all three in the past and never had a problem with any of them. Right now, I use Fidelity and Vanguard. I'm not sure it's rational, but I trust Vanguard a little more than I trust either Fidelity or Schwab. It's probably due to the history of Vanguard: if Bogle founded Vanguard, and if Bogle had ordinary investors' best interests in mind in founding Vanguard, then I presume that spirit is still present in the company, at least in some form.

I know people on Bogleheads complain a lot about phone calls with Vanguard, but I have never had a problem in that regard. To be clear, Fidelity and Schwab have always been fine on the phone too.
MishkaWorries
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Re: Why Vanguard?

Post by MishkaWorries »

I think all the discount brokers are interchangeable. Therefore when deciding which broker so to use then you need a tiebreaker. In our case it was Schwab's bank with their excellent ATM card that reimburses ATM fees anywhere in the world.

Use Vanguard if you want access to their mutual funds. We also use Vanguard because my wife loves Wellesley.

Fidelity has a 2% cash back card.

Etc etc etc
We plan. G-d laughs.
mhalley
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Re: Why Vanguard?

Post by mhalley »

I don’t think vanguard has the huge lead that it used to have. The main advantage now is that they don’t have overpriced products that you might be talked int once you are older and not quite as sharp, or if you pass your spouse might be persuaded to use. The worst you can get is the 0.3% pas, where fidelity and Schwab have some products that are much higher. Additionally, I think fidelity and Schwab have better banking type features. Overall, I would rate vanguard #3 behind Schwab and fidelity but have no reservations recommending all 3.
acegolfer
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Re: Why Vanguard?

Post by acegolfer »

Djtjak wrote: Thu Jan 21, 2021 6:08 am Why Vanguard? It used to be pretty easy: low costs. Now everyone has low costs. I have accounts at Vanguard and Fidelity. Why not consolidate at Fidelity which seems to cater to the small investor (me) more than Vanguard. In addition the Fidelity research is far superior to that available at Vanguard.
So, what do you think?
I noticed a general trend in this forum moving from Vanguard to Fidelity. If I start today, I'd use Fido.
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JoMoney
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Re: Why Vanguard?

Post by JoMoney »

I prefer Vanguard and feel like the structure and culture of the company (at least in the past) is more likely to be closer aligned to my preferences and keeping costs low. If I was in a taxable account where making decisions to sell and move assets somewhere else might create a taxable event that's where I'd still be. Although, I will concede feeling like it's lost a bit of something since we've lost Mr. Bogle, he hasn't been at the helm for a long time, but it was "The House That Jack Built". Vanguard has done a series of things that I haven't really cared for, like the push into brokerage accounts, and dropping the "Portfolio Characteristics" data they had included in every fund annual report filing for 20 years, and oddly stopped as soon as Jack passed.
As it is, all my equities are now in tax-deferred accounts, my cash is earning better yields outside of a brokerage account, and Fidelity offers the best (lowest cost while tracking the index directly comparable to Vanguard's) S&P 500 index fund. So that's where I'm at. A big chunk of the money I have at Fidelity was influenced by my former company 401k being with them, and it was very convenient to roll over directly to Fidelity IRA(s). I also like the Fidelity CMA account, and Fidelity Rewards Visa credit card. So I'm no longer at Vanguard, and predominately with Fidelity in their lower cost fund tracking the same index I'd be in at Vanguard.
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sport
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Re: Why Vanguard?

Post by sport »

mhalley wrote: Thu Jan 21, 2021 9:00 am I don’t think vanguard has the huge lead that it used to have. The main advantage now is that they don’t have overpriced products that you might be talked int once you are older and not quite as sharp, or if you pass your spouse might be persuaded to use. The worst you can get is the 0.3% pas, where fidelity and Schwab have some products that are much higher.
This is very important. Younger people usually don't think about such things. However, we all age and there will come a time when this could make a very big difference for you or your heirs. In short, I believe that Vanguard can be trusted to not take advantage of me or my family.
aristotelian
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Re: Why Vanguard?

