Fidelity beating vanguard now? switch to Fidelity?

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Jimsad
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Fidelity beating vanguard now? switch to Fidelity?

Post by Jimsad » Sat Dec 29, 2018 8:41 am

Hi
I just saw on Fidelity web site that they now have four zero index funds and they listed all their other index funds and ETF having lower expense ratios than corresponding funds and are openly saying they are better than Vanguard.
I have most of my investments in vanguard funds at vanguard.
Am I losing out a lot by not switching ?
What are others doing?

Geologist
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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by Geologist » Sat Dec 29, 2018 9:03 am

The difference in dollars and cents in expenses between these Fidelity funds and the equivalent Vanguard funds is not worth worrying about. (Keep in mind that the total cost of 0.1% in expenses is $1/1000 in assets per year. The difference here is less than that.)

Perhaps if you had multiple millions in each index fund, but then unrealized capital gains could be an issue.

Further, I have investments in Vanguard funds for which Fidelity has not reduced its expense ratios (muni bond funds, for example).

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Nate79
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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by Nate79 » Sat Dec 29, 2018 9:05 am

Schwab and Fidelity have had many lower cost offerings than Vanguard fir a number of years now. It's nothing new. What was new was Fidelity offering the zero expense ratio funds.

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Jimsad
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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by Jimsad » Sat Dec 29, 2018 9:08 am

Fidelity particularly seems to target Vanguard in their advertising. Is this because vanguard has the largest number of investors with Index funds ?

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by PhysicianOnFIRE » Sat Dec 29, 2018 9:09 am

Vanguard's mutual funds are more tax-efficient. If you're investing in taxable, not only would you take a capital gains hit to sell Vanguard funds, but the Fidelity funds would likely underperform.

In tax-advantaged accounts, if performance is identical, you could potentially save $400 per $1,000,000 invested when going from an expense ratio of 0.04 (like VTSAX & VFIAX) to an expense ratio of 0.00 like FZROX. Up to you.

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by RadAudit » Sat Dec 29, 2018 9:11 am

Jimsad wrote:
Sat Dec 29, 2018 8:41 am
Am I losing out a lot by not switching ?

Difficult to say based on the numbers you've provided. Suggest you run the numbers based on your portfolio (ER x amt in fund) to see the impact in your case.

(Ex: ER [0.04%] x $1,000,000 = $400 vs. $0) So, if your portfolio is $1 million, it may cost you $400 more to have it in the Total Stock Market fund at Vanguard vs. what Fidelity is offering - assuming the indexes are the same. Don't know if that amount of money is worth enough to you to make the switch. Your call.
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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by Alchemist » Sat Dec 29, 2018 9:14 am

The difference between Fidelity and Vanguard expenses is not large enough to switch, because of the ER's. If there are other reasons you wish to switch, then the zero funds are a bonus but not really worth the upheaval to change your brokerage firm.

I say that as a very happy Fidelity customer who switched to Fidelity due to customer service issues at Vanguard. Yes I have lower expenses than vanguard, but the couple basis points do not matter to me anywhere near as much as the IT and Customer service difference. Once you get below 10 basis points in total cost, other issues matter more than reducing expenses a few more basis points.

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by indexonlyplease » Sat Dec 29, 2018 9:32 am

For those of you in taxed deferred account I would look more into your administrative cost. Example, the 457 fund I have changed to many Vanguard Funds around 2 years ago. But now they charge .08 fee on top of all funds even the Stable value Fund.

within the plan it has something called the Self Direct Brokerage Account. They use Charles Swabb. So 2 years ago I moved my stock funds over to Schwabb. I pay a yearly fee of $50.00. So this was a cost saving for me. I use my Stable Value Fund for my bonds so I am still paying the .08% fee but that is all for that fund. It had no cost a couple of years ago. Not many retirees where happy but it pays 3.25%.

My wife's 401k garbage. Way higher admin. fees. So, the little difference between Vanguard and Fidelity fees minimal compared to admin fees.


Just thougts.

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by oldcomputerguy » Sat Dec 29, 2018 9:35 am

RadAudit wrote:
Sat Dec 29, 2018 9:11 am
Jimsad wrote:
Sat Dec 29, 2018 8:41 am
Am I losing out a lot by not switching ?

Difficult to say based on the numbers you've provided. Suggest you run the numbers based on your portfolio (ER x amt in fund) to see the impact in your case.
OP, when doing as RadAudit suggested, don't forget to factor in whatever taxes you might have to pay for realized capital gains (assuming, of course, that the Vanguard funds you would have to sell are in a taxable account and that they actually have gains). If they have significant unrealized capital gains, it might take some time at Fidelity to break even.
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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by applejack123 » Sat Dec 29, 2018 9:38 am

PhysicianOnFIRE wrote:
Sat Dec 29, 2018 9:09 am
Vanguard's mutual funds are more tax-efficient. If you're investing in taxable, not only would you take a capital gains hit to sell Vanguard funds, but the Fidelity funds would likely underperform.
I don’t get this statement. If vanguards funds are more tax efficient, why would “not only would you take a capital gains hit?”

