Author Topic: Index Funds, Schwab or Vanguard?  (Read 10788 times)

CrashnBurn

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Index Funds, Schwab or Vanguard?
« on: June 09, 2017, 01:08:13 PM »
First Time Poster/Mustachian.

Recently got started researching my investments. I've had a Actively Managed Mutual Fund through Wells Fargo for years (Fundsource, Aggressive with 1.25% cost). My Dad set it up when I was a kid and my mother passed, and I collected her SS benefits until I was 18. I pulled on it for grad school (state undergrad college was super affordable and didn't need it), and now there's 11k left to invest. MMM's blog has changed how I view money, and now like most newcomers I've been researching index funds. This https://forum.mrmoneymustache.com/investor-alley/time-to-consider-schwab-with-latest-news-fund-ers-lt-vanguard-fidelity/ has helped clarify some of the differences between Schwab and Vanguard. Additionally, reading a couple of books off the reading list, as well as other sources (Profit Boss podcast was really helpful!). Not making any hasty, uninformed decisions.

I find myself trying to decide between Vanguard and Schwab. Right now I'm leaning Schwab. Any counter arguments?

Total Financial Assets;
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  • 7k - Traditional IRA (Wells Fargo)
  • $500 - 401k (New Job recently, PAI.com, 2050 fund)
  • 5k - Alliant Savings/Checking (split between two accounts)

dandarc

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Re: Index Funds, Schwab or Vanguard?
« Reply #1 on: June 09, 2017, 01:11:04 PM »

CrashnBurn

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Re: Index Funds, Schwab or Vanguard?
« Reply #2 on: June 09, 2017, 01:45:40 PM »
For the "why Vanguard?", jlcollinsnh says it best:

http://jlcollinsnh.com/2012/09/07/stocks-part-x-what-if-vanguard-gets-nuked/

Nice quick read! I'll take all the info I can get. I suppose my biggest qualm right now is the surprising amount of people who are with Vanguard, but are not happy with the customer service. Also the post is from 2012, before Schwab became competitive with it's percentage cost. I'm not too afraid of them becoming a 'Betterment," and raising their prices within 5-10 years.

nereo

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Re: Index Funds, Schwab or Vanguard?
« Reply #3 on: June 09, 2017, 01:56:28 PM »
For the "why Vanguard?", jlcollinsnh says it best:

http://jlcollinsnh.com/2012/09/07/stocks-part-x-what-if-vanguard-gets-nuked/

Nice quick read! I'll take all the info I can get. I suppose my biggest qualm right now is the surprising amount of people who are with Vanguard, but are not happy with the customer service. Also the post is from 2012, before Schwab became competitive with it's percentage cost. I'm not too afraid of them becoming a 'Betterment," and raising their prices within 5-10 years.

Even with their lack-luster customer support I'd still recommend Vanguard for the simple reason that it's client-owned. I've had to deal with Vanguard on a number of complex interactions and they're always helpful on the phone.  My main/only gripe is that response time is slower than I'd like.  In the end that matters little to me since I'll be investing for decades and in that context the delays to complete trasnfers and rollovers are negligible (to me).

As for cost - here I'll just say "meh".  The difference between 1% and 0.8% is pretty big.  The difference between 0.05% and 0.04% is small dollar-wise, even if its the same percentage. The history of Vanguard suggests over time their fees will be at or below Schwab, and, again, i prefer the client-owned model.
YMMV.

CrashnBurn

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Re: Index Funds, Schwab or Vanguard?
« Reply #4 on: June 09, 2017, 02:08:25 PM »
For the "why Vanguard?", jlcollinsnh says it best:

http://jlcollinsnh.com/2012/09/07/stocks-part-x-what-if-vanguard-gets-nuked/

Nice quick read! I'll take all the info I can get. I suppose my biggest qualm right now is the surprising amount of people who are with Vanguard, but are not happy with the customer service. Also the post is from 2012, before Schwab became competitive with it's percentage cost. I'm not too afraid of them becoming a 'Betterment," and raising their prices within 5-10 years.

Even with their lack-luster customer support I'd still recommend Vanguard for the simple reason that it's client-owned. I've had to deal with Vanguard on a number of complex interactions and they're always helpful on the phone.  My main/only gripe is that response time is slower than I'd like.  In the end that matters little to me since I'll be investing for decades and in that context the delays to complete trasnfers and rollovers are negligible (to me).

