Vanguard vs. Fidelity vs. Schwab

Vanguard, Fidelity and Charles Schwab offer a wide range of financial products and services, from banking and investment products to financial advisors and financial planning services. However, differences among fees, financial services and resources give them different advantages and disadvantages depending on your personal goals.

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Overview of Vanguard vs. Fidelity vs. Schwab

Vanguard made a name for itself with its low-fee investment products, such as mutual funds and exchange-traded funds (ETFs). It still does this, and even non-Vanguard clients can buy Vanguard funds via a brokerage account. The firm also offers non-proprietary investment products and funds. However, it is not as agile as its competitors when it comes to trading individual equities.

Fidelity is perhaps best known for its personal investment products, namely brokerage accounts that allow users to trade stocks. Clients can invest in a wide range of stocks, bonds and other investment products using a Fidelity brokerage account. Fidelity also makes an effort to provide investment resources to its clients and does not charge much in the way of fees, though more and more brokerages and broker-dealers are moving towards fee-free investment models.

Charles Schwab, known as Schwab for short, is probably the most holistic of the three. While not as well known for its funds as Vanguard, Schwab still has a number of passively and actively managed funds with the option to trade individual equities. It also offers free robo-advisor services, along with human advisors, as well.

Vanguard vs. Fidelity vs. Schwab: Fees

Most brokerage platforms have gotten rid of transaction fees over the past couple of years. Vanguard, Fidelity and Schwab are no exception.

Brokerage account holders at each of these three institutions will not have to pay any commissions or trading fees for stocks. Trading mutual funds is mostly free at all three institutions, particularly for in-house mutual funds. Certain non-proprietary mutual funds may incur transaction costs of up to $49.95 at each institution.

The one place where you will incur consistent transaction costs is options trading. However, transaction costs for options at each institution are comparably quite low. Both Fidelity and Schwab charge $0.65 per options contract, while Vanguard charges up to $1. Keep in mind that these are contract fees, not commissions.

While some, more specific transactions may incur additional fees, the experience using each of these three institutions is quite a low cost and can be entirely free if you only invest in individual equities and in-house funds.

It’s worth noting that these fee schedules don’t include the charges you’ll incur for owning shares of certain funds. Fidelity has a wide variety of funds with no expense ratio, and both Vanguard and Schwab have average expense ratios that are a lot lower than the industry standard.

Vanguard vs. Fidelity vs. Schwab: Services and Features

Understanding the differences in fees among Vanguard vs. Fidelity vs. Schwab can help you make the best decision for your investment strategy.

When comparing investments and brokerage accounts from Vanguard vs. Fidelity vs. Schwab, you will find a relatively similar suite of services. As mentioned before, each institution allows clients to trade individual equities fee-free. Each also offers a wide range of accounts, including 401(k)s, 529 plans, custodial accounts, a variety of individual retirement accounts (IRAs), joint accounts and more.

Each of the three institutions has $0 investment minimums for most accounts. However, Vanguard does have minimums for some of its mutual funds, typically ranging from $1,000 to $3,000. This is fairly competitive, as other funds have even higher minimums.

As noted, Vanguard is well-known for its fund offerings, allowing investors to passively manage their money instead of constantly monitoring a portfolio of individual stocks. While you still have the option for traditional trading, Vanguard’s services are particularly geared towards those who want to invest in mutual funds, as well exchange-traded funds and index funds.

With Fidelity, it’s much easier to trade with no fees or minimums. In addition to commission- and fee-free trading, you will also have access to loads of fee-free funds. This makes passive investing even simpler. On top of that, Fidelity offers its clients one-of-a-kind investment education resources at no charge.

While Fidelity and Vanguard both have their own versions of a robo-advisor service, Schwab’s stands out a bit above the rest. Schwab Intelligent Portfolios takes into account your preferences by having you take a short quiz and then invests your assets in low-cost funds based on your answers. This service is optional, so even if you don’t decide to use it, you’ll still have access to Schwab’s range of brokerage services. Like Fidelity, Schwab has a solid suite of financial and investment resources.

Fidelity’s robo-advisor service is called Fidelity Go. It provides a relatively light advisor service with no minimum balance requirement. There is no advisory fee for accounts with balances under $25,000, but accounts with over $25,000 are charged an annual fee of 0.35% of assets under management.

Vanguard also has a robo-advisor service called Vanguard Personal Advisor Services. This service blends both automated and personalized investment services and charges a 0.30% to 0.31% management fee. It also has a minimum of $50,000, so you may be better off working directly with a financial advisor.

Vanguard vs. Fidelity vs. Schwab: Online and Mobile

Vanguard, Fidelity and Schwab each offer both mobile experiences, in addition to desktop versions. You can even contact the companies directly online or over the phone.

Each company has solid functionality when you visit the desktop website. You can buy and sell equities, funds and more. You can also access any robo-advisor services, transfer money and utilize educational resources.

The mobile apps of each of these institutions vary in popularity and usability, with Schwab sitting somewhere between Fidelity and Vanguard. While the Schwab app has a 4.8-star rating on the App Store, it holds an underwhelming 2.6-star rating on Google Play.

A common criticism is that Schwab overwhelms customers with information. This could be a positive for more seasoned traders, but new investors may feel overwhelmed. In either case, you can still access all the platform’s services on both your phone and computer.

The Vanguard app is not as highly rated, but it sits at 3.5 stars on the Google Play store. Meanwhile, the Apple version of the app has a 4.7-star rating.

Fidelity seems to have the best overall online and mobile experience for customers. While it is similar to Schwab in that it is a little hard to synthesize for newer investors, it still seems to easier to navigate. Plus, with the company’s suite of education resources, new investors should have no problem figuring out how to best use the platform to invest their money.

It is highly-rated, too. On the App Store, the Fidelity app has a 4.8-star rating, and on the Google Play store, it has a 4.6-star rating.

Who Should Use Vanguard, Fidelity and Schwab?

Vanguard, Fidelity and Schwab boast many of the same important features.

Each allows you to invest in a variety of securities, from equities to funds, without paying fees and commissions.
Each has low to non-existent expense ratios for funds.
Each is a capable online trading and account management platform that you can take advantage of.

However, there is potentially a bit of learning required for the platforms first. That said, each stands out for a different reason.

Vanguard stands out because of its impressive suite of exchange-traded, index and mutual fund offerings. Some of these have high minimums, but it makes the platform excellent for anyone with some money to invest. You can also trade individual stocks and bonds with Vanguard, but you’ll usually be better off taking advantage of the fund offerings that the company has curated.

Fidelity stands out slightly above its two competitors, largely because there isn’t much that the company doesn’t do. The company boasts a robust trading platform that can be utilized by both experienced investors and beginners alike. You can use Fidelity’s comprehensive suite of investment tools and educational resources to fine-tune your investment abilities.

Schwab holds up quite well against the competition, too, especially when it comes to its robo-advisor service. You can take advantage of it or invest on your own. However, the firm’s platform tends to focus on investors with more experience.

Bottom Line

A man compares Vanguard vs. Fidelity vs. Schwab.

When comparing Vanguard vs. Fidelity vs. Schwab, there are many similarities. They are three of the most robust, well-known and popular brokerage firms in the country. They cover the basics and much more, making them valuable and useful platforms for all investors, from beginners to advanced traders. While each platform may differ regarding some of their offerings and specialties, they all allow clients to trade without fees and commissions both online and on their mobile devices. Vanguard, Fidelity and Schwab are three solid options for anyone looking to invest their money for the future.

Ask a financial advisor about the best long-term financial strategy to suit your future plans.

Investing Tips

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