Post by aristotelian »

I view them kind of like Apple. There's probably a better alternative out there if you're willing to search for it, but they are the most trusted name in the business and you know you are getting a great product.
Jim Beaux
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Re: Why Vanguard?

Post by Jim Beaux »

I believe this is 2 years ago

Consumer Reports

Investment Company Guide

For "customer service", "personal advice", "account setup", "met goals"

#1 Edelman Financial Services, (a traditional investment firm), with an overall satisfaction score of 92

#2 VG with an overall satisfaction score of 92

#7 VPAS with an overall satisfaction score of 87

#19 Fidelity with an overall satisfaction score of 85


For "fee transparency", "investment returns", "fee amounts", "online resource advice" , there are only two.

VG #1 with an overall satisfaction score of 92

Wealthfront #2 with an overall satisfaction score of #85


Subscribers

https://www.consumerreports.org/cro/inv ... /index.htm
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mokaThought
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Re: Why Vanguard?

Post by mokaThought »

Twenty threads in the past three months could have been named, "Why, Vanguard?"
I gave in and went SCV. Wish me luck.
Dave55
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Re: Why Vanguard?

Post by Dave55 »

I have used Fidelity, Schwab and Vanguard. I was totally satisfied with all 3.

Dave
byline0802
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Re: Why Vanguard?

Post by byline0802 »

I'm happy at Vanguard so I haven't seen a major reason to move. Furthermore, I like knowing that in some way that Vanguard's profits are helping me as a shareholder, rather than if I was at Fidelity, then they'd be making the billionaire Johnsons even richer.
Faith20879
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Re: Why Vanguard?

Post by Faith20879 »

Why Vanguard?

Three reasons:

1. Yes they have made a few mistakes over the years but nothing yet to tip the scale.

2. All brokerages are not perfect. For example, TR Price's CS has a stellar reputation. When I called my plan's (TRP) hotline to inquire about in-kind rollover to IRA, I was bounced around 4 times before suddenly cutoff while on hold. This happened during peace time, pre-pandemic. So it wasn't like they were overloaded. I blamed it on my own speech impairment.

3. Vanguard never nickle-and-dimed me. I started my MF education with Fidelity. Before I could make heads or tails out, dot com bubble burst. I was like a deer caught in headlights, totally frozen and didn't know what to do. As if watching my hard earned money fast disappearing in front my eyes wasn't bad enough, Fidelity started charging me a recurring inactive fee. It left a very bad taste. I may not be smart but I remember - just like an elephant.
usagi
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Re: Why Vanguard?

Post by usagi »

Djtjak wrote: Thu Jan 21, 2021 6:08 am Why Vanguard? It used to be pretty easy: low costs. Now everyone has low costs. I have accounts at Vanguard and Fidelity. Why not consolidate at Fidelity which seems to cater to the small investor (me) more than Vanguard. In addition the Fidelity research is far superior to that available at Vanguard.
So, what do you think?
I was raised Catholic and schooled by Dominican Nuns. Money was taught as something that was dirty and they frequently quoted Matthew 19:24 - And again I say unto you, It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God. Hence I believe in penance. I view Vanguard's customer service as my punishment for having amassed wealth, sort of my personal purgatory.

I'll give you an example of the difference. My Fidelity advisor reached out to me this week, saying according to my plan it is time to retire. He wanted to set a series of appointments to review my taxable holdings and develop a tax strategy for me by examining my taxable long term capital gains and my tax deferred holdings that will be subject to RMDs and SS in order to make productive use of the years I have between retiring now and turning 72. We have set a couple of appointments. The first will be discovery, and then he will wander off, develop a strategy and run it by some tax specialists, then an appointment to review it with my finance team, and then final planning session before having a presentation for me.

