Fidelity vs. Vanguard

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Dave C.
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Fidelity vs. Vanguard

Post by Dave C. » Thu May 22, 2014 4:32 pm

I thought Vanguard....but now I'm thinking Fidelity.

I retired May 1st this year and pretty much expected to consolidate my holdings with Vanguard. I have about $500k tax sheltered money with Vanguard, I have always admired Vanguard and I am a life-long self-directed Boglehead type investor.
I have about 1M at Fidelity (my employer used Fidelity).

But here is the issue....the folks at Fidelity are plying me with loads of services, while Vanguard sent me one email asking me to call them to discuss retirement financials.
Fidelity has:
1. Met with me discuss retirement spending, etc.
2. Provided me with ideas to organize retirement income
3. Discussed my need to create a spending reserve, along with a cash-equivalent reserve
4. Created for me a summary retirement income from all sources for a bird's-eye view of income and expense analysis

I realize much of this is boil plate type information that a good program will spit out if you fill in the blanks. But the Fidelity folks took the time to ask the questions, fill in the blanks and hand me the plan. They gave me no recommendations on changing funds or my AA and tried to sell me nothing.

I gave Vanguard the same heads-up on my retirement that I gave Fidelity but the response was much different.

Do any of you folks have a preference between the two groups?
Does it surprise anyone that Fidelity was so much more responsive?
Maybe it's because Fidelity has had 70% of my money for the last 25-years?

I'm actually thinking about moving the Vanguard balances to Fidelity now. :shock:
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Index Fan
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Re: Fidelity vs. Vanguard

Post by Index Fan » Thu May 22, 2014 4:40 pm

It's not surprising at all. Vanguard is shareholder-owned and more for cost-conscious DIY investors. Fidelity is a for-profit enterprise that offers all sorts of help and products to those it makes money off of- and unless you go out of your way to stick with their Spartan index funds, you'll pay them more for the privilege of investing with them. Fidelity makes good profits doing what they do, keep an eye on the expense ratios you pay.

Different strokes for different folks. I prefer the DIY cost-conscious approach.
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SpringMan
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Re: Fidelity vs. Vanguard

Post by SpringMan » Thu May 22, 2014 4:54 pm

I was in a similar situation when I retired. I moved enough money to Vanguard to obtain Flagship client status and left the remaining at Fidelity. I broke it up such that Vanguard had all our tax deferred IRAs so RMDs will be simpler when I turn 70.5. Fidelity has our Roth IRAs and a joint taxable account. Fidelity did a retirement analysis prior to my decision. They spent several hours on the phone with us. I appreciated their effort but their final recommendations consisted of Fidelity and Fidelity NTF funds that were actively managed and higher fees than anything Vanguard offers. For the record, I really don't have anything against active management if the fees are low and am a proponent of many Vanguard actively managed funds.
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Re: Fidelity vs. Vanguard

Post by placeholder » Thu May 22, 2014 5:16 pm

I have used a number of brokerages because I don't need any services other than being able to buy/sell what I need so I go where it is financially advantageous which these days mainly means who's coming up with bonuses.

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Re: Fidelity vs. Vanguard

Post by livesoft » Thu May 22, 2014 5:24 pm

I have a Fidelity 401(k) and also accounts at other places including Vanguard. I have not been in the local Fidelity office, but I might go one day.

Fidelity has the Guided Portfolio Summary software tool, the Retirement Income Planner software tool, and the Income Strategy Planner software tool all available online. Whenever I use them online, I get an e-mail a few days later asking me if I have any questions about them. I can see where a face-to-face sitdown with a Fido rep to explain what these tools are telling one would be useful.

However, I know folks who ended up paying Fidelity to manage their assets and that was pretty bad. So if one can resist the sales pitches and just use the Spartan Advantage index funds and perhaps some index ETFs, then Fidelity is a fine place to keep one's portfolio.

There is also nothing wrong with using more than one vendor.
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Re: Fidelity vs. Vanguard

Post by Jack FFR1846 » Thu May 22, 2014 5:28 pm

I like the Vanguard model and would expect that it would provide lower costs to me. I'd really like to move my money over there and do comparisons fairly often on fees for funds and ETFs that I'd have interest in. While some of the Vanguard funds have lower ERs and I have seen some drop even further, when I evaluate them against Fidelity, they are a wash for my portfolio.

