Stick with Fidelity or open Vanguard account?

[RJC]

Hello,

I'm thinking about opening a new taxable account for a total market index fund (or ETF). Is Vanguard that much better than a comparable fund at Fidelity (all my work accounts are there)?

Thanks!

[jacoavluha]

Hello,

I'm thinking about opening a new taxable account for a total market index fund (or ETF). Is Vanguard that much better than a comparable fund at Fidelity (all my work accounts are there)?

Thanks!

No. But I guess you have to define "that much."

[RJC]

Hello,

I'm thinking about opening a new taxable account for a total market index fund (or ETF). Is Vanguard that much better than a comparable fund at Fidelity (all my work accounts are there)?

Thanks!

No. But I guess you have to define "that much."

Hmm I guess it's not easy to define but it just seems like folks on this forum (and Bogleheads) rave about Vanguard vs other brokerage firms. Maybe expense ratios and overall customer satisfaction?

[Another Reader]

Lots of people don't rave about their customer service.  Fidelity has a better customer interface, easier to use tools, cheap index funds and people that can actually help you.  Vanguard is fine until you need customer service type help.  Then they are completely useless.  Fidelity also has bricks and mortar offices, where you can go in, sit down with a generally intelligent person, and get things fixed.

[Telecaster]

Hello,

I'm thinking about opening a new taxable account for a total market index fund (or ETF). Is Vanguard that much better than a comparable fund at Fidelity (all my work accounts are there)?

Thanks!

The conventional wisdom is no longer correct.   At one time (and for a long, long time) Vanguard was the hands down best low fee brokerage.  The key to investing success is minimizing fees and Vanguard is the leader in low cost index funds.  The secret got out, and Vanguard has experienced almost unbelievable growth, and accordingly scooped up amazing amounts of market share from its high cost competitors. 

Fidelity and others have responded by desperately slashing fees, to the point where I think Fidelity is the currently the better value.  Fidelity has a number of zero fee index funds, with zero minimums to invest, zero fee HSA, etc.  Plus excellent customer service, which you would expect from a high fee brokerage.  If you already have an account at Fidelity, that's just fine. 


 

[terran]

If I had accounts at Fidelity that I couldn't move (which I do) I would have all other accounts there (which I do). Same for Vanguard.

[MustacheAndaHalf]

I've heard of advantages at other brokerages - Schwab is better for withdrawing money internationally, Fidelity has better service / web interface than Vanguard.

I currently prefer buying/selling ETFs.  Several months ago Vanguard made ~1800 ETFs cost $0/trade.  You you can buy iShares, Schwab, or other ETFs at no cost.  It might have caught Fidelity and Schwab by surprise - I haven't heard of them doing something similar so far.

If you're careful about looking at expense ratios, I'd recommend staying at Fidelity.  Vanguard is easier since they aim for low expense ratios on every fund, rather than just a subset.  For example, if you look at Fidelity's target date funds, you will find some cheaper than 0.25% and some cost more than 0.50%/year.  So make sure you pay attention to expense ratios.

[RJC]

Thanks everyone. This has been helpful!

[thesis]

I've been wondering about this, too. Maybe I've been brainwashed by the FI community *snicker*, but I took the Vanguard route as well and have liked it, but the no-fee ETFs at Fidelity are appealing since I don't yet have a taxable account. I prefer filling up the tax-sheltered accounts first, so it's kinda painful to think I need $1k at the least, but more commonly $3k just to get started in a real fund if I want to do that at Vanguard. But I really need to double check this, it sounds like many changes have been made. They did remove a good number of Investor shares and replaced them with Admiral shares at the lower expense ratio. I bet this was a push to stay competitive. My $5k in VTSMX switched to VTSAX, I was pretty happy with that.

My company recently switched to Fidelity for their 401k plan. This was extremely annoying to me, and of course they make it difficult for you to do transfers/rollovers to any account that isn't also Fidelity, which pisses me off. "Contact a service representative!" "No, f- you, this is my money and I control where it goes!" You get the idea. I need to roll over some Roth 401k money into my Roth IRA. And I hate calling people.

Yeah, the Vanguard site isn't the best, but it sure beats the ticker puke you get at discount brokers like TD Ameritrade, which I have as part of my HSA. Makes my eyes bleed. Once you get used to Vanguard, it's fine, and if you are keeping your investments simple, you don't need anything fancy anyway.

Dang, I think I'm a little on edge today, this post is coming across a bit sharp. Anyway, Fidelity has stayed competitive, so I'm almost considering making life easier by keeping some of my money with them, too. We'll see.

[OurTown]

Lots of people don't rave about their customer service.  Fidelity has a better customer interface, easier to use tools, cheap index funds and people that can actually help you.  Vanguard is fine until you need customer service type help.  Then they are completely useless.  Fidelity also has bricks and mortar offices, where you can go in, sit down with a generally intelligent person, and get things fixed.

This.  We have used the brick and mortar on a couple of occasions for things we couldn't figure out online.

[KarefulKactus15]

Fidelity is good if you already have them.

Vanguard it great also.   

[Blueberries]

If I had Fidelity, I'd probably stick with them because I like simplicity.  I have retirement with Vanguard because I like the historical data on my fund and a taxable account with Fidelity for my children ($0 fees and $0 minimums on certain funds).

[dude]

Saw article recently on how Fidelity has a structural advantage and will be able to reduce fees below Vanguard's (as they have for many). I'm still Vanguard and don't plan to switch, but for sure Fidelity is a valid competitor to Vanguard now.

[Telecaster]

Yeah, the Vanguard site isn't the best, but it sure beats the ticker puke you get at discount brokers like TD Ameritrade, which I have as part of my HSA. Makes my eyes bleed. Once you get used to Vanguard, it's fine, and if you are keeping your investments simple, you don't need anything fancy anyway.

Fidelity has a no-fee HSA account, FWIW.  And you can change your HSA away from your employer's provider.