Vanguard rating

Vanguard

Robinhood Trading rating

Robinhood

Vanguard vs Robinhood



Robinhood vs Vanguard: Introduction


No two brokers could be more different than Robinhood and Vanguard. One is the old school, while the other is the new. Let’s compare the two firms and see which is better - Vanguard or Robinhood?


Pricing


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Vanguard $7-$20 $8-$35 $20 + $1.00 per contract $20* see
Robinhood $0 na $0 $0 na
Firstrade $0 $0 $0 $0 $0


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Vanguard
Robinhood
Firstrade


Customer Service


Neither broker provides customer service 24/7. A Vanguard associate can be reached over the phone during the week from 8:00 am until 10:00 pm, EST. The firm does not provide any service on the weekend. The Vanguard website has internal messaging, but there is no on-line chat. There are also no physical Vanguard locations.

A Robinhood representative can be contacted by phone during market hours. Curiously, the phone number isn’t a toll-free number. The company can be messaged through its mobile app. Vanguard only provides a phone number. Like its rival, Robinhood has no brick-and-mortar locations.

Longer customer service hours give Vanguard the edge here.


Commissions and Account Minimums


As the new broker, Robinhood has tried to do something drastic: free trades. The firm’s clients get an unlimited number of equity trades at no charge. (The only other broker that offers free investing is higher rated Firstrade.)

Robinhood claims it can offer this unbelievable low rate on a regular basis by charging for mailed copies of trade confirmations at $2 each. Investors must also pay $5 for hard copy account statements. Exchange and regulatory fees also get passed onto traders.

There is no minimum deposit needed to open a Robinhood securities account. Once the account is opened, there are no annual, low-balance, or maintenance fees.

Although Vanguard is the old school broker in this survey, it actually does offer free trades for some clients. The broker’s commission schedule is on a sliding scale, with small accounts paying $7 or $20 per equity transaction, while large accounts (defined as a million dollars in assets) receive 25 trades per year at $0.

Option traders pay $1 plus a base charge at Vanguard. U.S. Treasury bonds are commission free. Robinhood, by comparison, doesn’t not offer derivatives or fixed-income.

A Vanguard account can be opened with zero dollars. However, there is a $20 annual fee. Enrolling in electronic delivery of account statements will avoid the charge.

Robinhood is the better choice here.


Tech Tools


The Vanguard website has a good deal of information on it, which makes it somewhat difficult to navigate at times. There is a search field that makes browsing a little easier. Unfortunately, there is no trade bar on the Vanguard website, nor does the broker provide a desktop platform. Trades are submitted using simple web pages.

The charting program on Vanguard’s site is pretty simple. Four styles can be selected for the chart style. These include mountain, line, OHLC bars, and candlesticks. Comparisons can be made, and there are a handful of technical studies. A chart cannot be detached. The feeling the broker’s website presents is that its designed for long-term, buy-and-hold investors.

Robinhood’s site has much less material on it. In fact, the website isn’t designed for trading. It has a few FAQ’s that explain how to open an account, and what it’s like to trade with the broker. Account applications are submitted via the website. There is no Robinhood desktop platform, so you may be wondering, where does trading take place?

The answer is on the firm’s mobile app. Robinhood is the new kid on the block, and it’s trying to survive using new methods and technologies. Charting and security analysis are conducted on the mobile platform. These functions, however, are very basic. There are no drawing tools, and technical analysis is not available. A graph can be shown only in line format. There is a Robinhood platform for Apple Watch, which Vanguard does not provide.

Vanguard’s app has more features than the Robinhood version. For example, Vanguard offers mobile check deposit, markets news (including some videos), and watch lists. The mobile app is all Robinhood offers, and it doesn’t provide these functions.

Overall, Vanguard is be the better choice here.


Vanguard vs Robinhood


Research and Education


In addition to the materials on the Vanguard mobile app, the broker’s website has even more. There are stock reports from Argus and MarketGrader that can be downloaded at no cost. The Vanguard site also has effective screeners for all the securities the broker offers. Searching through the materials can be a little difficult at times because the site is not easily navigable.

Robinhood offers far fewer resources for its clients. The FAQ’s on the Robinhood site are mainly for account questions. They are not devoted to investment learning. A small amount of equity research can be done on the broker’s app.

Vanguard easily takes this category.


Robin Hood vs Vanguard


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Mutual Funds and ETF’s


Vanguard traders have access to one of the largest mutual fund selections in the industry. The broker has more than 16,000 products that are available for trading. More than 2,000 of these funds carry no load and no transaction fee. Vanguard manages its own lineup of 127 funds. They always have no load and no transaction fee when traded on the Vanguard site. The broker’s fee for non-NTF funds is $35.

There are many products Robinhood doesn't offer. Mutual funds are one of them. While all ETF’s are commission-free with Robinhood, Vanguard does offer 55 of its own exchange-traded funds that are free to trade.

Vanguard is definitely the better option here.


Promotions


Robinhood: Open account and get FREE stock.

Firstrade: $0 commissions + up to $200 in transfer fee rebates.

Vanguard: none right now.



Financial Planning and Portfolio Management


Vanguard operates an investment advisory service aptly named Vanguard Advisors. Portfolio management costs just 0.30% per year, and the firm doesn’t use a computer to make trading decisions. A minimum investment of $50,000 is required.

Robinhood doesn’t provide investment advice, and thus loses another category.


Robinhood vs Vanguard Results


Vanguard (read review) won five categories, while Robinhood (read review) was successful just once. Vanguard wins easily. Despite being the old school firm, Vanguard actually provides free trades to rich clients with large balances. For everyone who wants more than just an app and doesn't want to get punished for making more than 25 trades there are other brokers to consider.


Updated on 10/3/2018.