Vanguard versus Fidelity Investments - compare cost, commissions, investing fees, trading tools, account differences, pros and cons. Which online broker is better?

Overview of Fidelity and Vanguard

Vanguard and Fidelity (each) have trillions of dollars in assets and millions of customers. With such impressive figures, you might think they are very similar. Well, think again. These two are quite different from each other, and here’s our research to prove it.

Vanguard and Fidelity Fees

Fidelity Investments Review Vanguard Brokerage Review
Rating Fidelity Investments rating Vanguard brokerage company rating
Stocks, ETFs $0 $0
Options (per contract) $0.65 $1.00
Mutual Funds $49.95 $20.00
Initial Funding Requirement $0 $0
Inactivity Fee $0 $0
IRA Annual Fee $0 $0
IRA Termination Fee $50 $0
Outgoing Wire Fees (Domestic)$10$0
Full Account Transfer Out$0$0
Partial Account Transfer Out$0$0

What Are the Hours of Customer Service?

Fidelity clients can reach a company associated over the phone anytime of the day or night. The broker’s website offers an AI chat service that is also up 24/7. In our trials, it did a decent (although not perfect) job of answering our questions. We grade it a C+. Human chat is available during the week from 8 am until 10 pm. Saturday and Sunday hours are 9 am till 4 pm.

The broker’s website offers a lot of self-service features that will eliminate the need to contact anyone. For example, we found links to download tax forms and add a beneficiary to an account.

If you prefer old fashioned in-person service, Fidelity has more than 180 branch locations throughout the country. These are typically open during the weekday only.

Switching to Vanguard, the situation deteriorates dramatically. The broker-dealer has 0 brick-and-mortar offices, which obviously decreases the available contact channels with its customers. Phone service is up and running Monday through Friday from 8 am until 10 pm, EST. There are no weekend hours, which will be enough to send some traders to other brokers.

What we really didn’t like about Vanguard in this category is that it fails to provide any type of chat service on its website. Moreover, the company’s online self-service features are hard to find compared to Fidelity’s site.

Do They Offer Cash Management Tools?

Fidelity clients get to open something called a Cash Management Account. It is a fused securities-bank account without margin. Checks and a Visa debit card are free of charge, and ATM fees incurred with the card are reimbursed by the broker. The account has no fees and no minimum balance requirement.

Vanguard offers the VanguardAdvantage account. Like Fidelity’s cash account, this one is a hybrid bank-investment account. The similarity, though, stops there as this one carries a $30 annual fee (waived for clients with at least a million dollars in assets) and a $500,000 opening deposit requirement (no joke!). Only ATM fees from PNC Bank locations are reimbursed.

What Types of Assets Can Be Traded?

Vanguard offers stocks, bonds, CD’s, derivatives, ETF’s, closed-end funds, and mutual funds. Accounts that can be opened include regular brokerage accounts plus IRA’s, 529 education plans, solo 401(k)’s, and custodial accounts.

At Fidelity, we found the same account types plus estate and trust accounts. As for tradable instruments, Fidelity offers the same lineup as Vanguard.

What Software Is Available?

Vanguard has a website where orders can be entered. Unfortunately, that’s about all it provides. The broker provides no trade bar on its website, no browser platform, no desktop software, and no skill for Amazon Echo.

The Vanguard website is fairly simple. During our testing, it was difficult at times to find what we were looking for. Charting offers just a few features, a graph cannot be displayed full-screen, and there are zero drawing tools.

Vanguard versus Fidelity

As with charting, order entry is very basic. There are just a handful of duration and order type options. Multiple legs? Forget about it. Triggers? No way. Direct routing? Go somewhere else.

Fidelity offers a much more user-friendly website. A pop-up trade ticket is available (after clicking on a trade button); and charting on the site is quite sophisticated. A graph can be shown the width of the monitor, and there are several tools, such as technical studies.

Although Fidelity doesn’t offer a browser platform, it does have a very good desktop program called Active Trader Pro. There are no account minimums or active trader requirements (despite the name). The software has some very advanced features, such as Level II data, charting with technical indicators, complex order types, and the ability to direct orders to specific market makers.

Active Trader Pro

Fidelity also has a skill for Amazon Echo devices. It can give market updates and quotes.

Who Has the Better Mobile App?

Fidelity’s app emphasizes market news. On the home screen, a story is displayed with an image. Tapping on it generates the news article. Besides news stories, the app also provides market indexes and much more. We found mobile check deposit, bill pay, and money movement tools (including a PayPal link).

Fidelity Cost vs Vanguard

Charting on the Fidelity app offers horizontal view, several graph styles, comparisons to indexes or other stocks, and extended-hours price histories.

The order ticket on the app offers several trailing options, but just two time-in-force options (GTC and day). The app does have the ability to trade options and mutual funds.

Perhaps the best feature on Fidelity’s app is live streaming of Bloomberg financial news in high definition. There is no charge for it.

Vanguard’s app doesn’t have near the same features. Charting does not exist. Non-Vanguard mutual funds cannot be traded (for some strange reason); and forget about buying and selling option contracts.

Vanguard vs Fidelity Fees

There is also no video news on the Vanguard app. But we did find mobile check deposit and a funds transfer tool. There is no bill pay. While the broker’s order ticket is rather elementary, it’s not more so than Fidelity’s.

And What About Mutual and Exchange-Traded Funds?

Both brokerage firms in our investigation are famous for managing their own funds. Fidelity has recently been advertising the fact that it has $0 minimum investment amounts (Vanguard typically requires $3,000), 0.00% expense ratios on index mutual funds, and lower expense ratios on most funds today.

With Fidelity’s screener, we found roughly 10,700 mutual funds (including Fidelity and non-Fidelity funds). On this list, roughly 1,900 have neither load nor transaction fee. This figure is difficult to estimate because Fidelity’s screener doesn’t have the ability to look for no-load funds.

Vanguard customers have access to roughly 7,100 mutual funds (total of Vanguard and non-Vanguard products). Approximately 3,000 of them come with no transaction fee and no load.

Fidelity’s website has better fund materials and a wider amount of information, compared to Vanguard’s site. We found six analyst reports for SPY at Fidelity and 0 at Vanguard. Fidelity’s mutual fund and ETF screeners offer more search criteria, too.

Our Recommendations

For beginners, we propose Fidelity over Vanguard. Fidelity offers better educational tools, and its learning center is easier to navigate. Combined with its obviously better customer service, new traders should definitely start with Fidelity.

For frequent equity and derivative traders, we recommend Fidelity again. The broker’s free desktop software is the only way to go.

For retirement accounts, either brokerage firm would be a good choice.

If you plan to do a lot of trading on a mobile device, definitely go with Fidelity. Vanguard’s app just doesn’t compete.

If you want a broker with good research resources, then generally we’ll recommend Fidelity. Its resources are usually better than Vanguard’s; although we don’t like the inability to search for no-load mutual funds on Fidelity’s site.

Bargain seekers should take a look at Firstrade Review.


Fidelity vs Vanguard Fees Summary

While Vanguard and Fidelity have a lot of customers, it seems that Fidelity’s clients receive the best service and tools.

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