Author Topic: Schwab or Vanguard?  (Read 1010 times)

We be free if we try

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Schwab or Vanguard?
« on: July 15, 2020, 10:26:33 AM »
Iíll be transferring accounts from an inheritance that doubles my NW and will be newly semi-retired. Will also be sellling our house within a year, so the overall balances will be much higher. My current personal accounts are with Schwab. Iíve been happy with Schwab but is there a benefit to switching to Vanguard? For the new funds only, so that the whole nest egg is parked in more than one spot, or just keep everything in one place or the other? Iíll be selling virtually all the inherited investments and starting over with index funds/bond funds.
Thanks!

MustacheAndaHalf

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Re: Schwab or Vanguard?
« Reply #1 on: July 15, 2020, 11:01:52 AM »
Are you comfortable buying "exchange traded funds" (ETFs) like SCHB or VTI?

Those can be purchased for $0/trade at both Vanguard and Schwab.  You can buy Schwab's ETFs at Vanguard, and Vanguard's ETFs at Schwab.  Or buy iShares ETFs at either place.  If you instead buy mutual funds, you will need to see what Schwab offers first.  Probably enough low cost options, but I'm not sure.

I've heard Schwab has a better website / interface, and if you like to travel Schwab provides no fee ATM withdrawals around the world.  I would only switch if you strongly prefer Vanguard's mutual funds, and won't be buying ETFs.


We be free if we try

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Re: Schwab or Vanguard?
« Reply #2 on: July 15, 2020, 04:49:38 PM »
Thanks. I guess I have this feeling of not quite understanding ETFís, even though Iíve read some basic articles about them. Like, I donít quite know what the real difference for me would be between VTSAX and VTI, if the expense ratio is the same. Do they generate different tax scenarios? Most of this money would not be in tax-advantaged accounts.

jinga nation

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Re: Schwab or Vanguard?
« Reply #3 on: July 15, 2020, 05:02:40 PM »
My 2 cents:
I have all my accounts at Vanguard.
A couple of years back we were given a large sum of money from wife's parents, and I opened a Schwab brokerage account. I loved their interface, their trading tools are miles ahead of Vanguard - playing with them was tempting myself to go into trading, stock-picking, you name any deviation from DCA and lazy passive investing.
What made me NOT move the funds into Schwab was the weekly phone calls from an advisor, daily emails even though I thought I had turned off all notifications, etc., and a constant up-selling of advisory products.
It made me reflect that as a barely qualified Vanguard Flagship client, I've received zero phone calls to try/buy advisory products. I've had Vanguard since 2010 via a 401k, and at the most I've received a couple of postcards/emails a year to try their advisory service.
For this reason alone, and to continue DCA into index funds, I decided not to use Schwab.
Your situation is different, but Chuck is a salesman, he loves to sell you a good deal.
Now, if I was into trading with ETFs, I'd definitely use Schwab or TD or Interactive Brokers instead of Vanguard.

FINate

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Re: Schwab or Vanguard?
« Reply #4 on: July 15, 2020, 05:04:16 PM »
I strongly prefer the ownership structure of Vanguard, effectively owned by its customers, over the other publicly traded investment banks. IMO this results in less shenanigans to "up-sell" to more profitable products.

MustacheAndaHalf

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Re: Schwab or Vanguard?
« Reply #5 on: July 15, 2020, 09:30:16 PM »
A mutual fund waits until markets close, and then it figures out how many people are buying shares and how many people are selling.  The fund itself handles the work of handing out new shares, or selling assets to meet the needs of those selling shares.

An exchange traded fund trades like Ford or Amazon - it's listed on the stock market.  You can enter the symbol VTI at any brokerage, and buy shares of Vanguard Total Stock Market ETF.  So instead of Vanguard dealing with people buying and selling, the stock market handles it.  When demand gets too high, huge institutional investors create more shares from the underlying stocks (they are approved by Vanguard to do that).

In theory, if lots of people redeem shares from a mutual fund, it could cause the fund to realize capital gains and impact other investors.  In practice, I don't think it's significant.