What I like about Fidelity is that online transactions are simple. Also, I can do just about everything online including moving funds from other institutions (which I've done a lot lately). As an example, moving an IRA from another institution involved sitting on my couch and making an online account at the other institution so I could download a PDF of my latest statement. Then I put the information about the funds into an online Fidelity form. Then I printed the signature pages of the form, signed them, placed them into my scanner to make a pdf, then took the fidelity form pdf, the statement, the scanned signature pdf and uploaded them into the page to transfer funds in. I hit return and a week or 2 later, the funds were moved to my fidelity account. I didn't leave my house. I didn't talk with anyone on the phone. I didn't have to go to the post office. I can't do that with Vanguard and it was THE reason that I opened this particular new account with fidelity (I have others already there).

I also can call them 24/7. I have called them on a Sunday night. I go on their online chat to ask questions all the time. I don't get sold on anything because although I'm some kind of grand pubah member (private client?), I have no need to talk with anyone, although I could walk in and speak with someone who is assigned to me.

I think they are both great companies. To me, the difference is that Vanguard is a good 1990's company and Fidelity is a good 2014 company.
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Re: Fidelity vs. Vanguard

Post by xzhou » Thu May 22, 2014 5:53 pm

We have money at both places. Started at Fidelity because of workplace 401(k), but opened Vanguard account for their international funds. FSTVX and FSEVX at Fidelity are very competitively priced, but VEMAX and VTIAX are lower cost for sure. VCAIX is also a good place for Californians. Regarding customer service, I have the highest praise for Fidelity folks, although their knowledge of backdoor Roth conversion is less stellar than what I read here in this forum. (Thanks folks!)

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Re: Fidelity vs. Vanguard

Post by Kevin M » Thu May 22, 2014 6:05 pm

Similar situation here. When I retired seven years ago, it was super easy to transfer 401k, pension and severance into a Fidelity IRA (since company used Fidelity for 401k). About 3/4 of the IRA has now been transferred to other institutions, including Vanguard, but also some banks and credit unions for CDs. On the other hand, I now have a decent sized taxable account there due to some tax loss harvesting out of Vanguard funds.

As already mentioned, Fidelity can afford the extra service due to much higher fees they charge for most of their funds. The local office is nice, but I'd rather not pay for it.

I've spoken with my "private client representatives" a few times in the past. They didn't agree with me that low-cost index funds were superior to higher cost, actively managed funds. But as others have said, you don't have to take their advice, and don't even have to talk to them.

I do think Fidelity's online features generally are superior. They have tracked individual tax lots in taxable accounts since I started with them, which was before the new basis reporting regulations pretty much forced Vanguard into it.

I like Vanguard's broader selection of low cost index funds, but Fidelity's Spartan funds and the no-commission iShares ETFs get much of the job done at a competetive price.

If I had to choose one company it would be Vanguard, since their interests are more aligned with mine. But I don't have to choose so I use both, as well as other financial institutions.

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Re: Fidelity vs. Vanguard

Post by bottlecap » Thu May 22, 2014 6:10 pm

Both provide great service, just tailored to different customers. I like Vanguard because of better indexing options, but with enough invested with them, they will also provide you with a CFP at no charge.

Fidelity may not have tried to sell you anything, but make no mistake, they are hoping you bring money in an invest in their active funds at some point. Most people probably do, chasing returns. If they didn't, Fidelity wouldn't be able to provide you all those services. That doesn't make Fidelity bad, they just have a different model than Vanguard.

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Re: Fidelity vs. Vanguard

Post by joe8d » Thu May 22, 2014 8:25 pm

I have about 1M at Fidelity (my employer used Fidelity).
Given that, of course FIDO will pull out all stops to keep you. 1M will get you Flagship Status at VG and all kinds of support.
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Re: Fidelity vs. Vanguard

Post by Ged » Thu May 22, 2014 9:04 pm

bottlecap wrote: Fidelity may not have tried to sell you anything, but make no mistake, they are hoping you bring money in an invest in their active funds at some point. Most people probably do, chasing returns. If they didn't, Fidelity wouldn't be able to provide you all those services. That doesn't make Fidelity bad, they just have a different model than Vanguard.
If you don't use these more expensive funds there is no downside.

Judging by the way they treat me they are happy to have my account despite the fact I only invest in low cost passive funds.

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Re: Fidelity vs. Vanguard

Post by Bill M » Thu May 22, 2014 10:07 pm

I have accounts at both. Fidelity really screwed up an in-plan Roth 401k conversion a few years ago, and refused to fix it. No problems with goofs at Vanguard.

My Mom had accounts at both. As executor, I've had to deal with both to get the accounts distributed. Vanguard was a snap. Fidelity was countless snail-mail round trips and multiple trips to the local notary over a period of two months.

So my scorecard now reads: two strikes against Fidelity, none against Vanguard.