I appreciate that Fidelity is looking ahead to possible tax code changes and measuring the impact they may have on their clients portfolio. My Fido advisor knows I have significant individual stock positions. He also knows the initial plan was to pass them onto heirs for the stepped up cost basis, however that may no longer optimal in the future and that is the motivation for these meetings. To see what I have and figure out an overall strategy that makes sense in terms of existing tax law and upcoming changes that may occur.

So I have roughly the same amount of money at both Fido and Vanguard. The differentiation in service is like light and day. Fidelity proactively reviews my holdings and makes helpful suggestions, Vanguard won't even answer the phone when I call them.
Last edited by usagi on Thu Jan 21, 2021 11:11 pm, edited 1 time in total.
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Nate79
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Re: Why Vanguard?

Post by Nate79 »

There is no reason to use Vanguard. Better options out there like Schwab and Fidelity. We prefer Schwab. Oh, and the whole ownership structure blah blah about Vanguard is a load of you know what.
Bama12
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Re: Why Vanguard?

Post by Bama12 »

Why not Vanguard?

I use my local credit union for banking and Vanguard for investing.
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Gattamelata
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Re: Why Vanguard?

Post by Gattamelata »

I imagine that if Vanguard disappeared tomorrow, management fees at Fidelity would increase the day after. I'd rather stick with the institution that is committed to individual-friendly fee structures over the institution that grudgingly offered them after getting clobbered.

Incidentally, one of my work retirement accounts is through Fidelity, and the web interface is clunkier and uglier than anything I can remember having used from Vanguard (which is saying quite a lot). It's a nightmare to use and every time I have to puzzle through their terrible user interface. I suspect that my employer represents a captive audience to them and Fidelity sees no need to upgrade the wretched portal (or they fired the interns who built it 20 years ago and can't find anybody willing to adopt the thing). It's a small, infrequent reminder to me that Fidelity doesn't care about me unless it feels that appearing to care is the only way to keep my business.

I guess at the end of the day I believe in the model of owner-members.
Marseille07
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Re: Why Vanguard?

Post by Marseille07 »

I used to have an account with Vanguard but they changed plans and sent me some nastygram saying they've been offering a Flagship status for the amount I had in the account, and that I had to deposit more monies to keep the status. That's when I said no thanks and left them forever.
L82GAME
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Re: Why Vanguard?

Post by L82GAME »

sport wrote: Thu Jan 21, 2021 10:18 am
mhalley wrote: Thu Jan 21, 2021 9:00 am I don’t think vanguard has the huge lead that it used to have. The main advantage now is that they don’t have overpriced products that you might be talked int once you are older and not quite as sharp, or if you pass your spouse might be persuaded to use. The worst you can get is the 0.3% pas, where fidelity and Schwab have some products that are much higher.
This is very important. Younger people usually don't think about such things. However, we all age and there will come a time when this could make a very big difference for you or your heirs. In short, I believe that Vanguard can be trusted to not take advantage of me or my family.
Agreed. I use all three firms, but still prefer VG. Specifically, we have an UTMA for our daughter at Schwab, and a CMA at Fido per their 2% rebate CC. All non-employer retirement assets are with VG, including our taxable brokerage account.

Fwiw, Schwab has the best site. I think Fido’s site is a clunky hodgepodge of legacy designs and is overrated by others on this forum. VG’s site isn’t slick, but it gets the job done efficiently.

With all of that having been said, I have witnessed by way of family and friends that the possibility of having a BH portfolio destroyed by both Schwab and Fido is real. I am unimpressed by Schwab’s robo advisor portfolio approach (e.g., 5% cash reserves bilking and unnecessary complexity) as well as with their advisory services at least via our local branch, and Fido’s Wealth Management Services seems no better than Raymond James or Edward Jones (i.e., shamefully hubristic). Nonetheless, you can do very well for yourself at all three using a self-managed BH approach.

