Fidelity vs. Vanguard vs. TD Ameritrade - which one or something else for ETF index funds?

[Matt]

So going back to the OP...

It seems like Vanguard and Schwab are the two favorites here?

Frankly, it doesn't really matter. People have good and bad experiences everywhere. People love Vanguard (I have accounts there) but others say their service is poor. Schwab tends to get good service reviews, and some people hate Fidelity, while others like them. These brokerage accounts are best considered like HDTVs, they are all pretty much the same these days, some people prefer a brand over another, but its all about the content, and they do the job.

 

[PointsEarner615]

The Finance Buff has an interesting post up about Schwab's new robo-advisor offering:

http://thefinancebuff.com/schwab-intelligent-portfolios-game-over-for-betterment-and-wealthfront.html

If I were just starting out, that would be a pretty compelling offer with the no-fee approach. TD Ameritrade really needs to step it up (Amerivest offering with 1% fee is not going to cut it) with their own competitive offering, or I may be out of there.

 

[Julian Brennan]

Frankly, it doesn't really matter ... they are all pretty much the same these days, some people prefer a brand over another, but its all about the content, and they do the job.

Have to agree with you here. I personally hate Fidelity's website but maybe that's because I'm just used to Schwab. But then again you have to consider the fees. If you're not going the commission-free ETF route then the fees do and will matter depending on the amounts you frequently invest. Common opinion is that a trade commission should not exceed 1% of trade amount, i.e. when you invest $1,000 every month any commission up to $10 would be considered ok.

If you can only sock away $500 a month or even less then you will have to limit yourself to
a) deep discounters a la Optionshouse or Tradeking or
b) stick with the commission-free ETFs or index funds.

 

[Chasing The Points]

I have an account with Fidelity and Vanguard. All of my retirement is in Fidelity, Roth, former 403b, and my company's 401k. Fidelity also handles the ESPP (Employee Stock Purchase Plan) as well.

Vanguard I have my after tax accounts to play around. Both are very good for what they do, websites are functional and easy to navigate. I like Vanguard's ETF choices so when I invest into the ETF's most of money is with Vanguard. Vanguard has $7 commission while Fidelity is $7.95, but they vary with how much money is with each brokerage house.

Also, what's the lifestyle fund? Is that the target fund? If yes, I read that you're paying 2x the fee because the Target fund itself invests in other funds so you'll be paying management fees twice

 

[Sunny]

I have accounts with Fidelity, Merrill Edge and Vanguard. I prefer the Fidelity interface but I think that is just personal choice. Both provide the same information. Fido has some good calculators around retirement scenarios.

Merrill Edge was a PITA to setup and get my assets transferred to. However, they offer up a bunch of free trades every month if you have enough assets with them.

Vanguard's interface is a bit clunky IMHO. I just don't think its something they spend money on.

In both Fidelity and Merrill Edge brokerage accounts, I hold Vanguard ETFs. I think the trading fees are $7.95 and $6.95 respectively.

 

[Julian Brennan]

Merrill Edge was a PITA to setup and get my assets transferred to.

So I'm not the only one? Can't even get to open an account!

Went to the BofA branch 2 times alreadt to talk to an ME advisor. First time the lobby manager took my phone# and promised he'd call me back. A week later, after not getting any call, went back to the branch and asked again. She sat me down in the lobby and said to get the advisor. After ~15 minutes I left without any kind of feedback what was going on. What a horrible little bank that is...

 

[MilesJunkie]

I just recently went into my BofA to get started on my IRA rollover for the 75% Platinum Honors Preferred Rewards program. I plan to get the BofA Travel Rewards credit card for the flat 2.625% earnings for everyday spend that my other main cards don't give me. Got started on my account creation pretty easily when ME advisor sent me an email link to set up the account. We shall see how their service is and the free monthly trades is a bonus that might be of use but I'm usually hands off since I don't know much about finance and investment markets.

 

[plane2port]

Thanks to those in this forum who have turned me onto bogleheads. I am giving our investment accounts some overdue attention, and have found some great advice on bogleheads dot org. After investing for the last 30 years, I have given up on the fantasy that I can cherry pick stocks/funds. I have had my IRA at Vanguard since forever, but I'm now in the process of moving all our portfolios, taxable and non-taxable there, and using a form of one of the "lazy" portfolios.

We will have 90% of our IRAs in the Total Bond ETF, and 10% in the REIT ETF. We will be buying the Total Stock ETF in our taxable accounts. We will keep 2 separate accounts of 100k each to move in and out of Fidelity once a year to get the miles, as long as that gravy train lasts (We've been doing that for the last 3 years). These separate funds will also be the Total Stock ETF.

One thing that is a pain about Vanguard is that if you own any stocks or ETF's you have to have a separate brokerage account. So if you own both mutual funds and etf's you will have 2 accounts. They plan to merge the all the split accounts in the future, but their advisers don't know exactly when it's happening. Since my major goal in moving everything over to Vanguard was for simplification, these split accounts are annoying.

 

[credipig]

One thing I would like to add - I think it's a good idea to have assets at more than 1 investment firm. After seeing a few "American Greed" episodes, I think it just makes sense "not" to put all your eggs in one basket.

The majority of my assets are with Vanguard. While I will agree it's a long shot that Vanguard will run into problems, it is a possibility. My hedge against that is having assets with another investment firm. For me, it's the government's Thrift Savings Plan. I'm just fortunate to have that option. Even if I wasn't eligible for TSP, I would find a way to split my assets. If one goes bad, I still have about half left.

 

[Matt]

One thing I would like to add - I think it's a good idea to have assets at more than 1 investment firm. After seeing a few "American Greed" episodes, I think it just makes sense "not" to put all your eggs in one basket.

The majority of my assets are with Vanguard. While I will agree it's a long shot that Vanguard will run into problems, it is a possibility. My hedge against that is having assets with another investment firm. For me, it's the government's Thrift Savings Plan. I'm just fortunate to have that option. Even if I wasn't eligible for TSP, I would find a way to split my assets. If one goes bad, I still have about half left.

Well, if Vanguard fails, the US Govt won't be far behind! But yes, you have a good point about diversification. Several people I know will do this on an international basis in order to protect against currency risks also.

 

[El Ingeniero]

Answer both @Matt & @Jig. I do not get robo advisers at all esp. when they are charging 75 bps (I'm not interested and so don't pay full attention, guess they start @ 15bps) but I can get a real human being to manage my investments for 30bps (fixed fee--admittedly it's because my account is larger).

Roboadvisers follow a set of rules devised by human beings.

Human advisors will say they follow certain rules, but in the heat of the moment they often discard said rules in a heartbeat.

So the question is, is human judgement superior to blind rule following? IMO it is not. My proof:

1. Take the rules which define the S&P 500 as a set of rules defining a large cap investment portfolio.
2. Very few large cap fund managers outperform SPDR, IVV or any other SP500 indexed ETF or mutual fund in the long term.
3. Ergo, the SP500 index is a set of rules which outperform human judgement when blindly followed.