Vanguard vs Fidelity

Vanguard vs Fidelity


Compare Fidelity Investments versus Vanguard - which is better for fees, IRA/Roth accounts, online stock trading, and mutual funds investing in 2020?



Fidelity vs Vanguard Comparison For 2020


Fidelity offers $0 commissions on stocks for all its customers. At Vanguard, most investors have to pay fees on stock trades. Does this mean Fidelity is lower quality? Here’s the answer:


Pricing


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Fidelity $0 $49.95 $0.65 per contract $0 $0
Vanguard $0 $20 $1.00 per contract $20* $20*
Ally Invest $0 $9.95 $0.50 per contract $0 $0


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Fidelity
Vanguard
Ally Invest


Available Investments


At Fidelity, there are several investment vehicles that can be bought and sold. The brokerage house offers trading in fixed-income assets, equities, ETF’s, closed-end funds, mutual funds, IPO’s, option contracts, and precious metals. And when we say equities, we’re including penny stocks and over-the-counter offerings.

Vanguard has a similar smorgasbord of tradable instruments without the precious metals. We didn’t find as much information on IPO’s on Vanguard’s site, which is probably a bad sign.

Fidelity wins the first category.


Option Trading


During our inquiry, we found some really good derivative tools at Fidelity. On its website, there is a profit-loss estimator. It can display a small graph on a proposed option trade. The evaluation price can easily be adjusted, and the entry can be inverted.

Besides the P/L tool, there are also option chains. Calls and puts can be individually selected, and there are several multi-leg plays in the strategy drop-down menu.

On Vanguard’s site, there are calls and puts, and that’s it. Besides the lack of complex strategies, there are also no special evaluation tools.

Fidelity easily takes this category.


Global Stocks


Vanguard customers can tap into the global economy by trading American Depository Receipts and a small number of penny and OTC stocks. The brokerage firms also manages an ETF that invests in foreign stocks (top holdings include Toyota, Royal Dutch Shell, and Taiwan Semiconductor).

Fidelity does all of the above. Plus, it offers a global stock trading account that has access to several foreign equity exchanges. Trades are placed in each national currency. There are 16 in total. The account is a discrete account. There are no account fees, but the broker does charge commissions on trades.

Fidelity is the victor here.


Research and Education


On Vanguard’s website, we discovered a moderate amount of learning materials. These are mostly in article format; although the company does have a YouTube channel with a long list of videos.

The broker’s articles cover topics like 529 plans and managing household liquidity. Videos are typically just a few minutes long and discuss issues like taxation and the benefits of ETF investing.

Stock profiles at Vanguard have a moderate amount of information on them. The broker offers free reports from MarketGrader and Argus.

Fidelity offers reports from roughly 13 analysts. Some of the available choices include Thomson Reuters and Ford Equity Research. Profile pages have much more data on them compared to Vanguard’s profiles. For example, we found social sentiment, upcoming events, and technical analysis.

As for general investing education, Fidelity has videos, articles, infographics, webinars, and in-person study sessions. There are classes for beginners; and we really like its network of branch locations that can be of service to customers who need a little extra help. Like Vanguard, Fidelity has a YouTube channel with lots of helpful videos.

Another loss for Vanguard.


Websites


Vanguard’s website is pretty basic. There is no trade bar or browser platform; and quite frankly, we found it difficult at times to navigate. A search box in the upper-right corner makes finding resources a little easier.


Vanguard vs Fidelity Investments


Charting is on a very undeveloped level. A graph cannot be displayed the width of the monitor, and there are only 11 technical studies. A chart cannot be detached or saved. On the plus side, there are 4 chart styles and 3 company events. The website’s trade ticket has 4 order types and 2 duration choices.

Fidelity’s trade ticket offers 8 order types and 5 duration choices. It is a pop-up window that appears after clicking on a buy or sell button. We did not find it bothersome, although a trade bar would probably be a better method.


Fidelity Investments vs Vanguard


A chart on Fidelity’s site can be shown the full width of the monitor. It can be detached into its own window, exported, and saved. There are 6 display styles and around 40 technical studies. Bar colors can be changed.

Fidelity again.


Desktop Software


Fidelity customers can use Active Trader Pro, a desktop platform that comes with no account minimums or trading requirements. During our test drive of the software, we found it easy to use but advanced at the same time. Some of the features worth mentioning include the ability to route orders to specific venues, paper trading, and Level II data. Bloomberg streams in high definition, and the feed can be shown in full-screen mode.