However, what I worry about is if I’m struck by a bus, and my wife needs help, at the moment I’m confident no harm will be done by VG. Ymmv, but in my experience, there’s a real possibility of harm being done by others through high fees and complex constructions that are not effective.
“Simplicity is the ultimate sophistication.” - Lao Tzu
megabad
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Re: Why Vanguard?

Post by megabad »

Since I don’t think it has been mentioned except by rab: one possible reason is Vanguards corporate structure which is completely different from any other major brokerage.

Full disclosure: I use vanguard and fidelity and like both.
Last edited by megabad on Fri Jan 22, 2021 3:21 am, edited 1 time in total.
MathIsMyWayr
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Re: Why Vanguard?

Post by MathIsMyWayr »

rab wrote: Thu Jan 21, 2021 7:47 am OP, you are correct that for many years the primary appeal of Vanguard was lower costs, but today many other companies (e.g. Fidelity, Schwab) have similarly lower costs.

However, another distinguishing feature of Vanguard is it ownership structure where the ultimate owners of the company are the shareholders of their mutual funds. My hope is that this ownership structure will make Vanguard more focused on serving their fund shareholders and is my main reason for staying with Vanguard.
I have accounts both at Vanguard and Fidelity. Fidelity holds employer-based accounts (401(k), RSU, and ESPP). I like Fidelity having local offices close to where I live. I want to and do like Vanguard. However, I am not sure how I benefit from Vanguard's ownership structure.
AlohaJoe
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Re: Why Vanguard?

Post by AlohaJoe »

mhalley wrote: Thu Jan 21, 2021 9:00 am The main advantage now is that they don’t have overpriced products that you might be talked int once you are older and not quite as sharp, or if you pass your spouse might be persuaded to use. The worst you can get is the 0.3% pas,
Uh.... What about the:

Vanguard Capital Opportunity Fund with a 0.44% ER?

Vanguard Selected Value Fund at 0.33

Vanguard Global Credit Bond Fund at 0.35

Vanguard Global Capital Cycles Fund at 0.38

Vanguard Emerging Markets Select Stock Fund at 0.93% ER

I don't know why people pretend Vanguard only offers passive index funds with ERs under 0.10%.

Vanguard could tell you to invest in the Vanguard Market Neutral Fund, which has an ER of 1.46%.
megabad
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Re: Why Vanguard?

Post by megabad »

MathIsMyWayr wrote: Fri Jan 22, 2021 3:12 am I am not sure how I benefit from Vanguard's ownership structure.
Basically, every alternative low cost option listed as better than Vanguard in this thread would not have existed if not for Vanguard, Bogle, and Vanguards ownership structure. That’s how you benefitted.
dboeger1
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Re: Why Vanguard?

Post by dboeger1 »

I don't actually know what the experience is buying VG mutual funds with Fido, but having stupidly paid fees for starting out with and then transferring from Scottrade when I first started out and didn't know what I was doing, I pretty much decided to just stick with buying mutual funds through the corresponding company, in this case VG through VG. Since I'm pretty much 100% VTWAX and others don't seem to have equivalent funds, I stick with VG for now.

I know I can buy VT, the ETF version, through others for free, or slice and dice using separate US/ex-US funds, but I really have had a much better experience sticking with VTWAX, so until that changes or a competitor creates a similar fund, I don't see myself moving.

One thing that I suspect may be likely to change that in the coming years would be if VG decides to convert all MF share classes to ETFs, either through force or with strong "encouragement" via significantly divergent expense ratios. I'm presumably already paying a small premium for VTWAX over VT, so if that gap widens, I may end up just converting to VT and then transferring to Fido. It seems the vast majority of employers in my industry and region use Fido, so the consolidation would be beneficial.
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William Million
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Re: Why Vanguard?

Post by William Million »

Vanguard worth it for fixed income funds. No other firm beats 'em in range and cost.