As for cost - here I'll just say "meh".  The difference between 1% and 0.8% is pretty big.  The difference between 0.05% and 0.04% is small dollar-wise, even if its the same percentage. The history of Vanguard suggests over time their fees will be at or below Schwab, and, again, i prefer the client-owned model.
YMMV.

Thanks for this. I was initially upset at the fees for Wells Fargo, but all of that was set up for me and I had very little interest in finances...until now. The most basic index fund at Vanguard seems to be the Vanguard 500 Index Fund Admiral Shares (VFIAX). And I'm comparing that to Schwab® S&P 500 Index Fund SWPPX. While Schwab has only a $1 min, Vanguard has a $10k min. Or is there fine print I'm missing? In the long term this isn't much, but for me right now that's everything. Loss aversion possibly at work ;-).

nereo

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Re: Index Funds, Schwab or Vanguard?
« Reply #5 on: June 09, 2017, 02:18:20 PM »
For the "why Vanguard?", jlcollinsnh says it best:

http://jlcollinsnh.com/2012/09/07/stocks-part-x-what-if-vanguard-gets-nuked/

Nice quick read! I'll take all the info I can get. I suppose my biggest qualm right now is the surprising amount of people who are with Vanguard, but are not happy with the customer service. Also the post is from 2012, before Schwab became competitive with it's percentage cost. I'm not too afraid of them becoming a 'Betterment," and raising their prices within 5-10 years.

Even with their lack-luster customer support I'd still recommend Vanguard for the simple reason that it's client-owned. I've had to deal with Vanguard on a number of complex interactions and they're always helpful on the phone.  My main/only gripe is that response time is slower than I'd like.  In the end that matters little to me since I'll be investing for decades and in that context the delays to complete trasnfers and rollovers are negligible (to me).

As for cost - here I'll just say "meh".  The difference between 1% and 0.8% is pretty big.  The difference between 0.05% and 0.04% is small dollar-wise, even if its the same percentage. The history of Vanguard suggests over time their fees will be at or below Schwab, and, again, i prefer the client-owned model.
YMMV.

Thanks for this. I was initially upset at the fees for Wells Fargo, but all of that was set up for me and I had very little interest in finances...until now. The most basic index fund at Vanguard seems to be the Vanguard 500 Index Fund Admiral Shares (VFIAX). And I'm comparing that to Schwab® S&P 500 Index Fund SWPPX. While Schwab has only a $1 min, Vanguard has a $10k min. Or is there fine print I'm missing? In the long term this isn't much, but for me right now that's everything. Loss aversion possibly at work ;-).

Vanguard has two SP500 index funds - the "Admiral" fund (which requires $10k) and the "Investor Class" (which requires $3,000).  The only difference between the two is that the "Investor class" carries an expense ratio of 0.14% while the admiral carries 0.04%  Once you've invested up enough in the Investor Class you can convert all your shares into the Admiral fund with it being a non-taxable event.

Vanguard does offer some funds with a $1,000 minimum, for example the Target-Date funds (e.g. VTWNX - Target Date 2020).  You can also buy the SP500 as an ETF (VOO -buying individual shares currently at ~$233/share).

CrashnBurn

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Re: Index Funds, Schwab or Vanguard?
« Reply #6 on: June 09, 2017, 02:36:18 PM »
Vanguard has two SP500 index funds - the "Admiral" fund (which requires $10k) and the "Investor Class" (which requires $3,000).  The only difference between the two is that the "Investor class" carries an expense ratio of 0.14% while the admiral carries 0.04%  Once you've invested up enough in the Investor Class you can convert all your shares into the Admiral fund with it being a non-taxable event.

Vanguard does offer some funds with a $1,000 minimum, for example the Target-Date funds (e.g. VTWNX - Target Date 2020).  You can also buy the SP500 as an ETF (VOO -buying individual shares currently at ~$233/share).

Thank you for demystifying the giant list of products on the Vanguard website. It's a bit overwhelming at first. Even 0.14% is a hell of a lot less than the 1.25% I'm currently paying with Wells Fargo. What's the symbol for the "Investor Class?"