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by jeffyscott » Sat Dec 29, 2018 9:42 am

PhysicianOnFIRE wrote:
Sat Dec 29, 2018 9:09 am
In tax-advantaged accounts, if performance is identical, you could potentially save $400 per $1,000,000 invested when going from an expense ratio of 0.04 (like VTSAX & VFIAX) to an expense ratio of 0.00 like FZROX.
It's only been a few months, but VTSAX has beaten FZROX over the latter's short existence.
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by jeffyscott » Sat Dec 29, 2018 9:44 am

applejack123 wrote:
Sat Dec 29, 2018 9:38 am
PhysicianOnFIRE wrote:
Sat Dec 29, 2018 9:09 am
Vanguard's mutual funds are more tax-efficient. If you're investing in taxable, not only would you take a capital gains hit to sell Vanguard funds, but the Fidelity funds would likely underperform.
I don’t get this statement. If vanguards funds are more tax efficient, why would “not only would you take a capital gains hit?”
In order to switch, you would pay cap gains to sell the Vanguard fund and then pay taxes on future distributions of the Fidelity fund (which Vanguard would not have, due to their unique structure).
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by applejack123 » Sat Dec 29, 2018 9:49 am

jeffyscott wrote:
Sat Dec 29, 2018 9:44 am
applejack123 wrote:
Sat Dec 29, 2018 9:38 am
PhysicianOnFIRE wrote:
Sat Dec 29, 2018 9:09 am
Vanguard's mutual funds are more tax-efficient. If you're investing in taxable, not only would you take a capital gains hit to sell Vanguard funds, but the Fidelity funds would likely underperform.
I don’t get this statement. If vanguards funds are more tax efficient, why would “not only would you take a capital gains hit?”
In order to switch, you would pay cap gains to sell the Vanguard fund and then pay taxes on future distributions of the Fidelity fund (which Vanguard would not have, due to their unique structure).
Thanks, now I get it

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by nisiprius » Sat Dec 29, 2018 10:09 am

Jimsad wrote:
Sat Dec 29, 2018 8:41 am
Hi
I just saw on Fidelity web site that they now have four zero index funds and they listed all their other index funds and ETF having lower expense ratios than corresponding funds and are openly saying they are better than Vanguard.
I have most of my investments in vanguard funds at vanguard.
Am I losing out a lot by not switching ?
What are others doing?
Do the math. Even if you assume that the zero funds are essentially equivalent to their Vanguard counterparts--my belief is that they aren't but that you can't actually say which is better--calculate how much money you're talking about.

Consider a $300,000 portfolio invested as $100,000 each in Total Stock (VTSAX, 0.04% ER), Total International (VTIAX, 0.11% ER), and Total Bond (VBTLX, 0.05%). Your expenses are $40 + $110 + $50/year = $200/year. At Fidelity, Fidelity ZERO Total Market Index Fund (FZROX, 0.00%), Fidelity ZERO Total International Index Fund (FZILX, 0.00%), and Fidelity US Bond Index Fund (FXNAX, 0.025%) = $0 + $0 + $25 = $25/year. So, if that was all you were using Fidelity for, you would be saving $175/year on the expenses.

If you had a $30,000 portfolio, then $17.50.

My personal judgement is that these numbers do not amount to "missing out on a lot." Do your own calculations on your own holdings.

My belief is that Fidelity is a good firm, they've been running index funds for a long time and I think they know how to do it. So far they have never done any weird bait-and-switch teaser deals. I don't think it's a stunt, I think they've shrugged their shoulders and committed to zero ER index funds.

Speaking as a sincere Vanguard fan, it will be interesting to see the actual results when the ZERO funds have had a full year of history. My personal expectation is that they will indeed beat the Vanguard equivalents, but by less than the amount you'd calculate form the expense ratios. But I wouldn't factor my fan enthusiasm into the decision. For planning purposes I would assume that the Fidelity ZERO funds are exact what they appear to be: an opportunity to save a microscopic amount on funds that are roughly as good as their Vanguard counterparts.

I suggest that you think about this in the context of other personal financial optimizations, and in the context of the size of normal stock market fluctuations. Back in 2007, when there was a $100,000 minimum on Admiral shares, I suddenly had the brainstorm that I could save on Vanguard's expense ratios by replacing $60,000 of Total Stock and $40,000 in Total Bond, which would--given ERs at the time--have saved me about $100/year. I went ahead and did it, and had almost picked out the restaurant to take my wife to with that $100, when the stock market fell and the value of the fund fell by $30,000. It somehow was not much comfort to think "thanks to the lower ER, I only lost $30,000 instead of $30,100."

I would also take into account that switching brokerages is a nuisance. The only times it's gone smoothly for me was when I was transferring entire retirement accounts, and the receiving brokerage was able to hold every mutual fund in the portfolio. Every other time there have been maddening glitches and phone calls.

But, yes, to get back to the obvious: again, if you think that amount of savings is worth switching brokerages for, and you are prepared for the possibility that a year from now the actual differences might be more or less than that or that Vanguard might even win... and that the stock market might be up or down literally a thousand times as much as the expense numbers... sure.
Last edited by nisiprius on Sat Dec 29, 2018 12:12 pm, edited 1 time in total.
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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by David Jay » Sat Dec 29, 2018 10:20 am

jeffyscott wrote:
Sat Dec 29, 2018 9:42 am
It's only been a few months, but VTSAX has beaten FZROX over the latter's short existence.
Yes, keep in mind that Fidelity “made up” their own index to keep costs low. There is also huge influx of new money into this new fund and that affects dividend distributions. I would wait at least a year to see how the “Zero” funds are actually performing.
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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by Actin » Sat Dec 29, 2018 2:33 pm

The cost difference is not worth switching everything over.