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Re: Fidelity vs. Vanguard

Post by Alan S. » Thu May 22, 2014 10:21 pm

In any given challenging situation, either custodian could look good vs the other, and within each firm there are a few sub standard CSRs, so you can expect the best performer to be the luck of the draw, ie matching your challenging situation with the competency of the employee who endeavors to address it.

For routine transactions, they are not identical, but it is probably splitting hairs with respect to choosing. Most important is adhering to sound investment principles of your own so you can maximize the experience with either custodian. I would put Schwab into the same mix.

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Re: Fidelity vs. Vanguard

Post by xzhou » Thu May 22, 2014 10:37 pm

Alan S. wrote:... I would put Schwab into the same mix.
Some 15 years ago, we had IRA opened at Schwab because they advertised no-fee-whatsoever, except that after <1 year they changed policy to charge $50 maintenance for low balance accounts. We promptly yanked our $2000 out of Schwab and paid the $50 account closing fee, and never looked back. I am sure they behave better nowadays, but I am not gonna give them a second chance, ever.

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Re: Fidelity vs. Vanguard

Post by LeeMKE » Thu May 22, 2014 11:27 pm

I'm with Fidelity and love the online tools they offer.

Their salesforce targets high value accounts. At $500,000 they check in pretty regularly. I am liquidating an account and transferring funds to Fidelity and was having problems with the source of the funds. Fidelity offered to help, and I think having them on a conference call helped alert the holder of my money that Fidelity wasn't likely to let them hold my money much longer. I referred a friend who inherited quite a bit of money, and I think I have a gold star by my name now. Large account holders also have access to the more experienced agents and that has been appreciated when I was doing stuff with the retirement accounts and didn't know the changes in law made some of my work no longer necessary.

Some of the folks at Fidelity are anxious to "help" but I don't have a problem with them offering, and they have never become pests.
Last edited by LeeMKE on Sat May 24, 2014 12:20 am, edited 1 time in total.
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Re: Fidelity vs. Vanguard

Post by William4u » Fri May 23, 2014 12:04 am

I am a bit wary of staying with Fidelity as I age (I have both Fidelity and Vanguard accounts now). Harvard economist David Laibson talks about “dementia insurance” to protect us from making bad financial decisions as we age. This is a significant problem for many seniors. Building trust over a long period of time allows an organization to eventually move an aging client into more and more profitable active management, and capture more of an elderly client’s financial assets when the elderly client's guard is down.

Consider this boglehead discussion of the long-term risks of attending free lunches with an "investment sales pitch" ...
Dianne wrote:
nisiprius wrote:
HueyLD wrote:You might want to attend one just to see what it's all about.
I would not. Huey, thanks for the link to the story of Earl Bronstein, professional plate licker,, but did you read the last paragraph?

I would not. "You can't cheat an honest man." If you go to one with the idea that you are just going to have a free meal and enjoy feeling superior to the salesperson, you are cheating.

So, what actually happens? He is the irresistible force, you are the immovable object, nobody knows what will happen.

Nevertheless: he is a professional who earns a living by selling. You probably do not earn your living by resisting sales. He he does this dozens of times a year. You do this once or twice. Who has had more practice? Who has more skill?

We have a friend who said that she enjoyed going to time-share presentations just to get the free dinner. She said, direct quote, "Oh, when they come over to do the sales pitch, I just tell them 'I'm just here for the free dinner' and they go away and don't bother me." Imagine our surprise to discover some time later that she was trying, with great difficulty, to unload a time-share that she had bought and never used.

Go to one of these presentations and there is a small but real risk that you might end up buying something.

So back to Earl Bronstein, professional plate licker, and that revealing last paragraph!
one seminar he attended on health care struck a nerve. "I wound up taking out a long-term care policy for my wife. That particular (topic) made sense to me. We’re both seniors. All you need to do is look around at all the people needing healthcare, and, with healthcare being so expensive, this one just made sense."
So, whaddaya think? He ate 50 free lunches, let's say they were worth $50 each, for a grand total of $2500. He bought a long-term-care policy, total cost, what? $25,000? $50,000? Now, mind you, I personally happened to think LTCi made sense for me--always a contentious topic in Bogleheads, but we bought it. So, let's say he bought a legitimate product that he needed.

But was this a wise way to buy it? How much comparison shopping did he do? If he had skipped the free dinners and spend the time shopping carefully for LTCi--seeking insurers, rather than buying from the insurer that sought out him--isn't it possible that he'd have saved more than $2,500--or gotten a better policy?
Yes. This is their business model. The one person who buys the time-share pays for the meals of everybody there. They don't need for you to buy this time -- they have the ability to outwait you. And let me add one wrinkle: A significant number of Americans go through a period of diminished mental capacity before dying. Even if you are never diagnosed with dementia or rendered unable to live independently, you will likely reach a point where you simply don't have the same analytical skills or the strength of will that allowed to you say no to the sales pitch in the past. If you get into the habit of going to these dinners, you will keep going to them after you lose that ability to say no, and then you will make the purchase that more than pays for all of the past free meals.