CrashnBurn

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Re: Index Funds, Schwab or Vanguard?
« Reply #7 on: June 09, 2017, 03:09:29 PM »
Vanguard has two SP500 index funds - the "Admiral" fund (which requires $10k) and the "Investor Class" (which requires $3,000).  The only difference between the two is that the "Investor class" carries an expense ratio of 0.14% while the admiral carries 0.04%  Once you've invested up enough in the Investor Class you can convert all your shares into the Admiral fund with it being a non-taxable event.

Vanguard does offer some funds with a $1,000 minimum, for example the Target-Date funds (e.g. VTWNX - Target Date 2020).  You can also buy the SP500 as an ETF (VOO -buying individual shares currently at ~$233/share).

Thank you for demystifying the giant list of products on the Vanguard website. It's a bit overwhelming at first. Even 0.14% is a hell of a lot less than the 1.25% I'm currently paying with Wells Fargo. What's the symbol for the "Investor Class?"

Found it - took a hot minute - VFINX right?

nereo

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Re: Index Funds, Schwab or Vanguard?
« Reply #8 on: June 09, 2017, 03:10:03 PM »
Vanguard has two SP500 index funds - the "Admiral" fund (which requires $10k) and the "Investor Class" (which requires $3,000).  The only difference between the two is that the "Investor class" carries an expense ratio of 0.14% while the admiral carries 0.04%  Once you've invested up enough in the Investor Class you can convert all your shares into the Admiral fund with it being a non-taxable event.

Vanguard does offer some funds with a $1,000 minimum, for example the Target-Date funds (e.g. VTWNX - Target Date 2020).  You can also buy the SP500 as an ETF (VOO -buying individual shares currently at ~$233/share).

Thank you for demystifying the giant list of products on the Vanguard website. It's a bit overwhelming at first. Even 0.14% is a hell of a lot less than the 1.25% I'm currently paying with Wells Fargo. What's the symbol for the "Investor Class?"

VFINX = "Investor Class SP500"
VFIAX = "Admiral Class SP500"
VOO  = ETF of SP500

note: most vanguard index funds have both admiral and investor shares - for example the total market index symbols are VTSMX/VTSAX/VTI (index/admiral/etf, respectively).  You'll probably notice a pattern with how they assign their tickers...

 Basically it's a 'reward' for holding more money in a fund, since the cost-per-account does not scale linearly with the amount (in other words, much of the operating cost is fixed, so the more money you have the less it costs as a percentage of the total).


dandarc

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Re: Index Funds, Schwab or Vanguard?
« Reply #9 on: June 09, 2017, 03:33:40 PM »
Another thing to look at if you're in a taxable account is the distributions.

VTSAX (Vanguard Total Stock Market - Admiral) has an ER of 0.04%, SWTSX (Schwab total stock market) 0.03%, so Schwab wins on costs, right?

Maybe not - SWTSX makes annual capital Gains distributions.  VTSAX does not.  For 2016 this was about .45%.  If you're paying 15% capital gains, that's 6 to 7 basis points right there.  Vanguard has a patented structure for their ETFs which allows them to not only shelter the ETF from nearly all capital gains distributions, but the regular funds too.

Then add in some float - VTSAX pays dividends quarterly, SWTSX only pays them annually.

Bottom line, for me, is that the investors own Vanguard.  No other investment company has its interests aligned with investors in its funds this way.

secondcor521

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Re: Index Funds, Schwab or Vanguard?
« Reply #10 on: June 09, 2017, 03:41:19 PM »
I've been a Vanguard customer for nearly 30 years now, and have most of my money with them, and I like them very much.  They do have a tendency to want you to fill out and mail in paper forms for some things which I wish they would do online (Roth recharacterizations for example), but I think they're working on that.

When I wanted to get my kids started investing at an early age with Roth IRAs, Schwab was more welcoming - they had low-to-nonexistent minimums, and they were happy to set up custodial Roth IRAs for each of my kids.  My original plan was to have my kids move their Roths to Vanguard when the account value grew high enough.  Now I'm not really that worried about it because I've gotten to know Schwab and think they do right by their investors.

Schwab does sometimes encourage non-index non-buy-and-hold investing approaches in their newsletter.  Not a big deal to me.