However, Vanguard worst of lot as broker, for customer service. Interface a joke. For that reason, a Vanguard account for fixed income and another firm like Fidelity, Ally, Merrill Edge, etc for stock ETFs (or stocks), IRAs makes complete sense.
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William Million
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Re: Why Vanguard?

Post by William Million »

megabad wrote: Fri Jan 22, 2021 3:23 am
MathIsMyWayr wrote: Fri Jan 22, 2021 3:12 am I am not sure how I benefit from Vanguard's ownership structure.
Basically, every alternative low cost option listed as better than Vanguard in this thread would not have existed if not for Vanguard, Bogle, and Vanguards ownership structure. That’s how you benefitted.
Emphasis on past tense. In other words, no reason to stick with Vanguard now due to its historic role in driving down fees during the Bogle era.
megabad
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Re: Why Vanguard?

Post by megabad »

William Million wrote: Fri Jan 22, 2021 4:42 am
megabad wrote: Fri Jan 22, 2021 3:23 am
MathIsMyWayr wrote: Fri Jan 22, 2021 3:12 am I am not sure how I benefit from Vanguard's ownership structure.
Basically, every alternative low cost option listed as better than Vanguard in this thread would not have existed if not for Vanguard, Bogle, and Vanguards ownership structure. That’s how you benefitted.
Emphasis on past tense. In other words, no reason to stick with Vanguard now due to its historic role in driving down fees during the Bogle era.
Your logic is one of short term simple characteristics. Mine is one of fundamentals. They are totally different. What you are saying is “fundamentals and principles don’t matter so you should just go with whatever is cheapest today”. You may be right (I hope you are not), but I am simply stating that if fundamentals do matter, Vanguard is fundamentally different from its “competitors”. If principles and fundamentals don’t matter over the long term I am scared for the economy and world as a whole...but this doesn’t mean that I believe that Vanguard is universally the best choice for everything today.
snowox
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Re: Why Vanguard?

Post by snowox »

I am another one that likes Vanguard and finds it easy to use there tools etc.. I have not had issues with phone calls and in fact find them to be very easy and no pushy. So for me it would be Vanguard and Toyota. :sharebeer
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markjk
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Re: Why Vanguard?

Post by markjk »

Djtjak wrote: Thu Jan 21, 2021 6:08 am Why Vanguard? It used to be pretty easy: low costs. Now everyone has low costs. I have accounts at Vanguard and Fidelity. Why not consolidate at Fidelity which seems to cater to the small investor (me) more than Vanguard. In addition the Fidelity research is far superior to that available at Vanguard.
So, what do you think?
It's interesting. I see debates like this on here all the time. I have accounts at both Vanguard and Fidelity as well. I think they are both fine. One thing to consider is both are constantly looking to improve product offerings, services, capabilities, costs etc. So, whomever is best today may not be best tomorrow. They will continue to one-up each other over time. That is what competition does and we the consumers are ultimately the winners in the end. So, I hope they continue pushing the bar which in turn keeps this debate going.

The biggest difference I see is Vanguard's structure. Fidelity has private "owners" and those owners are profit driven. Vanguard's owners are those of us that own Funds/ETF. There is no private owner or Wall Street profit influence. That could make a difference long term. It made a huge difference over the past few decades as that structure helped Vanguard become the industry disrupter and offer lower cost funds. Now Fidelity and others have similar funds to compete. But, will that last over time? Will those companies raise costs or do something in the future to increase profits? It's hard to say for certain but after they gain enough market share, I'm personally assuming they will.

Both are fine. I think the debate as others pointed out are sort of like car brand debates. Pick one you like and go with it.
bogledogle87
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Re: Why Vanguard?

Post by bogledogle87 »

For me, I compare today's brokers like hardware stores. Do you prefer getting your lumber from Lowe's or Home Depot? If you need a 5 gallon bucket, do you like the blue or the orange one? For the most part it comes down to preferences. Personally, I like the customer experience at Home Depot a little bit better, so I mostly go there, but sometimes Lowes has the product that I need.