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Re: Fidelity vs. Vanguard

Post by bondsr4me » Fri May 23, 2014 7:02 am

It can be a dilema for sure. I have accounts with Vanguard, Fidelity, Schwab and TDAmeritrade.
If I was to rank each based on website interface and all website features available it would be:

1. Fidelity
2. TDAmeritrade
3. Schwab
4. Vanguard

This rating does not mean VG is bad; quite the contrary; I really like the company VG because I do believe
they have investors' best interests at heart while the others are in it for profit for the shareholders.

Happy "Investing" to all,
Don

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More than adequate.

Post by Taylor Larimore » Fri May 23, 2014 7:16 am

Dave:

We moved to Vanguard in 1986. We have 6 all-Vanguard (non-brokerage) funds and we stay-the-course. The Vanguard website has far more information than I can use and is more than adequate.

Best wishes.
Taylor
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Re: Fidelity vs. Vanguard

Post by vested1 » Fri May 23, 2014 7:36 am

William4u wrote:I am a bit wary of staying with Fidelity as I age (I have both Fidelity and Vanguard accounts now). Harvard economist David Laibson talks about “dementia insurance” to protect us from making bad financial decisions as we age. This is a significant problem for many seniors. Building trust over a long period of time allows an organization to eventually move an aging client into more and more profitable active management, and capture more of an elderly client’s financial assets when the elderly client's guard is down.
This is a valid concern in my opinion. I'm a bit biased since I feel that Fidelity took advantage of me by steering me to PAS accounts when I was a novice investor, not that I'm a wizard now (sorry Wizard). As others have said in prior threads, Fidelity or any other for profit firm are fine if you know the pitfalls of blindly following their advice. For true fiduciary service I would stick with Vanguard.

Incidentally, I still have an account through Fidelity which is a NY life fixed annuity. When it matures next year I'll move it to Vanguard with everything else. Switching firms did nothing to slow down the emails from Fidelity, urging me to attend their online presentations and offering their sage advice. I was a "private client" as well, but their direction for me turned out to be self-serving.

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Re: Fidelity vs. Vanguard

Post by moshe » Fri May 23, 2014 7:41 am

I transferred some stock from a DRIP account to both Fidelity and to Vanguard on separate occasions.

Fidelity:
Filled out forms, scanned, submitted. Received email two days latter that they did not receive the authorization forms?!!? I called a Fidelity CSA. He SAW the form online that i had submitted. FIDO CSA Head scratch time...."really sorry for the inconvenience, etc..." Had to print again, re-sign and fax form. Not a big deal but when the CSA can see the form online but cannot solve the problem without inconveniencing the client that is NOT customer service. Received quality survey. Filled it out and told them how unsatisfied i was with the process. Still waiting for a call back..... Granted I have a small 20K account with them so i guess I am not important enough to them. I predict my account with them will not be growing larger anytime soon. Customer service fail.

Vanguard:
One form. One contact. DONE. Much larger account i grant you but still.... MUCH better customer service.

Needless to say the bulk of my current and future $'s will stay/go to Vanguard.

You millage may vary but this is what happened to me recently.

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Re: Fidelity vs. Vanguard

Post by JamesSFO » Fri May 23, 2014 7:51 am

I think what the OP is finding is that if you survey enough people someone's had a bad experience with one or the other of these companies. Neither of them is perfect. Pick the one that you think works best for you and be aware of their biases.

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Re: Fidelity vs. Vanguard

Post by bottlecap » Fri May 23, 2014 8:17 am

I think anyone can have a good or bad experience with Vanguard or Fidelity as a one-off - it's like any other company. Hopefully they make it right when this happens. I had a 401k at Fidelity some years back and was grateful to have it - if you can't have Vanguard, Fidelity provides limited, but largely sufficient, low-cost index funds. I also have to admit that their website is slick and easy to use. Vanguard's site wasn't bad, but Fidelity's was (and might still be) better.

Now that I'm in the process of rolling over that 401k (now with another provider the company sadly switched to), I seriously considered Fidelity despite already having accounts at Vanguard. In the end, Vanguard has better (as in more diverse), and cheaper, index options, so I'm going with them. It doesn't hurt, either, that Vanguard actively tries to keep costs for these funds low on an ongoing basis. I doubt Fidelity's index funds will be getting any cheaper, as they are simply loss leaders to attract client money.