Bottom line, in my view, is that both companies are excellent and you won't go wrong picking a low cost index fund or ETF from either one and investing into it over time.

CrashnBurn

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Re: Index Funds, Schwab or Vanguard?
« Reply #11 on: June 09, 2017, 03:51:04 PM »
Thank you so much for the additional viewpoints. I'm not going to make any investments until the end of the month (my own personal cooldown), and in the meantime learning as much about investing as I can. Keep it simple and diversified seems to be the route to take. I wish I could invest with both (Vanguard and Schwab), and run my own little financial experiment, but I don't think i have enough capital to see much difference.

I'm going to continue check this post to see other's opinions, keep 'em comin'!

aspiringnomad

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Re: Index Funds, Schwab or Vanguard?
« Reply #12 on: June 09, 2017, 10:29:48 PM »
There are several other posts on this forum comparing the two (and often Fidelity as well) so topic fatigue might be affecting the number of replies. I've used both and prefer Schwab, but I very much value a slick online interface and responsive customer service, and have come to terms with their governance model not being as saintly as Vanguard's. Others have the opposite view. YMMV.

MidWestLove

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Re: Index Funds, Schwab or Vanguard?
« Reply #13 on: June 10, 2017, 05:59:07 AM »
Yes, regarding post/topic  fatigue - too often these topics are simply used as excuses to do nothing. I will not do anything until I decide logic which is BS.

Remember to act! Any one of these (Vanguard, Schwab, Fidelity) if you use right products (index funds) is much better than what you have now, so stop procrastinating, decide, and move forward. Flip a coin if you have to, do not use this as excuse to pounder and contemplate.



on to specifics
1. Fidelity/Schwab provide arguably better user experience and interface according to some (myself included) and access to many products Vanguard does not do or does not want to be bothered with (credit card integration, cash management features).

2. They will never, ever be beholden to you in the way Vanguard is. they will ALWAYS be responsible to their owners/shareholders, and they will ALWAYS put interests of their owners first as they should and must do.

To me that is enough to use Schwab and Fidelity in areas I want and focus on Vanguard with everything else. Again,
a) set a first timeline for the 'decision'
b) decide (flip a coin if you must)
c) act


nereo

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Re: Index Funds, Schwab or Vanguard?
« Reply #14 on: June 10, 2017, 06:30:46 AM »
Yes, regarding post/topic  fatigue - too often these topics are simply used as excuses to do nothing. I will not do anything until I decide logic which is BS.

Remember to act! Any one of these (Vanguard, Schwab, Fidelity) if you use right products (index funds) is much better than what you have now, so stop procrastinating, decide, and move forward. Flip a coin if you have to, do not use this as excuse to pounder and contemplate.

+1.  While I obviously have chosen and support Vanguard for the reasons listed above, I'll add that Schwab or Fidelity are great choices too for low-cost index funds, and the differences between them are small.
FInally, your choice does not have to be permanent.  If 5 years down the road you decide that brokerage X really is better your choice of Y, you can initiate a transfer, and it shouldn't cost you a thing other than an hour or so of your time. Pull the trigger.

Mighty-Dollar

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Re: Index Funds, Schwab or Vanguard?
« Reply #15 on: June 12, 2017, 03:45:34 AM »
Why stop at Vanguard and Schwab. There's also iShares and SPDR.

Aggie1999

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Re: Index Funds, Schwab or Vanguard?
« Reply #16 on: June 12, 2017, 10:41:20 AM »
A ways off for the OP but SIPC insurance is also something to consider when allocating across brokerages if you have a lot of money.

http://www.sipc.org/for-investors/investors-with-multiple-accounts

Personally, I would not exceed the $500k in Vanguard like accounts or any other brokerage unless you have so much money it's not possibly to spread the accounts out.

seattlecyclone

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Re: Index Funds, Schwab or Vanguard?
« Reply #17 on: June 12, 2017, 01:54:50 PM »
Yes, regarding post/topic  fatigue - too often these topics are simply used as excuses to do nothing. I will not do anything until I decide logic which is BS.

Remember to act! Any one of these (Vanguard, Schwab, Fidelity) if you use right products (index funds) is much better than what you have now, so stop procrastinating, decide, and move forward. Flip a coin if you have to, do not use this as excuse to pounder and contemplate.