Same with Vanguard and Fidelity for me. My anchor is with Vanguard because I primarily use VTWAX and prefer it in mutual fund form over VT, however Fidelity offers me some great products with their 529 and HSA accounts. If Fidelity ever offered a competitive Total World fund, I would might consider total switch, but even then it would come down to comparing the blue and orange buckets.
VTWAX and chill
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Re: Why Vanguard?

Post by z3r0c00l »

Djtjak wrote: Thu Jan 21, 2021 6:08 am Why Vanguard? It used to be pretty easy: low costs. Now everyone has low costs. I have accounts at Vanguard and Fidelity. Why not consolidate at Fidelity which seems to cater to the small investor (me) more than Vanguard. In addition the Fidelity research is far superior to that available at Vanguard.
So, what do you think?
I joined in 2007 due to lower costs, now I stay out of sheer momentum. It works just fine for me and my investing is very simple (two mutual funds, 8 dividends a year that get reinvested) so why bother moving?
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nisiprius
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Re: Why Vanguard?

Post by nisiprius »

This isn't the "Vanguardheads" forum. Vanguard-the-brokerage is nothing special and never has been. Vanguard-branded index funds, both mutual funds and ETFs are nothing special any more.

Advertisers e.g. of batteries are fond of claims of the form "nothing is better than [our product]." That means "we can't prove we're better than the competition, but we don't think the competition can't prove they're better than us." In that sense:

Assertion number 1: No index funds are better than Vanguard's. (Or Fidelity's. Or iShares, or... )

Assertion number 2: If your investment life is like mine, and if your holdings are exclusively or predominantly a) Vanguard b) index funds, then no brokerage or firm is better than Vanguard. If you care about quality of execution of ETF trades, or technical analysis trading tools, or having a friendly smartphone app for new investors to get started trading options, then there are probably better firms.

Assertion number 3: Within the last couple of years I've had to contact Vanguard two or three times regarding RMD-related questions, and they picked up the phone quickly enough and took care of things competently. I can't speak to the postings on the forum about "bad Vanguard customer service." In the last twenty years or so I've had occasional infuriating experiences with issues at Fidelity, at Schwab, at Vanguard, and at TIAA-CREF. I have no idea whether Vanguard's customer service is slipping. Or whether brokerage customer service in general might be slipping because of, you know, the pandemic. I haven't personally experienced any problems recently at Vanguard. Nothing Vanguard has done has yet been bad enough to make me jump ship. If they ever do, I will.

Assertion number 4: I am mostly interested in Vanguard mutual funds, and I find that Vanguard's website is good at presenting information about Vanguard funds. Better than Fidelity's website is at presenting data about Fidelity's own funds, and better than Schwab is at presenting data about Schwab's own funds. Of course, you don't need to have an account at any of these firms to use their websites.

Assertion number 5: If, for whatever reason, you have the bulk of your investments in Brand X index funds and ETFs, in many small ways you will find it smoother sailing to have your account at Brokerage X.

For me, it all comes down to just stupid stuff. Brand loyalty and, as I write this, I still can say I like the cut of Vanguard's jib. They strike me as generally sensible, honest, and straightforward. I like the firm. I don't love it, but I do like it. Completely subjective.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
DocInColo
Posts: 90
Joined: Tue Aug 11, 2020 9:20 pm

Re: Why Vanguard?

Post by DocInColo »

The only advantage I see to Vanguard these days is if you use their funds. They have - by far - the worst customer service and tech/website of the big discount brokerages. A lot of people will tell you that's not important because they hardly ever log on or call Vanguard, etc. but just wait until they mess something up and you have to spend 45 minutes on hold to get someone who doesn't know what they're doing...

I think the only reason a lot of people stay (including myself) is pure inertia. I don't particularly like Vanguard, but they haven't messed anything major up, and I don't want to go through the hassle of transferring accounts. If I could do it all over, I would have started with Vanguard ETFs and gone with Schwab or Fidelity.
atdharris
Posts: 706
Joined: Wed Jan 02, 2019 3:18 pm

Re: Why Vanguard?