I will say that Vanguard now has very poor customer service. You usually feel like you're talking to a robot instead of a person, and it seems to get a little worse every year.

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by Ricola » Sat Dec 29, 2018 2:48 pm

Actin wrote:
Sat Dec 29, 2018 2:33 pm
The cost difference is not worth switching everything over.

I will say that Vanguard now has very poor customer service. You usually feel like you're talking to a robot instead of a person, and it seems to get a little worse every year.
New to Vanguard this year and I have no complaints about their customer service. Last week I was in the process of creating an inherited IRA and service was outstanding, completing forms for me and calling another brokerage to create a three-way call to resolve issues and still calling me to follow-up and support. I am very impressed with Vanguard.

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by JoMoney » Sat Dec 29, 2018 3:05 pm

As a hypothetical of something I would consider:
Fidelity® 500 Index Fund (FXAIX) has a .015% ER
Fidelity® Government Money Market Fund (SPAXX) has a 0.42% ER
If I had a 90/10 allocation between them my blended ER would be 0.0555%

Vanguard 500 Index Fund Admiral Shares (VFIAX) has a 0.04% ER
Vanguard Federal Money Market Fund (VMFXX) has a 0.11% ER
If I had a 90/10 allocation between them my blended ER would be 0.047%

Both look good. Slight advantage still at Vanguard, and I'm a Vanguard fan. I like Vanguard's history, ethos, and structure and give them a little bit more trust that their interests might be a little better aligned with mine, and more likely to stay that way.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by MichDad » Sat Dec 29, 2018 3:19 pm

I've been a Vanguard customer for more than 20 years. During that time, I've had some customer service problems but none significant enough for me to stop doing all my business with them. My wife and I also have accounts with Schwab, Merrill Edge, and Fidelity. We've had better customer service with each of them than with Vanguard.

We spent Christmas Eve at my sister-in-law's house. Around midnight, she asked me about how to best invest her underperforming Roth IRA. I recommended that she transfer it to FZROX, one of Fidelity's new no-cost funds. She was convinced to do it and asked me to assist. Just after midnight (early on December 25th), we called Fidelity's customer service toll free number. A very professional customer service representative helped my SIL open her new Fidelity account and arrange for Fidelity to pull her Roth over to FZROX from her existing custodian.

One example of the better Fidelity customer service as compared to Vanguard is the fact that Fidelity is available 24/7. I believe Schwab and Merrill Edge are similar to Fidelity in this regard. The 24/7 availability of customer service reps would have been more of a factor for me before I retired because I tended to handle our family's finances and investments on weekends and holidays.

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by retiringwhen » Sat Dec 29, 2018 3:52 pm

JoMoney wrote:
Sat Dec 29, 2018 3:05 pm
As a hypothetical of something I would consider:
Fidelity® 500 Index Fund (FXAIX) has a .015% ER
Fidelity® Government Money Market Fund (SPAXX) has a 0.42% ER
If I had a 90/10 allocation between them my blended ER would be 0.0555%

Vanguard 500 Index Fund Admiral Shares (VFIAX) has a 0.04% ER
Vanguard Federal Money Market Fund (VMFXX) has a 0.11% ER
If I had a 90/10 allocation between them my blended ER would be 0.047%

Both look good. Slight advantage still at Vanguard, and I'm a Vanguard fan. I like Vanguard's history, ethos, and structure and give them a little bit more trust that their interests might be a little better aligned with mine, and more likely to stay that way.
Your example is the main reason I don't seriously consider moving to Fidelity for my main personal investments, I have a lot of cash at Vanguard and the ER difference is so remarkable, it makes the pittance of a couple basis points on stock funds laughable.

Also, I really wanted to open a Solo-401K with Fidelity as that would be a good place to get the zero funds and I wouldn't be parking cash, but they don't support Roth contributions (i don't need a rollover amf Fidelity wins there I believe). So I stay with Vanguard. In other words, do your own homework and pick the best company for you needs. I have said before and will repeat here, it is a very very good time to be a cost-conscious investor these days, you can win in lots of different ways!

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by BlackHat » Sat Dec 29, 2018 3:57 pm

My thing has always been that vanguard is owned by the investors. That's what makes the little more expense ratio worth it.
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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by Scooter57 » Sat Dec 29, 2018 4:11 pm

Vanguard's Prime Money Market Fund has a much better yield than Fidelity's due to a much higher Fidelity expense ratio.

I had gone so far as to open a Fidelity account so I could buy CDs there but ran into a big road block trying to link my local community bank. It took weeks to get it done as they were only set up to link huge national banks that would let them sign on online. Vanguard lets me link any bank or CU with the penny deposits and verification. It takes two or three days.This makes it very easy to pull money from small credit unions after CDs mature.