I'm glad Fidelity is out there and if you choose their Spartan funds, you're going to be fine. But I am mostly product-oriented and Vanguard has the better selection of index products, so I find myself there. You won't find me saying anything bad about Fidelity, though.

JT

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Re: Fidelity vs. Vanguard

Post by dickenjb » Fri May 23, 2014 8:31 am

I have my 401(k) and employee stock options at Fidelity. Everything else at Vanguard. I have received excellent service from both. I am Flagship level at Vanguard and similar at Fidelity.

My options don't expire at Fidelity until 2018 so could not consolidate before then. I just learned that my 401(k) plan does not support RMD's - you have to take out 100% and rollover to an IRA, or take 2-10 installments. So before I turn 70.5 I will be rolling over my 401(k) to an IRA.

I like both websites and use the tools on both. I am leaning toward staying with both firms. There is nothing wrong with Fidelity as long as you stick with Spartan funds.

Interestingly Fido signed all the bonus level employees at my former employer up for FES - Fidelity Executive Services. We get all kinds of free help, like expert help using the Fido Retirement Income Planner tool, Black - Scholes analysis of our NSO's, college cost planning, etc. I asked them flat out how they could afford to do all that for free, and the very candid response was, "it leads to stickiness of assets".

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Re: Fidelity vs. Vanguard

Post by jimmyrules712 » Fri May 23, 2014 9:09 am

Vanguard's mission is to minimize costs, which is mostly good for consumers, but that model also minimizes customer services.

Fidelity mission is to maximize profits, partly by winning over as many customers as possible. Their model is probably going to result in better customer service (along with that better website & tools), but somewhere along the way someone is paying more for them to be able to provide that.

I think that a Boglehead investor who uses Fidelity and only the Fidelity index funds could take advantage of the better customer service without being one of the schmucks who pays for that better customer service, although there is always a chance that in the future Fidelity won't be so kind to investors who they don't make any money off of. If you're comfortable with that risk and the possible need to move off of Fidelity one day if they change things then you could use Fidelity and be just fine.

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Re: Fidelity vs. Vanguard

Post by Sheepdog » Fri May 23, 2014 9:10 am

Paul Merriman wrote his thoughts of Fidelity vs Vanguard http://www.marketwatch.com/story/fideli ... nt_popular . It starts as follows:
Even though Fidelity is a great company with many successful funds, in my estimation, Vanguard is clearly better for investors who are building a portfolio of basic asset class funds.

There's nothing wrong with Fidelity, and for many years I have been helping investors with Fidelity-sponsored 401(k) plans choose the best available funds. Many investors are wedded to Fidelity, T. Rowe Price or other fund families through their 401(k) or similar retirement plans. These people deserve guidance on the best ways to use their plan options.

But if you have a choice, you should look "under the hood" for some details about Fidelity and Vanguard. Every time I do that, I find that Vanguard comes out on top. If your goal is to make your retirement money do the most that it can for you and your family without taking any more risk than you need to, then you should look under the hood too.
He ends with these paragraphs:
Fidelity rightly brags about its huge pool of talented analysts and fund managers, and there's no doubt they work very hard. But savvy investors want results. And they will find more of what they want, in my opinion, at Vanguard than at Fidelity.

The lesson here isn’t really about whether to use Vanguard or Fidelity. The important lesson is never forget the potential damage high expenses, turnover and active management missteps can cost you in the long run.
Last edited by Sheepdog on Fri May 23, 2014 9:15 am, edited 1 time in total.
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Re: Fidelity vs. Vanguard

Post by TheTimeLord » Fri May 23, 2014 9:14 am

Like many I have accounts at both. Personally I have no plans to consolidate but from what I have seen so far Fidelity is the best of the two at customer service.
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Re: Fidelity vs. Vanguard

Post by WallyBird » Fri May 23, 2014 9:29 am

I have accounts with both firms, though I consider Vanguard as my primary investment firm.

In the past 15 years I've had maybe three occasions where I needed to call for assistance. The first was about a rollover from a Vanguard-administered 401K to an IRA. The Vanguard rep told me that they could move the assets in-kind, without needing to sell and repurchase. More recently, they moved some stock from a DRIP account to a Vanguard brokerage account, and I called with a few questions on that transfer.

All of my other interactions have been online. I've read various gripes about Vanguard's web site, and I don't see what the fuss is about. Anything I need to do with Vanguard funds can be done from the web site. Maybe there are some situations with individual stocks and brokerage that might be better done by other firms, but I intend to avoid those situations. For now, at least. :mrgreen:

I have nothing against Fidelity, and readily recommend them to people who really want to go to a storefront and get some in a person assistance. But for my purposes, Vanguard works fine, with low costs across the board. :moneybag :beer
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Re: Fidelity vs. Vanguard

Post by Ged » Fri May 23, 2014 9:32 am

One of the things I found at Fidelity that is considerably more attractive than at Vanguard is their Donor Advised Funds. At Fidelity the minimum initial contribution is $5000, while at Vanguard it's $25,000.

