Rating: 
- Stocks & ETFs: $0
- Options: $1 per contract
- Mutual Funds: $20
- Minimum to open: $0
Overview of Vanguard
Vanguard is one of the largest brokers worldwide, with client assets over $8 trillion. Despite this, it doesn’t always stand out in some important areas. Read this review carefully before deciding to open an account.
Bulls Point Out...
Extensive portfolio management: Great resources for hands-off investors.
Considerable history: Vanguard pioneered index investing.
Large selection of account types: Offers both taxable and tax-deferred options.
Bears Point Out...
Customer service: Issues reported frequently.
Limited selection of tradable products: Vanguard no longer offers OTC stock trades.
Basic software: Not ideal for frequent trading.
Investment System
Vanguard offers both self-directed and managed brokerage accounts. Managed accounts include several options, with one being a robo-advisor service.
The robo-advisor account has a limited selection of Vanguard ETFs. More options, like Vanguard ETFs, bonds, mutual funds, and stocks, are available with traditional accounts.
Vanguard’s advisory service includes:
- Estate planning
- Wealth management
- Retirement planning
- Goal tracking
- Ongoing portfolio advice
- Personalized financial plan
- Investment coaching
- Access to a human advisor
For those who prefer self-directed accounts, Vanguard offers:
- Stocks
- Options
- Funds (mutual, ETFs, closed-end)
- Bonds and fixed-income securities
Vanguard no longer supports most OTC stocks, except for Y-shares with high quality and a market cap over $300 million.
Vanguard accounts offer a range of tax structures. Taxable accounts include individual, joint, and business accounts. Tax-advantaged accounts include 529 savings plans, custodial accounts, and retirement accounts like self-employed 401k plans and business IRAs.
Customer Service
Vanguard’s customer service has received negative feedback in recent years, with reports of long wait times and inconsistent call-backs, even with their call-back service.
The support number is 877-662-7447, available from 8:00 am to 8:00 pm EST. Certain departments, like the nonprofit service, have different hours and contact numbers.
You can also reach support through Vanguard’s website. They have a chat feature that begins with a robo-assistant and connects to a human if needed, which is a helpful recent addition.
The Vanguard website has a messaging tool for sending digital documents, accessible by clicking the envelope icon in the top-right corner of the dashboard.
Self-help resources are also available on the site under “Support” and “Profile & account settings” in the upper-right corner.
Fees and Minimums
Vanguard charges no commission for self-directed online trades of stocks and ETFs. Trades made through a phone representative have a $25 fee.
Many mutual funds, especially Vanguard funds, have no trading fee, although some funds from other companies have a $20 online trading fee. Large accounts (over $1 million) get this fee waived up to 25 times per year.
Option trades have a $1 fee per contract, which is waived for large accounts. Bond trades range from $0 to $35.
Vanguard is one of the few brokers to charge an annual account fee, which can be waived by choosing e-delivery for account documents. The annual fee is $20.
Retirement accounts may have fees based on account type; for example, a 403(b) costs $5 per month per participant.
Managed accounts have additional fees. The robo service, Digital Advisor, has a 0.20% annual fee with a $3,000 minimum (only $5 for a 401(k) account).
Traditional advisory accounts have various fees and minimums. Wealth management accounts require a minimum of $5 million with a detailed fee schedule.
Margin
Vanguard offers both cash and margin accounts, but once margin is added, downgrading to a cash account requires a call or chat with support.
Margin rates at Vanguard range from 9% to 12.25%, which are competitive but not the lowest in the industry. The platform lacks detailed margin information for individual securities, making it less ideal for day trading or short selling.
Website
Vanguard’s website was recently updated but remains somewhat challenging to navigate. The search bar in the upper-right can be useful, as the site’s layout isn’t always intuitive.
Typing a stock symbol or company name in the search bar produces a list of options. Selecting one brings up a summary of the stock with trade buttons. However, a detailed stock profile lacks a trade button. A trade link can be found in a column of links on the right, leading to the order ticket.
The order ticket is straightforward, with options for selling short and buying to cover. Order types include stop and stop-limit, the most advanced choices on the ticket. Real-time data appears to the right, with refresh capability, which is helpful. Balance and buying power information displays below the quote box.
The charts on Vanguard’s site start very basic, with no tools on the initial profile view. Clicking on the chart tab brings up a more detailed view, offering up to 50 years of price history and a few tools with four plot styles.
Other than these basic features, the Vanguard site lacks advanced trading tools like a trade bar or browser platform.
Mobile App
Vanguard’s mobile app falls short in usability. Stock profiles have only recently been added, showing basic stats like market cap and average volume. Major stocks include analyst recommendations, but these are less helpful since the app lacks a trade ticket for stocks or options. Only Vanguard funds are available for trading, and non-Vanguard funds don’t even have profiles.
Charts on the app are limited to one year of price history with no tools, and they can’t be viewed horizontally.
Supplementary Services
Extended Hours: Vanguard allows trading in the late-night session but not before the market opens.
Initial Public Offerings: Not available.
Individual Retirement Accounts: Vanguard offers multiple IRA options, including SEP and SIMPLE IRAs for small businesses. Business IRAs holding Vanguard mutual funds may incur fees, but these can be waived similarly to the company’s annual account fees.
Fractional-share Trading: Vanguard ETFs can be purchased in dollar amounts.
DRIP Service: Available at no charge.
Recurring Mutual Fund Purchases: Automatic purchases are allowed for Vanguard mutual funds.
Recommendations
Mutual Fund Investors: Vanguard’s mutual fund screener lists 6,969 mutual funds, with around half available without transaction fees.
Firstrade offers a larger selection of no-transaction-fee funds.
Long-Term Investors and Retirement Savers: Vanguard has a few account fees that can be avoided, plus lifecycle mutual funds and various tax-deferred accounts, making it a reasonable choice. However,
Charles Schwab may be a better fit.
Beginners: Vanguard’s managed account options are well-suited for new investors.
Active Stock and ETF Trading: Vanguard’s basic trading tools don’t support frequent traders well.
Webull is a more suitable option.
Small Accounts: Although Vanguard’s pricing has improved, it remains more suited for large accounts.
Firstrade is ideal for small investors.
Vanguard Review Judgment
Despite its large size, Vanguard falls short in many key areas. Its main strength lies in portfolio management, but the lack of physical branches limits its appeal in this area, too.
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Vanguard Commissions
| Investments | Price |
|---|
| Stocks and ETFs |
$0 |
| Options |
$1 per contract |
| Mutual funds | $20 |
| U.S. Treasury | Free for new and existing issues. |
| U.S. government agency securities, corporate bonds, and CDs |
New issues free. Standard and Voyager $2 per $1,000 face amount ($250 maximum).
Voyager Select, Flagship, and Flagship Select $1 per $1,000 face amount ($250 maximum)
|
| Mortgage-backed securities & commercial papers | $50 per transaction. |
| UITs | Selling UITs $35 per transaction. |
Vanguard IRA & Account Fees
| Fee | Amount |
|---|
| IRA Setup Fee | $0 |
| Annual IRA Fee | $20, $0 with conditions* |
| IRA Termination Fee | $0 |
| Full Account Transfer Out | $0 |
| Partial Account Transfer Out | $0 |
| Outgoing Wire Fees (Domestic) | $0 |
| Outgoing Wire Fees (International) | $0 |
| All Vanguard fees » |
Updated on 11/12/2024.