I had always read here that Fidelity customer service was better than Vanguard's, but that was not my experience at all. And when, after being forced to type my user name and password into my phone--as numbers-- and being connected to the wrong department I finally got to a rep, he was of no help at all explaining a problem that turned out to be because my account had just been opened.

Vanguard has its issues and I wish they weren't so bent on world domination but I've been with them since 1989 and have no complaints. They straightened out the one or two errors they caused quickly. The only real issue with them is that their website tends to become unavailable when markets get crazy. So if you want to buy on some flash dip you often cant. And it is shocking how bad their site search is. But I'm not trading so its NBD. Google can find anything on their site.

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by nedsaid » Sat Dec 29, 2018 4:18 pm

Jimsad wrote:
Sat Dec 29, 2018 8:41 am
Hi
I just saw on Fidelity web site that they now have four zero index funds and they listed all their other index funds and ETF having lower expense ratios than corresponding funds and are openly saying they are better than Vanguard.
I have most of my investments in vanguard funds at vanguard.
Am I losing out a lot by not switching ?
What are others doing?
If you are at Vanguard and are happy with them, I would not switch to Fidelity to save miniscule amounts of money.

I am a Fidelity customer and I just executed a couple of Fidelity Workplace Savings Plan rollovers to a Fidelity Rollover IRA. I did not buy any of the Fidelity Zero Funds, which I regard as gimmicky. My understanding is that they sample the indexes to save money, hard to say whether or not you will get tracking error. If I buy an index fund, I want as many stocks in that index as possible in my fund. For example, Vanguard will sample the Micro-Caps for its Total Stock Market Index fund as it is impractical for such a large fund to own all Micro-Caps, some just are not liquid enough to be investable.

Vanguard is also very, very good at indexing. Sometimes, their funds can very slightly beat the benchmark. Pretty amazing.
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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by Triple digit golfer » Sat Dec 29, 2018 4:29 pm

Three things come to mind, which may have already been mentioned:

1. I don't think it's worth switching for a couple basis points.
2. They probably track different indexes.
3. If this is a taxable account, you have to consider capital gains realized in the funds. How tax efficient are these funds compared to one another?

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by justsomeguy2018 » Sat Dec 29, 2018 5:18 pm

I have the Fidelity Zero Index Funds (decided on Fidelity as I have heard their customer service is better - so far so good on that front).

I will switch this question around - should I not have bought the zero index funds since they are new, and should I switch to Vanguard? Or should I wait and see how they perform over time?

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Re: Fidelity beating vanguard now? switch to Fidelity?

Post by AtlasShrugged? » Sat Dec 29, 2018 5:20 pm

Yes, Fidelity IS beating Vanguard - lower cost funds, better website, and definitely better customer service (not even close).

If the cost is minimal to switch, I think it is a no-brainer. You move the funds over to Fidelity without a second thought.
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Benefits of Fidelity vs Vanguard

Post by Randtor » Mon Feb 11, 2019 7:42 pm

[Thread merge into here, see below (Page 3) -- admin LadyGeek]

Hi all, this is a newbie question... I am transferring funds in a few days to Vanguard. My son-in-law works for Fidelity (not in the brokerage arm). I have a taxable account with stocks in Fidelity. He suggested I look at the different options that each firm has to offer. He said I could own Funds of both companies in either companies account that I own. So perhaps the difference of which company I should use comes down to several factors like: Ease of transferring money in as well as out; do they both offer the same perks like checking account, credit or debit cards, etc.
I am not going to be doing a lot of trading once I get situated. I plan on reducing my holdings to the basic 3 or 4 fund portfolio as the suggested boglehead method prescribes, and I am a proponent of long term holding.

1.Would it be worth investing 1/2 of my portfolio holdings in both companies and doing a like for like comparison in a year?
2. Does one have more to offer for ease of use than the other?

I will likely be retiring in the next 6 months or so, perhaps holding a part time position in my field if I choose, and earning a bit of 'personal use' money. We (my wife and I) will be needing to start withdrawing money for living expenses at that time.
Just trying to compare apples to apples before I decide how much to put where.... thanks for any insight you can provide.
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Re: Benefits of Fidelity vs Vanguard

Post by lakpr » Mon Feb 11, 2019 8:11 pm

Vanguard doesn’t offer credit cards, only Fidelity does. But other than that, you can’t go wrong with either. Splitting your assets in the middle with each firm sounds good!

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Re: Benefits of Fidelity vs Vanguard

Post by livesoft » Mon Feb 11, 2019 8:20 pm

I have accounts at both. I don't make transactions at either of them, but instead prefer 2 other brokers ahead of them.

But I can state that:

1. Vanguard does not answer the phone on Saturdays, Sundays, and holidays. Many working people only deal with their investment companies when they are not working. Fidelity says Representatives are standing by to help, any time of the day or night.

2. Vanguard does not have an online chat or real-time messaging tool. Fidelity does.

3. Vanguard does not have local offices. You may have a local Fidelity office near you. I have never ever been into my local Fidelity office.

4. Vanguard offloads a lot of its customer service to Bogleheads.org. Fidelity does as well.
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Re: Benefits of Fidelity vs Vanguard

Post by retiredjg » Mon Feb 11, 2019 8:24 pm

Randtor wrote:
Mon Feb 11, 2019 7:42 pm
1.Would it be worth investing 1/2 of my portfolio holdings in both companies and doing a like for like comparison in a year?
Not in my opinion. But it can't hurt either.