Also, when my father passed away I found Fidelity to have far and away the best service for executors of all of the financial institutions I had to deal with. They assigned me a specific representative to work with and were extremely easy to work with throughout the entire process. They also had some good ideas on what to do with the assets while they were in probate which helped minimize the need to prepare tax forms during the distribution process.

I have used Fidelity's storefronts on a few occasions as well. Could I do with out them? Sure. But every 5 years or so something comes up where it's helpful.

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Re: Fidelity vs. Vanguard

Post by Sriracha » Fri May 23, 2014 11:25 am

The majority of our investments are with VG, but we do have a good-sized 401k with Fido. When the job resulting in that 401k ends, I imagine that we'll roll over the 401k into a VG IRA even though I do appreciate the small service advantages presented by Fido's website, etc. At that point, we'll be far enough along the path to retirement (hopefully) to want to emphasize the simplicity of dealing with only one company (other than maybe some PenFed CDs or something like that) on investment matters and not having to worry about later pressure to invest outside the passive, low-cost vehicles to which we've become accustomed. That seems like the way to go for me, especially since I haven't needed any more on the service front (so far) than VG offers. Might as well not pay for stuff I don't use.
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Re: Fidelity vs. Vanguard

Post by FelixTheCat » Fri May 23, 2014 11:35 am

I'm a Boglehead. My money is in low-cost index funds at Vanguard.
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Re: Fidelity vs. Vanguard

Post by TheTimeLord » Fri May 23, 2014 12:22 pm

imgritz wrote:I'm a Boglehead. My money is in low-cost index funds at Vanguard.
???? Fidelity has lots of low cost index funds and ETFs. How does using Vanguard relate to being a Boglehead?
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Re: Fidelity vs. Vanguard

Post by carolinaman » Fri May 23, 2014 12:28 pm

I am not surprised at all with the response of Fidelity and Vanguard. It fits the style of both. I have accounts at both Vanguard and Fidelity and prefer that approach. Each has certain strengths. I have found that Fidelity has a broader array of services which I appreciate, has a better website and better customer service. Of course, you cannot beat the funds that Vanguard offers. In fact, I own Vanguard ETFs in my Fidelity account. Why not continue with both of them?

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Re: Fidelity vs. Vanguard

Post by placeholder » Fri May 23, 2014 12:39 pm

StarbuxInvestor wrote:Fidelity has lots of low cost index funds and ETFs. How does using Vanguard relate to being a Boglehead?
Also you can own Vanguard ETFs anywhere and get ERs equivalent to Admiral share.

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Re: Fidelity vs. Vanguard

Post by FelixTheCat » Fri May 23, 2014 1:18 pm

???? Fidelity has lots of low cost index funds and ETFs. How does using Vanguard relate to being a Boglehead?
Jack Bogle ~ Vanguard founder and promoted concepts of indexing. I guess you could be a Boglehead wannabe somewhere else. :D
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Re: Fidelity vs. Vanguard

Post by placeholder » Fri May 23, 2014 2:01 pm

imgritz wrote:I guess you could be a Boglehead wannabe somewhere else.
No you can be a Boglehead somewhere else no "wannabe" about it.

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Re: Fidelity vs. Vanguard

Post by PinotGris » Fri May 23, 2014 3:24 pm

i have not read all the responses yet but thought i will post our impression as we are in similar position as the OP but have been gradually moving our monies to Vanguard.

there are several reasons i do not prefer Fidelity although my husband's 401K is managed by them which is where the company has it. we get very little information as to performance and portfolio holdings of these funds. we can go and look at it ourselves online but i would like to hold statements in my hand and study them. often it feels like we dealing with it blindly. perhaps this is is not Fidelity's fault because they only administer it. the agent who is assigned as the 401K specialist has done nothing that has contributed positively to our experience.

the year my husband retired they botched up out MRW. they forgot to do it. we were just getting used to all the different distributions we were getting and my husband had to deal with a painful surgery, it was mess.. we had to file an apology and explanation to the IRS. they failed in the fiduciary duty in my books. we had to take 2 withdrawals the following year which was not very nice on our taxes. we have since then set it up in an ironclad way so that never happens again.

i also think Fidelity is a spendthrift. they throw these lunches and gala events for their customers on a monthly/periodic basis. it has now stopped or we are just not getting invited. they have speakers and we attended for the information, and the great food and party in nice downtown restaurants with free parking provided. but what we got out of these was so little and so badly covered we came away with not much more knowledge than when we went in. these used to be much better but now we just get responses to meet with our rep. i always felt these events were being paid for with our money. vanguard has webinars which are excellent. low cost and we can watch it any time.

i love vanguard. i feel i know exactly what is going on with our investments. i understand their philosophy. we have had our portfolios analysed and were pleased with how much information and advice we got. one thing is they always steer you towards index and low expense funds. we have made the switches per their recommendations, but i don't know this is the best. i still have Wellington and continue to invest in it.

