Vanguard vs Fidelity: Broker Comparison
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With small and large account numbers, Vanguard and Fidelity manage trillions of dollars.
They each have their strengths, but their main bread and butter is mutual fund portfolios for long-term investors. While Vanguard has been a brokerage for much longer than Fidelity, the ladder receives more praise for its tools, mobile app, and low fees.
Fidelity may be making some big changes anyway after announcements in November 2019 of a Schwab-TD Ameritrade merger. How will the intuitive online broker stack up to Vanguard?
Highlights of Vanguard and Fidelity
- Best option for passive or “set-it-and-forget-it” investors
- Helps you save on taxes and earn more towards retirement
- Offers a ton of tools to plan for long-term retirement
- Low-cost for Vanguard mutual funds
- Includes a mobile app to check on your portfolio and make some simple trades
- Terrific value for beginner to advanced investors
- Works well for active investors and passive investors
- More screeners, real-time data, and customizable charts
- Mobile app offers more comprehensive tools and real-time quotes
- You can access all of the trade types on desktop and mobile
- More customer support options for online users via chat and social media
Trading Experience: Vanguard vs Fidelity
Vanguard focuses most of its power around long-term investments and retirement plans. High wealth investors can grow their net worth considerably with the brokerage. However, it lacks trading technology for active investors.
Karin Risi, who is the managing director of Vanguard Retail Investor Group, said this about the company’s ideal customer, “We do not attract the short-term traders.” We do not put out lots of tools and calculators to facilitate short-term trading.”
One of the biggest differences is that Vanguard does not have a streaming quote widget, and you cannot create any customizable charts. Instead, you have to manually refresh to check out rates.
There are only simple options available, too. If you want to trade with more complex stocks or market orders, then Fidelity is definitely the better option. When it comes to buying stocks and trading, there’s no doubt, Fidelity in our top online stock brokers list.
The trade execution engine with Fidelity is considered extremely fast and accurate. There is a high probability that investors improve their position with the way that Fidelity executes trades.
In addition, Fidelity offers the Active Trader Pro advanced platform, which has streaming quotes, more data, and customizable charts. You can check order tickets and set up automatic orders as well.
To put it simply:
Who should use Vanguard?
- Long-term, passive investors
- Investors who want better mutual fund options
- Those who want a simpler trading experience
- Investors who want a more hands-on retirement broker
Who should use Fidelity?
- Active and passive investors who want access to a wide variety of stocks, mutual funds, options, and ETFs
- Investors who want streaming real-time data
- High-velocity traders who want a low-cost platform with excellent trade executions
Mobile Platform and New Technology
There are stock trading apps available for each of these brokerages. Vanguard offers several mobile brokerage options for iOS, Android, and Kindle users.
The phone app is much easier to use than the Vanguard website, in fact. They also added a few conveniences, such as a mobile check deposit. However, the quotes are still delayed, and you cannot contact customer service through the app either.
In comparison, Fidelity has newer apps with more tools and capabilities for active traders. You can also customize the home screen of the app so that it shows your current trades, charts, specific trends, or something else.
There are also more education and tips available when placing a ticket order. If you generate watchlists on the desktop, these sync up to the mobile app.
Best of all, you can trade all of the products available on the desktop with the mobile version of the brokerage too.
Quick comparison of mobile apps from Vanguard and Fidelity:
Vanguard’s mobile app offers:
- Access for iOS, Android, and Kindle Fire users
- Very simple to use and useful for checking balances
- Data is not delivered in real-time, no streaming quotes
- Mobile check deposit included
Fidelity’s mobile app offers:
- Streaming quotes, data, and more research tools
- Customizable news feed
- Customizable home screen
- Watchlists and syncing across platforms
Education, Research, News, and Trends
There are a ton of retirement planning tools available from Vanguard. The brokerage offers a stock screener, but if you trade in ETFs, there is a separate screener tool that works better.
The mutual fund screening tool prioritizes Vanguard funds though there are many other options and fund families. You can research some options, but you can only find options chains, which does not help you as much as newer options tools from Fidelity.
In comparison to Fidelity, Vanguard’s charting tools are pretty basic, and users cannot customize any of the charts or set up technical studies. There are some calculators and retirement planning tools, but these may not be updated with the best data available.
Fidelity has newer screening tools that can be used to research every part of your investment. You can research across all asset classes, including options, stocks, ETFs, mutual funds, and fixed income.
Their charting tools are proprietary and enriched with Recognia’s technical patterns and real-time events. With an Active Trader Pro subscription, users can also set up more streaming news feeds and use Bloomberg TV for their dashboard.
Fidelity’s stock snapshot pages also have other trends and news from social, environmental, and governance perspectives with ratings from MSCI.
With these tools, Vanguard investors can:
- Monitor their retirement and long-term portfolios with dashboard tools
- Use stock, ETF, and mutual fund screeners to set up trades
- Get basic charting abilities to see how major stocks and mutual funds may or may not help their portfolio
- Not customize their charts, technical analysis, or testing options such as simulated trade strategies
With Fidelity, investors can use the following tools and research options:
- All screeners available from above, plus options and fixed income screeners
- Real-time data and trends to ensure socially responsible investments
- Customizable charts with in-depth technical analysis and data from Recognia
The education options for Vanguard are pretty basic and designed for long-term investors who do not want to get complicated with their trading. There are some webinars, but much of the content is older and focuses on retirement planning. However, it’s the most basic offering in comparison to Fidelity.