2. Does one have more to offer for ease of use than the other?
It is said that Fidelity has a better website and better customer service. Having said that, I'm a Vanguard customer and their website offers everything I need and I've never needed customer service other than my original transfer in and that was fine.


The truth is you really can't go wrong with either choice unless you are looking for an advisor. In that case, I would recommend Vanguard, but not Fidelity.

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Re: Benefits of Fidelity vs Vanguard

Post by CarolL » Mon Feb 11, 2019 8:33 pm

I'm a Fidelity customer. I do go to my local office. It's very convenient to make deposits. I recently had to transfer some stocks that had been held by "Computershare". This transaction required a "gold medallion" for each company that I wanted transferred. Broker at the local office took care of the entire thing, and the "medallions" ( turned out to be just a stamp) were given gratis.
Btw, Fidelity is rolling out an "app". Transactions can be done similar to mobile banking.
I'm a recent widow, and the transfer of my husband's assets to me was taken care of very easily. I, of course, was his beneficiary. All I had to do is submit his death certificate via email, and they took care of everything. I was very satisfied.

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Re: Benefits of Fidelity vs Vanguard

Post by Taylor Larimore » Mon Feb 11, 2019 9:06 pm

Randtor:
1.Would it be worth investing 1/2 of my portfolio holdings in both companies and doing a like for like comparison in a year?

In my opinion, it is ideal to hold all investments in one good company for these reasons:

1. One familiar statement.
2. Less paperwork.
3. Easier tax preparation.
4. Avoidance of low-balance and other small fees.
5. It's much easier to learn only one company's policies, fees, regulations, etc.
6. With larger holdings it may be possible to qualify for lower costs and premium services (Voyager, Admiral, Flagship).
7. Rebalancing and exchanges are easier.
8. Eliminates 3rd party brokerage.
9. A loyal customer is appreciated and usually treated better.
10. Less chance of errors.
11. More free time for ourselves.
12. In event of death or disability, it will be much easier for others.


2. Does one have more to offer for ease of use than the other?
My 30-year relationship with Vanguard has been excellent the few times I have contacted them. My simple 3-fund portfolio seldom requires contact with Vanguard. A few years ago Consumer Reports rated Vanguard the highest in customer satisfaction of any similar company. Growing pains may have changed this.

I favor Vanguard primarily because they are the only mutual, mutual fund company. This means that all investment returns (after costs) go to fund shareholders--not shared with company stockholders.

Both Vanguard and Fidelity are excellent companies. You should not go wrong whichever company you choose--but use one or the other.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Benefits of Fidelity vs Vanguard

Post by emlowe » Mon Feb 11, 2019 9:21 pm

I also think that consolidation to one company has a number of benefits, I have consolidated at Fidelity

A couple of things I like about Fidelity have already been mentioned, I'll add one more: I really like their Cash Management Account - you get ATM fees reimbursed (use any ATM anywhere to get cash), you can use bill pay, and write checks. The real advantage is you can keep your cash in any Fidelity money market - Fidelity will automatically sweep from the MM to handle cash transactions. Now, the downside is that the Fidelity MM funds aren't as good as Vanguard.

Vanguard is a great place to consolidate as well - it has other positives like better tax efficiency in their index mutual funds, better MM funds - and of course it has low-cost as a raison d'etre.

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Re: Benefits of Fidelity vs Vanguard

Post by Misenplace » Mon Feb 11, 2019 9:33 pm

I have accounts at both. I have had absolutely no issues with phone support at either company (although I have more than 10x more $ at Vanguard).

I actually prefer the Vanguard website- it’s more straightforward. I trust that Vanguard won’t try to steer my spouse into expensive funds or management when I’m gone. I enjoyed sharing a copy of William Bernstein’s “If You Can” with the recent college grads manning the front desk at my local Fidelity office. They had never seen anything like it.

I like Fidelity for 3 reasons:
1) By establishing my solo 401(k) and biz accounts there, I was able to roll in my old IRA from a previous job, and then do backdoor Roth at Vanguard.
2) They have a 2% cash back credit card that I use for most charges (U.S. based only). No thinking about it and I get a 2% rebate on everything I charge. [I can’t be bothered with revolving cash back categories.]
3) we opened our Donor advised fund there in 2017 because that was where I had the highly appreciated employer stock to donate, and they allow donor directed donations of as little as $50.

Other than these 3 reasons, probably would have stuck to Vanguard. I also have preferred status at a local brick and mortar bank where I can get notary and Medallion services, so I don’t need Fido for that.

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Re: Benefits of Fidelity vs Vanguard

Post by yogesh » Mon Feb 11, 2019 9:44 pm

Consolidate to 1. Our 401k is at Fidelity so the choice was simple to open checking, credit and brokerage accounts.
Emergency: FDIC | Taxable: VTMFX | Retirement: TR2040

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Re: Benefits of Fidelity vs Vanguard

Post by student » Mon Feb 11, 2019 9:57 pm

I am on the camp of investing with both companies. If there is some temporary computer issue with one company, I want to be able to access my money from a different company. However, if I have to choose one, I will choose Fidelity because of the 24-hour customer service phone line. If I think something is wrong, I want to be able talk to someone right away. Fidelity also has ATM card that reimburses ATM fee internationally.