We be free if we try

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Re: Schwab or Vanguard?
« Reply #6 on: July 16, 2020, 09:02:30 AM »
Thanks everyone. This is helpful, though Iím still not sure which way Iíll head. I also hate upselling, but have never had this issue with Schwab (once I firmly told an advisor I wasnít interested) - maybe I didnít have enough money to trigger it yet.

jinga nation

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Re: Schwab or Vanguard?
« Reply #7 on: July 17, 2020, 01:03:22 PM »
Schwab were already trying to upsell me on various products and services when my new account was zero balance, before I transferred in the funds (and they were supposed to go into a lazy portfolio).

Imagine what they'd be trying to sell me once they see the value and contents of my portfolio. Oh, the horror.

joe189man

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Re: Schwab or Vanguard?
« Reply #8 on: July 17, 2020, 01:53:23 PM »
What about Fidelity? anyone have a comparison?

dizzy

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Re: Schwab or Vanguard?
« Reply #9 on: July 17, 2020, 02:57:46 PM »
Schwab is more focused on the value investor.  There was a low requirement to start compared to vanguard, which was very discouraging for me.  They wanted $3k, Schwab gave me a $100 bonus to deposit just $1k.  They now offer "stock slices"
The interface is very easy to navigate/visually pleasing, and it's been easy to set up my SEP IRA and solo401k accounts with them.  Chat help is really good.  I've never had issues with people trying to sell me stuff, and I don't think I've ever had a phone call with them.  They also offer a platinum amex card (you need to have Schwab brokerage to apply) and it's sweet since the points can be deposited directly into your account.  Lastly, I could (theoretically) go to their physical office in my city, it's only a few blocks from my work.  I've been there before to get forms, no problem, friendly folk.


My bf uses vanguard and struggles with it, I agree it's not quite as user friendly.

I have fidelity for my HSA this year and I do like it, but only because of its zero-fee index funds.  I'm not parking tons of money there so that's great for me.
« Last Edit: July 17, 2020, 03:00:04 PM by dizzy »

DrinkCoffeeAndStackMoney

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Re: Schwab or Vanguard?
« Reply #10 on: July 22, 2020, 08:58:37 AM »
I've had Schwab accounts for a few years and I'd highly recommend them to anyone.
It's a very easy to use and straight forward app/website with lots of useful tools and information.
I've had exactly one email and one phone call since joining Schwab and I made it perfectly clear both times that I'd be managing my own accounts and that I wanted zero contact from "advisors" gong forward; it's been crickets ever sense.

iris lily

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Re: Schwab or Vanguard?
« Reply #11 on: July 22, 2020, 09:29:31 AM »
Crap, this thread is both good and bad. Iím just ready to walk over to Vanguard online and open an account. Now I wonder if I should do Schwab. Iím a very basic investor. I donít need a lot of tools. But I do want an interface that makes sense because I have tired of trying to figure stuff out.

Sibley

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Re: Schwab or Vanguard?
« Reply #12 on: July 22, 2020, 12:51:53 PM »
I've used Fidelity, Schwab, and Vanguard. Honestly, I can't figure out any of their websites because I don't care enough to bother. Vanguard is the nicest at walking me through the mechanics.

Fidelity left me alone pretty well. Vanguard is good too. Schwab wasn't my account, but my dad was annoyed at all the contacts.

I personally like Vanguard's ownership structure. Fidelity has lowered their costs, but since it's an effort to be competitive, they could raise expenses at any time. I don't feel the same worry with Vanguard.

brandon1827

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Re: Schwab or Vanguard?
« Reply #13 on: July 23, 2020, 01:33:45 PM »
Completely new to personal investing. I've always just had my retirement group take care of my pension funds and 401K. I'm considering a job-change that would allow me an opportunity to take these funds and put them somewhere else/invest them myself and I'm essentially going from ground zero and gathering as much information as I can about how the game is played. I read through a thread on Betterment from a few years ago on this site, and am now gathering data on Vanguard, Schwab, etc. Just wanted to comment mostly so that I could follow this discussion. Best of luck to everyone

Aggie1999

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Re: Schwab or Vanguard?
« Reply #14 on: July 23, 2020, 01:46:17 PM »
Vanguard, Schwab and Fidelity are all fine for the long term index fund investor this forum targets. I personally like the simplicity of mutual funds more than ETFs and like Vanguard mutual funds the best so I would start with them as a beginning investor.