+1.  While I obviously have chosen and support Vanguard for the reasons listed above, I'll add that Schwab or Fidelity are great choices too for low-cost index funds, and the differences between them are small.
FInally, your choice does not have to be permanent.  If 5 years down the road you decide that brokerage X really is better your choice of Y, you can initiate a transfer, and it shouldn't cost you a thing other than an hour or so of your time. Pull the trigger.

Agreed. You can't really go wrong with the low-cost index funds offered by any of Vanguard, Fidelity, or Schwab. I prefer Vanguard for the reasons other people have stated, but these are all very fine options.

CrashnBurn

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Re: Index Funds, Schwab or Vanguard?
« Reply #18 on: June 13, 2017, 08:33:53 PM »
Yes, regarding post/topic  fatigue - too often these topics are simply used as excuses to do nothing. I will not do anything until I decide logic which is BS.

Remember to act! Any one of these (Vanguard, Schwab, Fidelity) if you use right products (index funds) is much better than what you have now, so stop procrastinating, decide, and move forward. Flip a coin if you have to, do not use this as excuse to pounder and contemplate.



on to specifics
1. Fidelity/Schwab provide arguably better user experience and interface according to some (myself included) and access to many products Vanguard does not do or does not want to be bothered with (credit card integration, cash management features).

2. They will never, ever be beholden to you in the way Vanguard is. they will ALWAYS be responsible to their owners/shareholders, and they will ALWAYS put interests of their owners first as they should and must do.

To me that is enough to use Schwab and Fidelity in areas I want and focus on Vanguard with everything else. Again,
a) set a first timeline for the 'decision'
b) decide (flip a coin if you must)
c) act

Thanks you for listing the biggest difference, your responses really help. My personal deadline to decide is June 30th.

CrashnBurn

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Re: Index Funds, Schwab or Vanguard?
« Reply #19 on: June 13, 2017, 08:37:37 PM »
A ways off for the OP but SIPC insurance is also something to consider when allocating across brokerages if you have a lot of money.

http://www.sipc.org/for-investors/investors-with-multiple-accounts

Personally, I would not exceed the $500k in Vanguard like accounts or any other brokerage unless you have so much money it's not possibly to spread the accounts out.

A ways off indeed, but needs to be planned for now. Thanks for this advice! When you mean a 500k limit, do you mean with a single firm or with a single fund(investing no more than 500k in the S&P500 index and the Total Stock within Vangard)?

CrashnBurn

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Re: Index Funds, Schwab or Vanguard?
« Reply #20 on: June 13, 2017, 08:41:37 PM »
Yes, regarding post/topic  fatigue - too often these topics are simply used as excuses to do nothing. I will not do anything until I decide logic which is BS.

Remember to act! Any one of these (Vanguard, Schwab, Fidelity) if you use right products (index funds) is much better than what you have now, so stop procrastinating, decide, and move forward. Flip a coin if you have to, do not use this as excuse to pounder and contemplate.

+1.  While I obviously have chosen and support Vanguard for the reasons listed above, I'll add that Schwab or Fidelity are great choices too for low-cost index funds, and the differences between them are small.
FInally, your choice does not have to be permanent.  If 5 years down the road you decide that brokerage X really is better your choice of Y, you can initiate a transfer, and it shouldn't cost you a thing other than an hour or so of your time. Pull the trigger.

This makes me feel better about making the choice. I was afraid of fees and/or tax implications of switching firms. Those are more of a problem if you change the type of account I presume.

CrashnBurn

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Re: Index Funds, Schwab or Vanguard?
« Reply #21 on: June 13, 2017, 08:49:04 PM »
Thank you everyone for posting about this! I know it's a tiring issue to continue posting about nearly identical issues, but you've all managed to sway me to invest with Vanguard. I had been leaning Schwab before posting. It's one thing to read post after post about this, but it's another get the consensus when you've put let everyone know exactly where you are when headed toward FIRE!

Just this month alone, I've managed to get my savings rate to 30%. My next hurdle is to get it to 50%.

Can't wait for my Money Mustache to catch up with my real-life handlebar.

Thanks again all!