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Re: Benefits of Fidelity vs Vanguard

Post by radiowave » Mon Feb 11, 2019 10:20 pm

OP, We have both, and like both for many of the reasons above.

- from a retirement standpoint, there are some advantages to having all tax-deferred funds in one account and at one broker. This is mainly for the pragmatic issue of RMD and how that is implemented. Working across multiple accounts and brokerages can be tedious and potentially trigger a penalty if you do not take out enough $ each year.

- I like the cash management feature of Fidelity and up until recently, was using it like a bank, bill pay, etc. But have changed my philosophy and now use a regular bank for normal cash flow and bill pay.

- I wish I had the taxable and Roth IRA all at Vanguard. It's a pain with Fidelity that you have to first transfer the $ to Fidelity first then purchase the funds. It took me about 2 minutes at VG to do one Roth this year as they will pull from an offsite bank. With Fidelity, it took about 3 days to do the other Roth.

- There are varying opinions about customer support. When I was consolidating several 401ks a few years ago to Fido, it was nice to have the local office not too far away to handle the paperwork. They also have a courier if you need to physically send a check or other paperwork to main office. But I've had recent good experience with Vanguard as well, very pleasant and professional CSR who actually emailed a few days later to ask if he could be of any additional help. So my impression is Vanguard is making a concerted effort to improve customer interactions and I agree with Taylor, Vanguard is an excellent company and if I had to chose one, it would be them.

- Regarding having 2 brokerages, well it does add some solace if something happened with one (re the IT failure at Wells Fargo this past week), a second option would give some backup and access to funds. But like flying in an airplane, its nice to have two engines over a single engine airplane, but your chance of having an engine failure is double.

My very best wishes as you transition to retirement!
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Re: Benefits of Fidelity vs Vanguard

Post by BogleMelon » Mon Feb 11, 2019 10:35 pm

I am in the middle of moving from Vanguard to Fidelity after getting tired of their system glitches. I can deal with glitches and contact the customer service to fix, not a problem by itself, every company has its own issues. But Vanguard CS wasn't that helpful for me resolving my issues. Let alone that the phone and email are the only way to communicate. Chat feature in fido is crucial for me, and I prefer the 24/7 availability for them.
I have to be accurate though, a fido rep was once gave a not so accurate answer about if the MM fund shares are sold automatically in CMA account to cover purchases. He said it is impossible, but I learned it is being done with no issue.
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Benefits of Fidelity vs Vanguard

Post by ruralavalon » Tue Feb 12, 2019 8:54 am

Congratulations on your imminent retirement :) .

Randtor wrote:1.Would it be worth investing 1/2 of my portfolio holdings in both companies and doing a like for like comparison in a year?
2. Does one have more to offer for ease of use than the other?
I would not split the portfolio to use two firms. I prefer the simplicity of having everything at one place.

Both are good companies. It is largely a matter of personal preference. My own personal preference is Vanguard. They have by far the largest and best selection of low expense mutual funds offered anywhere, I prefer their mutual structure which eliminates a lot of conflicts of interest, and like their website and app. Once a simple index fund portfolio is set up almost no customer service is required. I need to contact Vanguard at most once a year or so, and have found their customer service to be prompt, professional and courteous.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

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Re: Benefits of Fidelity vs Vanguard

Post by Jack FFR1846 » Tue Feb 12, 2019 9:05 am

To understand what works best for YOU, I like your idea of splitting in two and trying both firms. I have accounts at both. I recently "upgraded" my mutual fund account to a brokerage account so I could convert my admiral shared into ETFs and possibly move out of Vanguard. In any case, here's what I have seen with both:

Vanguard:
Paperwork galore. To open an account, I first worked with a concierge rep. Unfortunately, when calling Vanguard, there was no way to connect to him. I received one snail mail pile of forms and filled them all out. Then I got a second pile of forms where the unreachable concierge rep explained in a letter that he forgot to include these forms. I filled them all out. I then had to get signatures notarized by the Queen and send them back by USPS. Then they moved some money from Fidelity to fund my account. From there, all went smoothly. Took a total of 3 weeks.

Fidelity:
Went onto their website. Filled in the form online. Attached PDF of the "from" IRA that I was moving in. Printed 2 signature pages, signed them, scanned them in and attached the PDFs to my online file. Watched Fidelity website as they updated the progress from application and forms all received to "from company" contacted to funds received and invested as I directed. No notary. No Queen. No mail. No stack of forms. Start to finish, 3 days.

Vanguard:
Good index funds for a fair price.

Fidelity:
Good index funds for less than Vanguard.

I happen to have a bunch of other accounts at Fidelity. IRA, 401k, a pension, credit card, 529.

Support:
Vanguard:
Bankers hours and bankers days.

Fidelity:
24/7, even Christmas, New Years, Halloween.
Bogle: Smart Beta is stupid

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Re: Benefits of Fidelity vs Vanguard

Post by cpumechanic » Tue Feb 12, 2019 9:09 am

I have funds at both Vanguard and Fidelity.
One thing I like about Fidelity is the "full view" feature that allows you to see all your accounts in one place and updates real time. I use this to keep track of all my other accounts, and my credit card spending.
It also does a nice Asset Allocation Summary for me so I can keep my Stock/Bond Ratio under some control.

