Have a Fidelity account, should I open one at Vanguard too? (2024)

I'm new to this site, there is a lot of learning and reading to do, and I will post a proper 'portfolio' question as well later.

I recently read about Fidelity lowering their fees on common index funds/ETFs and a lot of them (i.e. the equivalent Vanguard ones) seem to be frequently advised here. I have also read the thread about this - viewtopic.php?f=10&t=194206, the reaction seems generally positive with a few things over my head.

I don't mind opening a Vanguard account if it will be better in the end, but I'm also trying to simplify my investments and the number of institutions I deal with. Both firms have a huge range of products, I tend to trust Vanguard as a company more but have no complaints about Fidelity either.

Please advise.

What would be your reason to open a Vanguard account?

If you want to spread your investment over a number of institutions, do the same research for where you would invest your money as I'm sure you did when you went into Fidelity. To me, an institution who has 9,235,432 options where I only invest in 3 has no advantage over another institution who has 10 options where the 3 are equivalent. Don't limit yourself to just Fidelity and Vanguard. They're not the only games in town anymore on the low cost front. Look carefully at both Schwab and TDAmeritrade at a minimum. I believe both will give you money to open a first time account with them. Both also beat Fidelity and Vanguard if you buy ETFs instead of mutual funds.

fordp wrote:I'm new to this site, there is a lot of learning and reading to do, and I will post a proper 'portfolio' question as well later.

I recently read about Fidelity lowering their fees on common index funds/ETFs and a lot of them (i.e. the equivalent Vanguard ones) seem to be frequently advised here. I have also read the thread about this - viewtopic.php?f=10&t=194206, the reaction seems generally positive with a few things over my head.

I don't mind opening a Vanguard account if it will be better in the end, but I'm also trying to simplify my investments and the number of institutions I deal with. Both firms have a huge range of products, I tend to trust Vanguard as a company more but have no complaints about Fidelity either.

Please advise.

I've used both and chose Vanguard to consolidate to. But could have been perfectly happy at Fidelity. If I had only had assets at Fidelity, I'd personally just have stayed there. Low cost index funds seem like they are here to stay.

fordp, both Fidelity and Vanguard are very good investment houses, with low cost index funds - the ER's are almost identical. If you need other than index funds, both have a wide variety to choose from. I've been a Fidelity customer for over 30 years, first through my company 401k which Fidelity managed; and then a few years after retirement I rolled it over to Fidelity as a matter of convenience. It was the easy thing to do. I only have 3 funds in the account now, and it's easy to manage.

However, we rolled my wife's 401k into Vanguard, quite deliberately just to get experience dealing with Vanguard. Presently the account only has 2 funds.

We're very happy with both. Fidelity's website is much busier than Vanguard's, and requires some getting used to. I've been very pleased with Fidelity customer service the very few times I've called them. Additionally, Fidelity have an office not far from our home. I've only been there 3 times, and the service has been very good. The few times we've called Vanguard, likewise; couldn't be more pleased with the service.

One day we will consolidate our accounts into one or the other; but honestly I could flip a coin and be happy with the choice whichever way it fell.

I have both and like both and I am planning to keep both open. Fidelity has great customer service (I haven't had an opportunity to call Vanguard about any issues yet). If Fidelity offered similar set of index funds before I opened an account with Vanguard, I would have probably stayed (one less tax form to worry about).

If you are already satisfied with Fidelity, I don't see any reason to switch unless you have a compelling reason to do so.

Welcome to the forum .

fordp wrote:I'm new to this site, there is a lot of learning and reading to do, and I will post a proper 'portfolio' question as well later.

I recently read about Fidelity lowering their fees on common index funds/ETFs and a lot of them (i.e. the equivalent Vanguard ones) seem to be frequently advised here. I have also read the thread about this - viewtopic.php?f=10&t=194206, the reaction seems generally positive with a few things over my head.

I don't mind opening a Vanguard account if it will be better in the end, but I'm also trying to simplify my investments and the number of institutions I deal with. Both firms have a huge range of products, I tend to trust Vanguard as a company more but have no complaints about Fidelity either.

Please advise.

I am a huge Vanguard fan.

But if you are satisfied with your Fidelity account and Fidelity mutual funds, then there is no reason to complicate things by adding a Vanguard account. Fidelity has some very good, low expense ratio index funds that you can use.

"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy

Fordp:

Welcome to the Bogleheads Forum!

Having invested for many years, I have become a strong proponent of simplicity and that means (in part) keeping all investments in one good institution like Vanguard or Fidelity. The benefits are many:

1. You know the company holding your life savings has strength, honesty, and integrity.

2. Many experts believe that "expense" is the most important criteria in selecting funds. You know you always have this advantage working for you. (Use only low-cost index funds)

3. Service is important. I never heard anyone say that Vanguard or Fidelity did not correct its mistakes.

4. Both have good web-sites.

5. Premium Service: Consolidating everything with Vanguard or Fidelity is more likely to achieve a premium service with lower cost.

6. Fund selection. Both Vanguard and Fidelity provide good low-cost index funds.

7. Company knowledge: By concentrating on one company, we can much better learn fund details, including: fee's, past returns, risk, manager changes, etc.

8. Exchanges and other transactions are easier.

9. One easily understood consolidated statement.

10. In event of disability or death, it will be much easier for survivors if they have only one company to deal with.

Best wishes
Taylor

If I were you, I probably wouldn't do it. I certainly wouldn't be in a big hurry.