Post by atdharris »

Now that nearly all brokerages offer free trades, there is no reason to use Vanguard. I'm perfectly happy with Bank of America/Merrill, and through them I get all kinds of perks I could not get if I had all my accounts at Vanguard.
DrivingFun
Posts: 258
Joined: Wed Sep 19, 2007 6:12 pm

Re: Why Vanguard?

Post by DrivingFun »

For my purposes of doing nothing more than Total Stock/Total International, anything would work. I'm at Vanguard because I'm already there and it's a beast I know. There is almost no upside for me to go somewhere else.
260chrisb
Posts: 712
Joined: Wed Apr 28, 2010 7:26 pm

Re: Why Vanguard?

Post by 260chrisb »

Djtjak wrote: Thu Jan 21, 2021 6:08 am Why Vanguard? It used to be pretty easy: low costs. Now everyone has low costs. I have accounts at Vanguard and Fidelity. Why not consolidate at Fidelity which seems to cater to the small investor (me) more than Vanguard. In addition the Fidelity research is far superior to that available at Vanguard.
So, what do you think?
Seems to me you've answered your own question. I don't know that I have ever gone to Vanguard for research or even need to but more for information but we may invest differently. I started my personal investment journey with Vanguard over 15 years ago, had a lot of respect for John Bogle years prior to that, and for me they've always filled my needs and I've never looked for or had a reason to ever consider looking elsewhere. That's why for me. I'm sure Fidelity is fine and sure they will work for you.
jhsu802701
Posts: 297
Joined: Fri Apr 03, 2020 2:42 pm

Re: Why Vanguard?

Post by jhsu802701 »

For money market funds, Vanguard is the best because of the low expense ratios. While everyone's yields are roughly equally pathetic right now, you'll see the difference when the Fed raises interest rates again, and the more expensive funds stop the subsidies. In the money market world, there are no jackpots. There's a nearly perfect inverse relationship between yield and expense ratio. There are no jackpots to be found.

While I don't like bonds, I'd pick Vanguard over everyone else for bond funds. Given bonds of similar durations and credit quality, there's not that much yield difference between one security and another. Again, there's a nearly perfect inverse relationship between yield and expense ratio. There are no jackpots to be found.

For brokerage services, I prefer Vanguard over everyone else. Given that Vanguard has gone commission-free, I see no reason to go elsewhere. The edge that Vanguard has over everyone else is the automatic sweep to the Vanguard Federal money market fund for uninvested cash. While everyone's automatic sweep yields are roughly equally pathetic right now, that will change when the Fed raises interest rates again.

Stock funds (especially ETFs) are the area where I deviate from Vanguard. There are so many different flavors of stock funds. No one company covers them all. And Vanguard's edge means less in the ETF world than in the mutual fund world, because the average ETF has a much lower expense ratio than the average mutual fund.

While Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares (VSS) is a good small cap international stock fund, there are others that I like better. DGS, GWX, and FNDC offer diversified small cap international stocks with lower price/book ratios. Other non-Vanguard funds offer funds that Vanguard doesn't offer at all. DFJ is an all-Japan fund. MOTI specializes in international moat stocks (and still has a lower price/book ratio than VSS). DGRE specializes in emerging market dividend growth stocks. IQIN invests in large cap developed market stocks.
DFJ: Japan - small cap dividend | DGS: emerging, small cap dividend | MOTI: international moat stocks | IQIN: large cap, developed | DGRE: emerging, dividend growth | GWX and FNDC: small cap, developed
Broken Man 1999
Posts: 5841
Joined: Wed Apr 08, 2015 11:31 am
Location: West coast of Florida, inland on high ground!

Re: Why Vanguard?

