The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Corrugated Ironic on April 01, 2017, 12:16:10 PM
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Schwab published this fee schedule recently: https://www.schwab.com/public/schwab/nn/m/indexfunds.html (https://www.schwab.com/public/schwab/nn/m/indexfunds.html) Looks like their fees have dropped significantly.
So my basic understanding of Schwab & Vanguard is they do fairly similar things, and generally are both decent options for index funds. I see a lot on the blog & here on the forums about Vanguard (including the S vs V thread from feb 2015). I have a Schwab account I've been using for a few years- is there any reason for me to look into opening a V account as well?
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As long as you are using Schwab's low fee offerings then you are ok.
Fidelity, Schwab, and Vanguard "all have good offerings." Vanguard is better than both Fidelity and Schwab at "having all good offerings."
E.g., see Other than Vanguard, Boglehead-style (https://www.bogleheads.org/wiki/Three-fund_portfolio#Other_than_Vanguard.2C_Boglehead-style).
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I have a Schwab account I've been using for a few years- is there any reason for me to look into opening a V account as well?
Absolutely not. Schwab offers lower fees and top-notch customer service. Vanguard offers a great governance structure, but somewhat higher fees and poor customer service (comparatively). I've been a client of both. My recommendation is to stick with Schwab unless this situation changes.
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Don't forget SPDR and iShares.
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Vanguard, Schwab, and Fidelity are all good options, the three of them plus the online trading platforms completely changed this industry in one way or another.
I use Fidelity, solid all-around brokerage. ITOT is their total stock market ETF with a 0.03% fee ratio and can be purchased commission free. IVV is their S&P 500 fund, 0.04% expense ratio with no fee.
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Replacing my post with correct information per Radagast's point:
Schwab's OneSource does NOT include iShares.
Fidelity offers iShares for $0/trade,
TD Ameritrade offers some (but not all) iShares for $0/trade,
Schwab charges for each iShares trade.
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I use Fidelity, solid all-around brokerage. ITOT is their total stock market ETF with a 0.03% fee ratio and can be purchased commission free. IVV is their S&P 500 fund, 0.04% expense ratio with no fee.
ITOT is not Fidelity's total stock market ETF - it's actually available to anyone, and in particular I believe it's free to trade at Schwab as well. Buying iShares ETFs is not a reason to pick Fidelity.
Actually it is only free to trade at Fidelity. Schwab has a lot of commission free ETF's including SPDR funds that have even lower expenses, but not iShares. But I agree that with commissions at most places being only five dollars or so, there is not a compelling reason to stick with a particular company. Heck you can get Vanguard ETF's at either Fidelity or Schwab for $5.
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I guess my point was once you're with Fidelity, Schwab, or Vanguard, its really more of a pain in the ass than it is any cost savings for switching. You're splitting hairs if you're debating switching from one to another.
I'm personally a fan of Fidelity, had them for 10 years and have enjoyed the convenience of a local office the 3 times I've needed it.
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Surprised there isn't more love given to Merril Edge. If you have a Bank of America checking account, it links up for instant money transfers (meaning $ available to trade instantly) and if your portfolio is over $50k (including BoA checking, savings, and Meryl money combined) you get 30 free trades a month, with a 100k, 100 free trades a month. For indexers on this site that's more than enough. I haven't paid for a trade in years. Seems crazy to when you can get it free. Been sticking to Vanguard ETF versions mostly, but everything is offered for free trades. The platform is great for my purposes.
Agree that transferring might not be worth it...but something to think about if you trade a lot and are using BoA anyway or have 50k and are looking for free and seamless investing between bank and broker.
Btw, I use this for my taxable account only. Have fidelity for my 401k and Roth IRA. In fidelity accounts you are forced into iShares or their versions of the various index etfs to be free. They have many equivalents to Vanguard etfs as mentioned above so hasn't been too much trouble to avoid fees there either, but it does limit your fee-free choices.
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i just moved some accounts out of schwab to vanguard. i had a 401k with schwab and a brokerage account. i am trying to consolidate in vanguard funds.
schwab's website is much, much better than vanguard. they make it very easy to trade. too easy for me. they are only lower fees for schwab products, which are not bad if you are in etf's. i want to use mutual funds for my long term accounts precisely because it is more difficult to trade and it's harder/less satisfying to make spur-of-the-moment decisions
i also prefer vanguard's ownership structure
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Currently hold 800k in my 401k with Schwab. Figured I'd consolidate with Vanguard who holds our Roth IRA and taxable account. New lower rates at Schwab could change my mind.
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I'm in the process of leaving eTrade for Schwab. Their trades fees are cheap, they have low fees for their indexes and $500 bonus for transferring >$100,000 is the highest that I've seen going on right now. We'll see how it goes but I'm kind of impressed so far.
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Surprised there isn't more love given to Merril Edge. ... and if your portfolio is over $50k (including BoA checking, savings, and Meryl money combined) you get 30 free trades a month, with a 100k, 100 free trades a month.
+1 for Merrill Edge.
I also like the 50% booster to the credit card rewards, so the 1-2-3 cash rewards card is 1.5% on everything, 3% on groceries, and 4.5% on gas. When gas is $2 a gallon, I'm getting $0.09 in cash rewards per gallon, so I'm not complaining.
The small bonus of the preferred rewards platinum (the 50k one).
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I get the best of all worlds. The bonus and current century website and customer support with Schwab along with the ability to collect a bonus when opening. But wait......I can do the same thing with TDAmeritrade and buy any of a dozen Vanguard ETFs for the same ER that I would pay within Vanguard. So I did both, collecting bonuses coming into TDA (for me and for my wife) and buy VTI. Wow.....I can buy securities issued by the caring mother while getting current century web interface, 24/7 support and (gulp) online chat. I think I'm going to cry, I'm so happy.......