PhysicianOnFIRE

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Re: Index Funds, Schwab or Vanguard?
« Reply #22 on: June 13, 2017, 09:29:10 PM »
I've been happy with Vanguard for years, but I don't think you'd go wrong with Fidelity or Schwab, either. All three are dirt cheap for a 3 Fund Portfolio.


Schwab:
Total Stock Market 0.03
Total International Market 0.06
Total Bond Market 0.04
Cost per $1 Million per year (1/3 in each fund): $433
 
Vanguard (Admiral Funds):
Total Stock Market Fund 0.04 (down from 0.05)
Total International Fund 0.11 (down from 0.12)
Total Bond Fund 0.05 (down from 0.06)
Cost per $1 Million per year (1/3 in each fund): $667
 
Fidelity ( Premium Class):
Total Market Index 0.045
Total International Index 0.11
US Bond Index 0.05
Cost per $1 Million per year (1/3 in each fund): $683

Tyler

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Re: Index Funds, Schwab or Vanguard?
« Reply #23 on: June 14, 2017, 09:45:59 AM »
While evaluating options, keep in mind that your brokerage and fund provider are independent variables.  There's nothing stopping a Vanguard brokerage customer from purchasing a lower-cost Schwab index fund, or vice versa.  I personally own a mix of Schwab, Vanguard, and iShares funds in my Fidelity account and would recommend focusing on the details of the individual fund rather than the name on top. 

FInally, your choice does not have to be permanent.  If 5 years down the road you decide that brokerage X really is better your choice of Y, you can initiate a transfer, and it shouldn't cost you a thing other than an hour or so of your time. Pull the trigger.

This makes me feel better about making the choice. I was afraid of fees and/or tax implications of switching firms. Those are more of a problem if you change the type of account I presume.

You have the option of transferring your funds "in kind" when you switch brokerages.  This will roll over the exact same funds to the new brokerage (assuming they offer them) and incur no tax consequences.  If you want to switch index funds, however, that will require selling them and you will have to account for the taxes. 
« Last Edit: June 14, 2017, 10:10:00 AM by Tyler »

Aggie1999

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Re: Index Funds, Schwab or Vanguard?
« Reply #24 on: June 14, 2017, 10:21:46 AM »
A ways off for the OP but SIPC insurance is also something to consider when allocating across brokerages if you have a lot of money.

http://www.sipc.org/for-investors/investors-with-multiple-accounts

Personally, I would not exceed the $500k in Vanguard like accounts or any other brokerage unless you have so much money it's not possibly to spread the accounts out.

A ways off indeed, but needs to be planned for now. Thanks for this advice! When you mean a 500k limit, do you mean with a single firm or with a single fund(investing no more than 500k in the S&P500 index and the Total Stock within Vangard)?

Checkout the link. The $500k limit ($250k cash limit) is basically by account types (i.e. separate capacities). So for example one could have a taxable account, a traditional IRA and a roth IRA with the same firm. Each account would have the $500k protection. This also extends to someone who has an individual account and a joint account.

dandarc

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Re: Index Funds, Schwab or Vanguard?
« Reply #25 on: June 14, 2017, 10:26:26 AM »
A ways off for the OP but SIPC insurance is also something to consider when allocating across brokerages if you have a lot of money.

http://www.sipc.org/for-investors/investors-with-multiple-accounts

Personally, I would not exceed the $500k in Vanguard like accounts or any other brokerage unless you have so much money it's not possibly to spread the accounts out.

A ways off indeed, but needs to be planned for now. Thanks for this advice! When you mean a 500k limit, do you mean with a single firm or with a single fund(investing no more than 500k in the S&P500 index and the Total Stock within Vangard)?

Checkout the link. The $500k limit ($250k cash limit) is basically by account types (i.e. separate capacities). So for example one could have a taxable account, a traditional IRA and a roth IRA with the same firm. Each account would have the $500k protection. This also extends to someone who has an individual account and a joint account.
This is an extremely risk-averse stance to take - worrying about SIPC limits.  For SIPC coverage to even matter, not only would the brokerage have had to fail, client assets would have to have gone missing.  That means theft or fraud in addition to the business failure.  Are you seriously worried about this happening at a place like Vanguard?

nereo

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Re: Index Funds, Schwab or Vanguard?
« Reply #26 on: June 14, 2017, 11:29:02 AM »
A ways off for the OP but SIPC insurance is also something to consider when allocating across brokerages if you have a lot of money.

http://www.sipc.org/for-investors/investors-with-multiple-accounts

Personally, I would not exceed the $500k in Vanguard like accounts or any other brokerage unless you have so much money it's not possibly to spread the accounts out.