Fidelity has a full learning center that has hundreds of articles, videos, infographics, and webinars to help you understand all kinds of assets, trading strategies, tools, market trends, and so forth. You can check out tutorials on options trading or look at fixed income selections. There are also technical analysis tools and retirement planning guides.
Many of these learning programs are suitable for beginners and intermediate investors, but you can sign up for online coaching sessions or talk to an advisor for more information. Fidelity can help you to grow from a beginner into an advanced trader, which is why Fidelity is in our top online stock brokers for beginners list.
Vanguard’s education tools offer:
- More explanation of retirement options and benefits
- Rudimentary articles and older webinars
- Some advanced investment tutorials for retirement accounts like IRAs and Roth IRAs
Fidelity’s education tools offer:
- A full learning center with updated articles, guides, videos, webinars, and tools
- Lots of topics ranging from investing to tax exemptions to trading strategies
- Mobile users can access the education center on the mobile app
Retirement and Mutual Funds
Vanguard and Fidelity both have a potential retirement account options, and that’s the reason why they are some of the top brokers for Roth IRAs. Vanguard is known for its retirement tools and extensive mutual funds, so how does Fidelity stack up?
Fidelity was the first broker to offer market index funds with no expense ratio through the Fidelity Total Market Index Fund, Fidelity Zero Large Cap Index Fund, Fidelity Zero Extended Market Index Fund, and Fidelity Zero International Index Fund. You can build a retirement portfolio entirely with zero expense ratio funds. You also have access to the most no-transaction-fee funds with over 3,500 offers.
In comparison, Vanguard may have more mutual funds, but Fidelity also offers tools like the Fidelity Government Money Market Fund, which offers a 1.61% interest rate (October 2019).
Vanguard offers some website security including encryption and a security challenge if you log in from an unrecognizable device.
Fidelity analyzes every login attempt and has a risk assessment feature to ensure that users are logging in from a recognized location or device. You may receive a challenge with two-factor authentication or see a security question if you try to access your account from a different location or device.
In essence, Fidelity does a slightly better job with security due to its two-factor authentication and security process.
Vanguard offers tiered customer service and support, which means that you may not be able to reach an advisor if something goes wrong with your accounts. In fact, the type of service you receive is based on your account balance. Their customer support line by phone is open from 8:00 AM to 10:00 PM, Monday through Friday. There aren’t any online chat tools available.
Fidelity offers way more access to customers who need help. You can use the online help center, or you can visit one of 200 investor centers located around the US. Their team also replies to messages on Facebook, Google Assistant, and Amazon Alexa. You don’t have to have a very high account balance to get in touch with someone to help you.
FAQs About Vanguard and Fidelity
Is Vanguard easier to use than Fidelity?
This depends on the type of investor you are. Ultimately, Vanguard has simpler tools, and it’s easy to place orders for traditional stocks and mutual funds. However, Fidelity offers more analysis, tools, and customization for market orders. You can also access and order all types of trades through Fidelity’s mobile platform.
What brokerage is better for retirement: Vanguard or Fidelity?
Duke University published a report on Vanguard and Fidelity, comparing their performance on 21 different mutual funds. Their comparisons were based on overall cost, efficiency, diversification, benchmarks, and tracking precision.
The report revealed that Vanguard was better for retirement after-tax returns were filed and offered more tax efficiencies than Fidelity. In addition, Vanguard had more diversified portfolios. However, Fidelity had a higher tracking precision, and their offerings work better if you want certain sectors, smart beta, or actively managed portfolios.
Which Costs More: Vanguard vs. Fidelity
Vanguard Costs More Than Fidelity
In a day and age where many brokerages have reduced commission fees to nothing, Vanguard is still charging $7 per trade for the first 24 trades, then $20 after if you have an account balance under $50,000. For accounts with over $50,000 but under $500,000, you’ll be charged $7 per trade. For account balances over $500,000 to $1,000,000, the cost of each trade is $2. Trades are free for the first 25 if you have an account balance over $1,000,000.
You also pay $7 plus $1 per contract for options trades. For no-transaction-fee mutual funds, you’ll pay $0, but you’ll pay $20 if you have an account balance that is less than $500,000. Broker-assisted trades also cost $25.
There are 1,800 commission-free ETFs available, but these are offered through other companies affiliated with Vanguard. There are no inactivity fees or minimum deposits required with Vanguard, but they do charge a $20 per year maintenance fee. You can have this fee waived if you choose e-delivery and maintain at least $10,000 in Vanguard ETFs and mutual funds.
When it comes to no commissions and trade order execution Fidelity is a highly rated broker and also in our top 5 discount brokers list.
In comparison, Fidelity did away with all their trade fees in 2019. You pay $0 per trade for ETFs, stocks, and most mutual funds. For options, you’ll pay $0 per online trade plus $0.85 per contract. With 0 commission fees, more than 3,500 transaction fee mutual funds and several commission-free ETF funds and its special Fidelity Zero index funds, which have no expense ratio and no minimum investment amount, Fidelity is in the top 10 free stock trading brokers. You can also find Fidelity in our top brokers ETFs for online investing list.
There are some requirements to use the desktop mobile app. These terms stipulate that a Fidelity Active Trader Pro member must trade at least 36 times or more in a rolling 12-month period.
Ultimately, the winner between Vanguard and Fidelity depends on how you look at investing, but even with all of their retirement planning tools and a decent rate of return, Fidelity offers the ability to plan for retirement and use the latest tools to test your strategies and possibly expand your portfolio.
Vanguard is best for long-term mutual fund investors who really like Vanguard-sponsored trades. However, in-depth research tools, customizable charts, and a great mobile app make Fidelity the ideal online brokerage for today’s investors.