Vanguard doesn’t have desktop software; so it loses another category.


Mobile Trading


The Vanguard mobile platform has a check deposit tool and a watchlist. There’s not much else positive to say about the app. Video news, charting, and alerts are strangely absent.


Vanguard or Fidelity Investments


Fidelity once again provides free access to Bloomberg Business News. Charts come with tools, and it’s easy to add alerts to a stock, or to put it on a watchlist. Mobile check deposit is free, and any brand of mutual fund can be traded. (On the Vanguard app, only Vanguard-branded mutual funds can be traded.)


Fidelity Investments or Vanguard


Fidelity once again.


Managed Accounts


Investors who prefer professional management to their own judgment can open managed accounts at both brokerage firms. While we were impressed with both companies’ self-directed tools and services, there are some really good portfolio management services at low cost.

Vanguard customers can sign up for an investment advisory service that starts at just 0.30% and drops to 0.05% for balances above $25 million. There is a $50,000 account minimum to begin the service. For the very low management fee, the service includes a financial plan and a one-on-one working relationship with a human advisor (over the Internet). There is no robo service.

Fidelity does have a robo service, and it only costs 35 basis points per year. There is a $10 minimum to start. Only low-cost mutual funds are traded. Customers who want a wider selection can sign up for one of the broker’s old-school packages. The cost varies between 0.20% and 1.50%. Minimum investments range from $50,000 to $200,000.

The robo service gives Fidelity a slight edge here.


Other Services


Both companies in this appraisal provide DRIP service at no cost. They also offer periodic investing in mutual funds; although Vanguard only permits this into Vanguard-branded mutual funds. They both also offer IRA’s and self-employed 401(k)’s.

Fidelity once again barely takes the victory.


Our Recommendations


Mutual Fund Traders: We recommend Fidelity. The broker offers Fidelity Fund Picks, which are funds pre-screened by the broker’s analysts. Fidelity also has more mutual funds overall.

Long-Term Investors and Retirement Savers: Vanguard has several retirement account fees that Fidelity doesn’t have. So we once again recommend Fidelity.

Beginners: Fidelity has better customer service than Vanguard; so again, it’s Fidelity.

Stock and ETF Trading: Fidelity offers better software and more information on stocks and ETF’s. So we have to go with Fidelity.


Vanguard vs Fidelity Comparison Results


Vanguard didn’t win a single category. Despite its abysmal showing, we can recommend it for brokerage account (not retirement account) customers who have at least $50,000 to invest in Vanguard funds. Value oriented investors can find a great deal at Ally Invest.







Vanguard Fees vs Fidelity Fees



Fidelity Investments


Vanguard

  • Stocks and ETFs: $0
  • Stocks and ETFs broker assisted: $32.95
  • Options: $0.65 per contract
  • Mutual funds: $49.95 to buy; $0 to sell. $49.95 if sold within 2 months
  • Bonds and CDs (new issues): on a net yield basis
  • Bonds and CDs (secondary issues): $1.00 per bond ($250 maximum)
  • Investment products: stocks, bonds, mutual funds, options, commercial paper, UITs, ETFs
  • Fidelity minimum deposit to open account: $2,500 ($0 for Rollover IRA; $2,500 or $200 per month for ROTH and Traditional IRA)

  • Stocks and ETFs: $0
  • Options: $1 per contract
  • Mutual funds: Vanguard mutual funds - free. Most others - $20 per transaction
  • Commercial paper: $50 per transaction; minimum purchase: $100,000
  • U.S. Treasury: Commission-free
  • Mortgage-backed securities: $50 per transaction; GNMA minimum purchase: $25,000
  • Investment products: stocks, options, mutual funds, bonds, CDs, foreign securities, insurance, commercial paper, ETFs
  • Vanguard minimum deposit to open account: $0; most Vanguard mutual funds have a minimum investment of $3,000




Discount online brokerage firms fees: Fidelity or Vanguard? Compare IRA, review differences between investment companies. Recommendation for stocks, options, ETFs, mutual funds, bonds investors. Vanguard versus Fidelity Investments: which is better for beginner investors, long term, individual retirement accounts, active/day traders. See which stock broker service is cheaper, rated higher, and easier to use.