A ways off indeed, but needs to be planned for now. Thanks for this advice! When you mean a 500k limit, do you mean with a single firm or with a single fund(investing no more than 500k in the S&P500 index and the Total Stock within Vangard)?

Checkout the link. The $500k limit ($250k cash limit) is basically by account types (i.e. separate capacities). So for example one could have a taxable account, a traditional IRA and a roth IRA with the same firm. Each account would have the $500k protection. This also extends to someone who has an individual account and a joint account.
This is an extremely risk-averse stance to take - worrying about SIPC limits.  For SIPC coverage to even matter, not only would the brokerage have had to fail, client assets would have to have gone missing.  That means theft or fraud in addition to the business failure.  Are you seriously worried about this happening at a place like Vanguard?
history is rife with examples of supposedly reputable companies that were mismanaged and wound up in bankruptcy.  Now I don't expect that to happen to any of these (least of all Vanguard since it is client-owned and offers a great deal of transparency) BUT - if I had a few million$ I would consider dividing that up over multiple accounts "just in case".  It's essentially free insurance against a very unlikely (but still possible) event.
YMMV

That doesn't sound like the OP will have that "problem" for many years. 

Aggie1999

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Re: Index Funds, Schwab or Vanguard?
« Reply #27 on: June 14, 2017, 11:40:07 AM »
A ways off for the OP but SIPC insurance is also something to consider when allocating across brokerages if you have a lot of money.

http://www.sipc.org/for-investors/investors-with-multiple-accounts

Personally, I would not exceed the $500k in Vanguard like accounts or any other brokerage unless you have so much money it's not possibly to spread the accounts out.

A ways off indeed, but needs to be planned for now. Thanks for this advice! When you mean a 500k limit, do you mean with a single firm or with a single fund(investing no more than 500k in the S&P500 index and the Total Stock within Vangard)?

Checkout the link. The $500k limit ($250k cash limit) is basically by account types (i.e. separate capacities). So for example one could have a taxable account, a traditional IRA and a roth IRA with the same firm. Each account would have the $500k protection. This also extends to someone who has an individual account and a joint account.
This is an extremely risk-averse stance to take - worrying about SIPC limits.  For SIPC coverage to even matter, not only would the brokerage have had to fail, client assets would have to have gone missing.  That means theft or fraud in addition to the business failure.  Are you seriously worried about this happening at a place like Vanguard?
history is rife with examples of supposedly reputable companies that were mismanaged and wound up in bankruptcy.  Now I don't expect that to happen to any of these (least of all Vanguard since it is client-owned and offers a great deal of transparency) BUT - if I had a few million$ I would consider dividing that up over multiple accounts "just in case".  It's essentially free insurance against a very unlikely (but still possible) event.
YMMV

That doesn't sound like the OP will have that "problem" for many years.

+1. Seems foolish to me to not take advantage of every protection you can.

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Re: Index Funds, Schwab or Vanguard?
« Reply #28 on: June 14, 2017, 11:16:12 PM »
A ways off for the OP but SIPC insurance is also something to consider when allocating across brokerages if you have a lot of money.

http://www.sipc.org/for-investors/investors-with-multiple-accounts

Personally, I would not exceed the $500k in Vanguard like accounts or any other brokerage unless you have so much money it's not possibly to spread the accounts out.

A ways off indeed, but needs to be planned for now. Thanks for this advice! When you mean a 500k limit, do you mean with a single firm or with a single fund(investing no more than 500k in the S&P500 index and the Total Stock within Vangard)?