I would only do it for one of two reasons:

a) You actually want to have accounts at two different firms, despite the added complexity, for some reason--because you want some redundancy if one of them has a computer outage or something. I personally agree with Taylor. I had accounts at both Vanguard and Fidelity for over ten years, and it was a big simplification when I consolidated everything at one firm. (Vanguard, but it was almost a coin-flip decision).

b1) Most of the big Vanguard index funds for which Fidelity offers almost identical Fidelity funds, that you can get at Fidelity without paying a transaction fee. If, however, you feel for whatever reason that you really want the Vanguard products, no substitutes, then you might want to open a Vanguard account so you can buy them without a transaction fee.

b2) Similarly, if you happen to want a Vanguard fund for which there is no comparable no-transaction-fee equivalent at Fidelity.

You might find it helpful to read the wiki article, Fidelity.

Vanguard has some mutual funds that provide low-cost access to some asset classes for which there are no Fidelity equivalent mutual funds (small-cap value index comes to mind). That would be the only reason I'd suggest a separate account at Vanguard.

If you're wanting access to broad-market funds that buy the whole market, you will probably do as well at Fidelity as you would at Vanguard. (Both have total US market and total international market funds, both have good bond fund options, both have TIPS fund options, both have ETFs if that is your preference.) So unless you just want access to the aforementioned asset classes and can't find them at Fidelity, I'd say there's no reason to open a second brokerage account.

Many people have said that they like Fidelity's customer service and web site user experience better than those at Vanguard.

(Disclaimer: I have accounts at both Fidelity and Vanguard. My 401k has been with Fidelity for years, I opened a Vanguard account last year to get more selection of asset classes, thinking that I would put some money in a taxable "slice 'n' dice" portfolio, but since then I've learned better. I now have broad-market investments in both, and frankly have been happy with both accounts, and can honestly say that I'd probably be equally happy with either one by itself.)

Thanks for all the replies! Both seem to have matching options for low cost index funds and ETFs. Vanguard has some funds such as VTMFX for which I cannot find a Fidelity equivalent, but I am sure there are funds the other way around too, I just don't know enough to decide intelligently.

I fully agree with this -

My opinion is that Vanguard overall has better and a more comprehensive funds, but overall Fidelity has better service/website and a few types of funds that Vanguard does not have (e.g., certain state muni funds). Also, it's hard to find a Vanguard fund that is a real dog, not as sure about Fidelity. Fidelity's fund line-up also has more overlap, whereas Vanguard's is simpler and more focused.

Advice on Vanguard is easy to find on sites like this and its hard to find a bad fund. Whereas with Fidelity (and other firms) you have an overlap with all the other high fee active funds as well.

I am in somewhat of a hurry to do this as I don't want to delay things longer, I have an IRA at another firm I want to move over asap and need to choose between the 2.

fordp:

This is an earlier post of mine:

My September 2016 issue of Consumer Reports arrived today in the mail. The heading on Page 49 caught my eye: "Investment Companies: Which Ones Do It Best"
Our table below, rates traditional investment companies on the services they provide. A total of 118,662 ratings from small investors and 45,447 from large investors were provided by subscribers.

Ratings were based on:
Investment Returns
Met Goals
Customer Service
Advice
Online Reports
Vanguard's overall company rating was #1 for both small investors (67 companies rated), and large investors (31 companies rated).

Thank you, Vanguard!

Best wishes.
Taylor

fordp wrote:Thanks for all the replies! Both seem to have matching options for low cost index funds and ETFs. Vanguard has some funds such as VTMFX for which I cannot find a Fidelity equivalent, but I am sure there are funds the other way around too, I just don't know enough to decide intelligently.

I fully agree with this -

My opinion is that Vanguard overall has better and a more comprehensive funds, but overall Fidelity has better service/website and a few types of funds that Vanguard does not have (e.g., certain state muni funds). Also, it's hard to find a Vanguard fund that is a real dog, not as sure about Fidelity. Fidelity's fund line-up also has more overlap, whereas Vanguard's is simpler and more focused.

Advice on Vanguard is easy to find on sites like this and its hard to find a bad fund. Whereas with Fidelity (and other firms) you have an overlap with all the other high fee active funds as well.

I am in somewhat of a hurry to do this as I don't want to delay things longer, I have an IRA at another firm I want to move over asap and need to choose between the 2.

Why not open an account with Vanguard and give it a try?
You have nothing to lose.
That way, you can actually judge VG based on your own experience.
Fidelity and Vanguard are both very good companies, so you can't go wrong.
Give it a try....you may end up really liking VG better.
Good Luck with whatever your choice turns out to be.
Don

Decided to open a Vanguard account, I have a possibly stupid question - say I decide in future to consolidate into one firm, so I'd want to move all holdings from Fidelity->Vanguard or the other way around. In that case will a 'transfer in kind' have any fees?

e.g. if a Vanguard fund which costs $50 to buy in Fidelity is transferred from Vanguard, will I then have to pay that fee? My gut feeling is I won't but just want to make sure.

fordp wrote:Decided to open a Vanguard account, I have a possibly stupid question - say I decide in future to consolidate into one firm, so I'd want to move all holdings from Fidelity->Vanguard or the other way around. In that case will a 'transfer in kind' have any fees?

e.g. if a Vanguard fund which costs $50 to buy in Fidelity is transferred from Vanguard, will I then have to pay that fee? My gut feeling is I won't but just want to make sure.

If you transfer in-kind, meaning investments you already have, you won't be charged a commission. Some custodians have transfer-out fees. According to this site:

http://www.brokerage-review.com/findbro ... -fees.aspx

Fidelity doesn't charge unless you close an IRA.

Earl