Post by Broken Man 1999 »

Jim Beaux wrote: Thu Jan 21, 2021 12:04 pm I believe this is 2 years ago

Consumer Reports

Investment Company Guide

For "customer service", "personal advice", "account setup", "met goals"

#1 Edelman Financial Services, (a traditional investment firm), with an overall satisfaction score of 92

#2 VG with an overall satisfaction score of 92

#7 VPAS with an overall satisfaction score of 87

#19 Fidelity with an overall satisfaction score of 85


For "fee transparency", "investment returns", "fee amounts", "online resource advice" , there are only two.

VG #1 with an overall satisfaction score of 92

Wealthfront #2 with an overall satisfaction score of #85


Subscribers

https://www.consumerreports.org/cro/inv ... /index.htm
I recently signed up again with CR to get some ratings of another product. I noticed the info you have posted.

Unlike the anecdotal info that is expressed in discussions here daily, the CR study involved:

Our findings were based on a survey of more than 46,000 Consumer Reports members about the experiences investors had with the investment companies they use.

Those 46,000 replies paint a more useful picture than the service issues discussions here, IMHO. Note, I am NOT saying service issues are not experienced, just saying making investment company decisions based on what you read here probably isn't the best way to make the decision.

Bogleheads are unlikely to accept a suggestion about anecdotal results for deciding how one should invest their money, instead they ask for the reason a suggestion might be appropriate, facts, figures, when, how.

When determining the level of service any one investment company might provide, I don't think that anecdotal info should be given any more weight than a stranger suggesting a investment solution without any evidence to support the recommendation.

To my knowledge no one has posted any metrics about answer times, percentage of mistakes made, etc. that would be useful in drawing a better conclusion about service.

Of course those in that 46,000 group of investors are just giving anecdotal info as well, but the anecdotal info at least was being provided across many investment companies.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go. " -Mark Twain
Nebraska_Drought
Posts: 38
Joined: Fri Nov 13, 2020 11:19 am

Re: Why Vanguard?

Post by Nebraska_Drought »

I landed at Vanguard after being with the likes of Invesco and American Funds. It was like getting hit upside of the head when I looked at what I was paying in fees prior. Vanguard set the pace and others had to follow. In the end, others may offer more bells and whistles, but you are going to be paying for it....somewhere/somehow. Every 401K rollover I have had went to Vanguard. My Roth IRA's are with Vanguard and when the time comes, I plan on moving all retirement funds to Vanguard and setting it up in a simple fashion in which my wife and I am both comfortable overseeing, regardless of our capacities. I just set my son up (19) with a Vanguard account and got him started too. In the 25+ years I have been with Vanguard, I have only needed assistance a handful of time and they took care of it then. To me, the website interface is easy to use and I can do what I need to.
Trader Joe
Posts: 2177
Joined: Fri Apr 25, 2014 6:38 pm

Re: Why Vanguard?

Post by Trader Joe »

Djtjak wrote: Thu Jan 21, 2021 6:08 am Why Vanguard? It used to be pretty easy: low costs. Now everyone has low costs. I have accounts at Vanguard and Fidelity. Why not consolidate at Fidelity which seems to cater to the small investor (me) more than Vanguard. In addition the Fidelity research is far superior to that available at Vanguard.
So, what do you think?
This is a great question. No reason really.
CRJPylote
Posts: 37
Joined: Sun Sep 27, 2020 7:14 pm

Re: Why Vanguard?

Post by CRJPylote »

My father is along time customer of them so that's how I got started. I have accounts there and at Schwab(401K and a second IRA) and Schwab isn't any better for what I do.

That said Vanguard doesn't seem to cater to people wanting to "dip their toe in" with rather high minimums for most accounts vs Fidelity or Schwab so I've recommended people go elsewhere if they are young and just starting so it's easier to start contributing. I think that's a bad business strategy for Vanguard to not try to capture those customers, but who knows, maybe they see a benefit from only going after more established investors.
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