Checkout the link. The $500k limit ($250k cash limit) is basically by account types (i.e. separate capacities). So for example one could have a taxable account, a traditional IRA and a roth IRA with the same firm. Each account would have the $500k protection. This also extends to someone who has an individual account and a joint account.
This is an extremely risk-averse stance to take - worrying about SIPC limits.  For SIPC coverage to even matter, not only would the brokerage have had to fail, client assets would have to have gone missing.  That means theft or fraud in addition to the business failure.  Are you seriously worried about this happening at a place like Vanguard?
history is rife with examples of supposedly reputable companies that were mismanaged and wound up in bankruptcy.  Now I don't expect that to happen to any of these (least of all Vanguard since it is client-owned and offers a great deal of transparency) BUT - if I had a few million$ I would consider dividing that up over multiple accounts "just in case".  It's essentially free insurance against a very unlikely (but still possible) event.
YMMV

That doesn't sound like the OP will have that "problem" for many years.

+1. Seems foolish to me to not take advantage of every protection you can.

Sometimes the time you spend protecting yourself against a potential bad thing pales in comparison to the actual risk of that bad thing happening. Not necessarily saying this is the case with SIPC insurance, but "take advantage of every protection you can" is going to lead to you spending days on the phone with insurance companies trying to get special coverage for damage from meteorite strikes, elephant stampedes, and riots resulting from Olympic figure skating judging controversies. Sometimes you just have to write certain things off as next to impossible and stop worrying about them.

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Re: Index Funds, Schwab or Vanguard?
« Reply #29 on: June 15, 2017, 08:12:22 AM »
A ways off for the OP but SIPC insurance is also something to consider when allocating across brokerages if you have a lot of money.

http://www.sipc.org/for-investors/investors-with-multiple-accounts

Personally, I would not exceed the $500k in Vanguard like accounts or any other brokerage unless you have so much money it's not possibly to spread the accounts out.

A ways off indeed, but needs to be planned for now. Thanks for this advice! When you mean a 500k limit, do you mean with a single firm or with a single fund(investing no more than 500k in the S&P500 index and the Total Stock within Vangard)?

Checkout the link. The $500k limit ($250k cash limit) is basically by account types (i.e. separate capacities). So for example one could have a taxable account, a traditional IRA and a roth IRA with the same firm. Each account would have the $500k protection. This also extends to someone who has an individual account and a joint account.
This is an extremely risk-averse stance to take - worrying about SIPC limits.  For SIPC coverage to even matter, not only would the brokerage have had to fail, client assets would have to have gone missing.  That means theft or fraud in addition to the business failure.  Are you seriously worried about this happening at a place like Vanguard?
history is rife with examples of supposedly reputable companies that were mismanaged and wound up in bankruptcy.  Now I don't expect that to happen to any of these (least of all Vanguard since it is client-owned and offers a great deal of transparency) BUT - if I had a few million$ I would consider dividing that up over multiple accounts "just in case".  It's essentially free insurance against a very unlikely (but still possible) event.
YMMV

That doesn't sound like the OP will have that "problem" for many years.

+1. Seems foolish to me to not take advantage of every protection you can.

Sometimes the time you spend protecting yourself against a potential bad thing pales in comparison to the actual risk of that bad thing happening. Not necessarily saying this is the case with SIPC insurance, but "take advantage of every protection you can" is going to lead to you spending days on the phone with insurance companies trying to get special coverage for damage from meteorite strikes, elephant stampedes, and riots resulting from Olympic figure skating judging controversies. Sometimes you just have to write certain things off as next to impossible and stop worrying about them.

Of course. In this case I was talking about SIPC insurance. The extra time spent managing a few brokerage accounts is pretty minimal IMO compared to sticking with one brokerage and going over the SIPC limits. Also, doesn't really cost you any extra money.

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Re: Index Funds, Schwab or Vanguard?
« Reply #30 on: June 15, 2017, 08:37:15 AM »
Sometimes the time you spend protecting yourself against a potential bad thing pales in comparison to the actual risk of that bad thing happening. Not necessarily saying this is the case with SIPC insurance, but "take advantage of every protection you can" is going to lead to you spending days on the phone with insurance companies trying to get special coverage for damage from meteorite strikes, elephant stampedes, and riots resulting from Olympic figure skating judging controversies. Sometimes you just have to write certain things off as next to impossible and stop worrying about them.
Just to add to your point - most of the major brokerages have already done this work for you for the specific issue raised.  SIPC excess coverage, usually from Lloyd's of London.  Quick googling indicates all 3 brokers discussed in this thread have this coverage - Vanguard, Schwab, and Fidelity.