They just botched an "upgrade" of Full View in the last 12 months.. but overtime the screw_up's have been addressed and it is back to being useful again.

Once you set it up.. all of your assets, CC accounts, asset allocation, life insurance, and other financial details are all on one page, and someone coming in after you are gone can easily see the up to date account balances and descriptions.
I force my wife to log in and pull up Full view once a month or so to be sure she knows where to go when I am no longer around. I can print a summary and leave it in a folder for others if needed.

Vanguard used to offer some kind of automated finance summary, but they dropped it, and Full View (once set up) is way easier to manage then a spreadsheet, or Mint . (IMHO)

CPU
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Re: Benefits of Fidelity vs Vanguard

Post by mslaw » Tue Feb 12, 2019 9:19 am

“Vanguard Brokerage imposes a $10,000 minimum for CDs purchased through Vanguard Brokerage. “
https://investor.vanguard.com/cd-bond/

At Fidelity, the minimum is $1,000.

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Re: Benefits of Fidelity vs Vanguard

Post by mpnret » Tue Feb 12, 2019 9:37 am

CarolL wrote:
Mon Feb 11, 2019 8:33 pm
I'm a Fidelity customer. I do go to my local office. It's very convenient to make deposits. I recently had to transfer some stocks that had been held by "Computershare". This transaction required a "gold medallion" for each company that I wanted transferred. Broker at the local office took care of the entire thing, and the "medallions" ( turned out to be just a stamp) were given gratis.
Btw, Fidelity is rolling out an "app". Transactions can be done similar to mobile banking.
I'm a recent widow, and the transfer of my husband's assets to me was taken care of very easily. I, of course, was his beneficiary. All I had to do is submit his death certificate via email, and they took care of everything. I was very satisfied.
I just transferred a rather portfolio of individual stocks from ComputerShare to Vanguard without any issues. I did see a spot on the form for "gold medalllion" but my Vanguard Flagship rep said it wasn't necessary (something about electronic verification). The rep emailed me all the forms. I signed them, scanned them and emailed them back. Vanguard took care of everything. I never needed to speak to Computershare.
I do have a small checking account at a local bank for things like medallion sig (if I ever need one), certified checks, cashing paper savings bonds, etc.

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Re: Benefits of Fidelity vs Vanguard

Post by RickBoglehead » Tue Feb 12, 2019 9:43 am

cpumechanic wrote:
Tue Feb 12, 2019 9:09 am
I have funds at both Vanguard and Fidelity.
One thing I like about Fidelity is the "full view" feature that allows you to see all your accounts in one place and updates real time. I use this to keep track of all my other accounts, and my credit card spending.
It also does a nice Asset Allocation Summary for me so I can keep my Stock/Bond Ratio under some control.

They just botched an "upgrade" of Full View in the last 12 months.. but overtime the screw_up's have been addressed and it is back to being useful again.

Once you set it up.. all of your assets, CC accounts, asset allocation, life insurance, and other financial details are all on one page, and someone coming in after you are gone can easily see the up to date account balances and descriptions.
I force my wife to log in and pull up Full view once a month or so to be sure she knows where to go when I am no longer around. I can print a summary and leave it in a folder for others if needed.

Vanguard used to offer some kind of automated finance summary, but they dropped it, and Full View (once set up) is way easier to manage then a spreadsheet, or Mint . (IMHO)

CPU
Vanguard allows you to enter in assets held elsewhere. You simply put in the particulars - type of assets, amount owned, date acquired, cost paid, etc. With the stock symbol, Vanguard updates it just fine, and no one is logging into all your other accounts. If you add or decrease a holding, you simply go in and change the quantity, or the price paid.

You can also enter assets like a home or a car.

I have no need for anyone to manage my credit card information, I do everything on Quicken (on my PC) just fine.
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Re: Benefits of Fidelity vs Vanguard

Post by OhioGozaimas » Tue Feb 12, 2019 10:25 am

If you wish to establish a separate “carve-out” IRA for a different beneficiary, you can’t do that at Vanguard.

Per the Vanguard web site:
“The beneficiaries you select for your IRA won't carry over to your nonretirement account, or vice versa. But if you have multiple Vanguard IRAs of the same type—for example, 2 traditional IRAs—the beneficiaries you designate on one of them will carry over to all of them.” [Emphasis added.]
https://investor.vanguard.com/beneficiaries/

But at Fidelity, I found that you can “slice & dice” to create separate IRA accounts for different beneficiaries however you wish.
Map out your future – but do it in pencil. – Jon Bon Jovi

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Re: Benefits of Fidelity vs Vanguard

Post by Columbia85 » Tue Feb 12, 2019 11:04 am

mpnret wrote:
Tue Feb 12, 2019 9:37 am
I just transferred a rather portfolio of individual stocks from ComputerShare to Vanguard without any issues. I did see a spot on the form for "gold medalllion" but my Vanguard Flagship rep said it wasn't necessary (something about electronic verification). The rep emailed me all the forms. I signed them, scanned them and emailed them back. Vanguard took care of everything. I never needed to speak to Computershare.
I do have a small checking account at a local bank for things like medallion sig (if I ever need one), certified checks, cashing paper savings bonds, etc.
[/quote]

Hi mpnret:

I just have a small holding of shares at ComputerShare and it makes sense to transfer them to Vanguard. Does ComputerShare charge anything when the transfer occurs? Thanks for the info, it sounds straightforward to accomplish.