When they get back to me they are always very helpful and i get the information i need. they are responsive. with fidelity i always feel they are too slick and always trying to sell me something i would not want.

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Re: Fidelity vs. Vanguard

Post by Alskar » Fri May 23, 2014 3:26 pm

If you search this forum you'll find several Fidelity vs Vanguard threads with more information.

FWIW, I closed my Vanguard accounts a couple of years ago and now hold my all-Vanguard ETF portfolio at Fidelity. I found the customer service at Vanguard to be appallingly poor and the Vanguard website to be poorly written and buggy. As engineer, I found this to be offensive so I moved my money to my Fidelity accounts. I know many people that find the Vanguard website and customer service to be just fine so YMMV.

If I was starting from scratch, I would probably consider TD Ameritrade as most of the Vanguard ETF's I would consider trade for free at TD Ameritrade.
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Re: Fidelity vs. Vanguard

Post by claver » Fri May 23, 2014 7:36 pm

LeeMKE wrote:I'm with Fidelity and love the online tools they offer.

Their salesforce targets high value accounts. At $500,000 they check in pretty regularly. I am liquidation an account and transferring funds to Fidelity and was having problems with the source of the funds. Fidelity offered to help, and I think having them on a conference call helped alert the holder of my money that they weren't likely to let them hold my money much longer. I referred a friend who inherited quite a bit of money, and I think I have a gold star by my name now. Large account holders also have access to the more experienced agents and that has been appreciated when I was doing stuff with the retirement accounts and didn't know the changes in law made some of my work no longer necessary.

Some of the folks at Fidelity are anxious to "help" but I don't have a problem with them offering, and they have never become pests.
My experience with Fidelity has also been extremely good. I have never gotten pushed on anything, and I have learned a lot by being asked questions by the reps, helped on the phone, and pointed to some really fine online planning and information tools. For example, I have used just about every retirement planner out there and nothing comes close to Fidelity's retirement income planner for its depth, careful assumptions, sophistication, completeness, and relative ease of use.

I have had a couple of phone calls with Vanguard reps. There were ok, but much less informed and with much less time to help than the Fidelity folks. The Fidelity phone rep, after spending a half hour on the phone with me about a difficulty I was having in buying a Vanguard fund without moving cash over to Vanguard, gave me a much better explanation of the difficulty at Vanguard's end than the Vanguard rep was able to do in the 10 minutes he allocated to me. I think the Fidelity rep understood the situation much better. Fidelity was also extremely helpful in converting one account type to another, importing funds, inheriting a small IRA-BDA account and numerous other things. I come away from my interactions with them often wondering how they get such quality people as reps and get them to be so genuinely courteous and helpful to clients. When I have to call someplace else, the experience is always inferior.

You can't beat Fidelity on expertise or service or choice of investments or online tools and resources. And they don't cost any more than Vanguard if you buy equivalent types/categories of funds (e.g. Spartan). And they are straight up honest as good as they come.
Last edited by claver on Mon May 26, 2014 10:24 am, edited 2 times in total.

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Re: Fidelity vs. Vanguard

Post by Dave C. » Fri May 23, 2014 10:30 pm

I am the OP and the responses to my post are all greatly appreciated, and quite frankly, I am surprised at the extent and number of responses.
Each of the responders have helped me clarify precisely my next steps.

1. I will keep both of my accounts exactly as they are, one at Fidelity the other Vanguard.
2. Rest assured, I am in no danger of being persuaded by Fidelity to move into any type of managed funds. I could be described as a long time, hard-core proponent of 3 to 4 index funds within an appropriate AA.
3. Precisely because of #2 I will continue to take advantage of the Fidelity's very strong customer service, web-site and investment distribution analysis, along with any needed consultation.

As one responder alluded to, I expect my $1 million on deposit at Fidelity will keep the customer service and other benefits flowing to me for the foreseeable future.