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Re: Benefits of Fidelity vs Vanguard

Post by abuss368 » Tue Feb 12, 2019 11:32 am

Randtor wrote:
Mon Feb 11, 2019 7:42 pm
Hi all, this is a newbie question... I am transferring funds in a few days to Vanguard. My son-in-law works for Fidelity (not in the brokerage arm). I have a taxable account with stocks in Fidelity. He suggested I look at the different options that each firm has to offer. He said I could own Funds of both companies in either companies account that I own. So perhaps the difference of which company I should use comes down to several factors like: Ease of transferring money in as well as out; do they both offer the same perks like checking account, credit or debit cards, etc.
I am not going to be doing a lot of trading once I get situated. I plan on reducing my holdings to the basic 3 or 4 fund portfolio as the suggested boglehead method prescribes, and I am a proponent of long term holding.

1.Would it be worth investing 1/2 of my portfolio holdings in both companies and doing a like for like comparison in a year?
2. Does one have more to offer for ease of use than the other?

I will likely be retiring in the next 6 months or so, perhaps holding a part time position in my field if I choose, and earning a bit of 'personal use' money. We (my wife and I) will be needing to start withdrawing money for living expenses at that time.
Just trying to compare apples to apples before I decide how much to put where.... thanks for any insight you can provide.
Rand
Welcome to the Bogleheads!

You can certainly do whatever works and lets you sleep at night. I would however prefer the simplicity of using only on fund company. In my opinion using one company provides benefits and advantages such as one familiar statement, perhaps lower costs, easy on spouse, easy on heirs, familiar with only one company, one tax reporting statement, possibly qualifying for lower cost funds from hitting minimum balances, and so forth.

Moving our portfolio to Vanguard was the best financial decision we ever made.
John C. Bogle: "Simplicity is the master key to financial success."

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Re: Benefits of Fidelity vs Vanguard

Post by BogleMelon » Tue Feb 12, 2019 11:34 am

abuss368 wrote:
Tue Feb 12, 2019 11:32 am


Moving our portfolio to Vanguard was the best financial decision we ever made.
Mind me asking where it was before? Was it at Fidelity?
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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Re: Benefits of Fidelity vs Vanguard

Post by jhfenton » Tue Feb 12, 2019 11:39 am

CarolL wrote:
Mon Feb 11, 2019 8:33 pm
Btw, Fidelity is rolling out an "app". Transactions can be done similar to mobile banking.
Vanguard and Fidelity both already have highly functional apps with mobile check deposit, mobile trading, etc.
Jack FFR1846 wrote:
Tue Feb 12, 2019 9:05 am
Vanguard:
Paperwork galore. To open an account, I first worked with a concierge rep. Unfortunately, when calling Vanguard, there was no way to connect to him. I received one snail mail pile of forms and filled them all out. Then I got a second pile of forms where the unreachable concierge rep explained in a letter that he forgot to include these forms. I filled them all out. I then had to get signatures notarized by the Queen and send them back by USPS. Then they moved some money from Fidelity to fund my account. From there, all went smoothly. Took a total of 3 weeks.

Fidelity:
Went onto their website. Filled in the form online. Attached PDF of the "from" IRA that I was moving in. Printed 2 signature pages, signed them, scanned them in and attached the PDFs to my online file. Watched Fidelity website as they updated the progress from application and forms all received to "from company" contacted to funds received and invested as I directed. No notary. No Queen. No mail. No stack of forms. Start to finish, 3 days.
The paperwork required is very much on a case-by-case basis. When I opened 5 Vanguard accounts for my wife and myself on Columbus Day 2015 and initiated transfers from existing accounts at TD Ameritrade, I printed out and signed exactly zero pieces of paper. Opening the accounts and initiating the transfers was entirely online. All 5 accounts arrived at Vanguard intact on Friday of the same week. The only paperwork we've ever had to send to Vanguard were our mutual full agent authorization forms that had to be witnessed and notarized, and that requirement is for security. (You can set up limited agent authorization entirely online.)

Likewise, when I transferred my HSA to Fidelity this past November, I did everything online and transferred my HSA in-kind from TD Ameritrade. It took less than two weeks beginning to end. For other folks in the long Fidelity HSA thread, Fidelity required paperwork to initiate transfers.

In other words, whether transfers require paperwork depends far more on the transferring custodian than on whether the recipient is Vanguard or Fidelity.

Vanguard and Fidelity are both perfectly fine companies.

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Re: Benefits of Fidelity vs Vanguard

Post by BogleMelon » Tue Feb 12, 2019 11:47 am

jhfenton wrote:
Tue Feb 12, 2019 11:39 am


Vanguard and Fidelity both already have highly functional apps with mobile check deposit, mobile trading, etc.

In my case, Vanguard mobile check deposit never worked. CS failed to resolve it. I read that others having the same issue, so I guess it is not just me...
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

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