Thank you all again for your very precise and targeted comments on my original post. Once again you made my decision quite simple. 8-)
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Re: Fidelity vs. Vanguard

Post by lululu » Fri May 23, 2014 11:09 pm

xzhou wrote:
Alan S. wrote:... I would put Schwab into the same mix.
Some 15 years ago, we had IRA opened at Schwab because they advertised no-fee-whatsoever, except that after <1 year they changed policy to charge $50 maintenance for low balance accounts. We promptly yanked our $2000 out of Schwab and paid the $50 account closing fee, and never looked back. I am sure they behave better nowadays, but I am not gonna give them a second chance, ever.
They still sock customers with the $50 closing fee per account. A guaranteed way to get me not to return. I don't know about the low balance fee.

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Re: Fidelity vs. Vanguard

Post by placeholder » Sat May 24, 2014 12:21 am

I don't know why people complain so much about transfer out fees when almost any brokerage will reimburse those (well except Vanguard).

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Re: Fidelity vs. Vanguard

Post by AQ » Sat May 24, 2014 12:39 am

Fidelity is probably the oft-cited competitor to Vanguard. Just curious which one could be the number 3 firm on this forum after these 2?

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Re: Fidelity vs. Vanguard

Post by JamesSFO » Sat May 24, 2014 2:26 am

AQ wrote:Fidelity is probably the oft-cited competitor to Vanguard. Just curious which one could be the number 3 firm on this forum after these 2?
Probably Schwab or TD Ameritrade.

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Re: Fidelity vs. Vanguard

Post by bondsr4me » Sat May 24, 2014 10:41 am

TDAmeritrade lets you buy Vanguard ETFs commission free. There is 30 day holding period involved with these free ETFs.
Vanguard does not charge commissions on their funds/ETFs and they also have some trading restrictions.
You can't go wrong at either place, but TDA does offer more extras.
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Re: Fidelity vs. Vanguard

Post by placeholder » Sat May 24, 2014 11:40 am

Yeah based on reference in threads I'd say TD Ameritrade mainly because of the commission free ETFs Don mentioned and they have a good bonus program for transfers although that doesn't get as much play in general.

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Re: Fidelity vs. Vanguard

Post by ogd » Sat May 24, 2014 12:22 pm

Dave: my default recommendation is Vanguard. The reason is both Fidelity and TD have profit incentives to put you in higher-cost assets and will more or less subtly push you towards that direction. The amount of pressure can vary with company leadership and strategy, so even if it's low right now it might not always be so. More importantly, even if you trust yourself to always resist it (which is often not the case with those that ask this question), a spouse or survivors might be more vulnerable.

Somewhat weaker arguments for Vanguard are that their index funds are in fact slightly better than Spartan (because of their special tax efficiency advantage derived from ETF shares), and IMHO slightly better than even their ETFs in day to day mechanics. Moreover, you're guaranteed to always have them available at zero cost unlike ETF arrangements which might change.

None of these is an overwhelming argument, but something to consider. Fidelity is still a fine choice, as is Schwab (no experience with TD, personally). If you find their service that valuable, or like placeholder you want the bonuses, I can see why you'd choose one of them over Vanguard.

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Re: Fidelity vs. Vanguard

Post by placeholder » Sat May 24, 2014 12:30 pm

ogd wrote:The reason is both Fidelity and TD have profit incentives to put you in higher-cost assets and will more or less subtly push you towards that direction.
I have never had that experience.

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Re: Fidelity vs. Vanguard

Post by ogd » Sat May 24, 2014 12:42 pm

placeholder wrote:
ogd wrote:The reason is both Fidelity and TD have profit incentives to put you in higher-cost assets and will more or less subtly push you towards that direction.
I have never had that experience.
placeholder: see several posters above, and I've seen it at Schwab as well. On the theoretical level, you can't deny that the incentive exists and in the best case it's only corporate policy that keeps them from being more aggressive about it.

Like I said, it might not be worth much to you, but it's an argument to consider.

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Re: Fidelity vs. Vanguard

Post by afan » Sat May 24, 2014 12:43 pm

Each to his own.

I don't find Fidelity's more aggressive marketing to be a plus. Vanguard will provide the same services if you ask, and will leave you alone if you don't. To me, this is ideal.

Fidelity frequently offers to do financial planning, give me investment ideas, etc. I don't want that, but since I do have to accept some emails from Fidelity, I cannot just block it all as spam. Thankfully, they do not telephone me. If that starts I am pulling my money out.

I have tried to find a way to opt out of these offers, but no luck so far.
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Re: Fidelity vs. Vanguard

Post by truenorth418 » Sat May 24, 2014 4:36 pm

I have a taxable account with VG and my retirement accounts are with Fido. I like the support that Fido has provided and have had good experiences at their local offices. I like VG and own several of their funds outside of my VG account but It is a bit of a nuisance that they keep their mutual fund and brokerage accounts segregated.

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