Fidelity Vs Vanguard Investment 2021: Why You Must Choose Any of These Brokerages

Fidelity-Vs-Vanguard
Image from: Vanguard vs. Fidelity Investments investopedia.com

Fidelity Vs Vanguard, which brokerage is best for you?

The first step to profitable investment is choosing a brokerage service that aligns with your investing goals. Whether you’re a beginner, passive, or active investor, misplacing your investment priorities can cost you valuable time, money, and opportunities. Don’t risk your finances!

In this article, we have put Fidelity and Vanguard through a comprehensive review process including the pros and cons. Read through to know the right one for you.

Vanguard and Fidelity are the two largest investment companies in the world. According to recent data, Fidelity boasts 32 million individual investors and $8.3 trillion in total customer assets, while Vanguard has more than 30 million investors and $6.2 trillion in global assets under management.

Choosing between Fidelity and Vanguard can seem a bit tough given that both brokers have solid industry reputations and offer a large selection of low-cost mutual funds, ETFs, advice, and related services.

However, It’s best to compare the requirements of each broker. By comparing your options you can discover the most suitable firm for your financial needs.

About Fidelity

Fidelity is the largest broker-dealer in the United States with $6.7 trillion in assets under management. Founded by Edward Crosby Johnson II in 1946.

Fidelity recently launched a group of mutual funds including the Fidelity ZERO Large Cap Index Fund (FNILX), Fidelity ZERO Total Market Index Fund (FZROX), Fidelity ZERO International Index Fund (FZILX), and Fidelity ZERO Extended Market Index Fund (FZIPX) with zero expense ratio.

Fidelity is listed among brokers that have eliminated commissions on most stock, ETF, and options trades. However, options traders will still need to pay 65 cents per contract.

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About Vanguard

Founded by John Bogle in 1975, Vanguard is the largest investment company that provides mutual funds and the second-largest provider of exchange-traded funds (ETFs) by assets under management based on recent data.

Vanguard offers low-fee mutual and exchange-traded funds. When you buy and sell Vanguard funds in a Vanguard account, you don’t pay any trade commissions when you handle the trade yourself online.

Overview of Vanguard and Fidelity Investments

VanguardFidelity
 Best option for passive or “set-it-and-forget-it” investorsTerrific value for beginner to advanced investors
 Helps you save on taxes and earn more towards retirement Works well for active investors and passive investors
 Offers a ton of tools to plan for long-term retirement More screeners, real-time data, and customizable charts
 Low-cost for Vanguard mutual funds Mobile app offers more comprehensive tools and real-time quotes
 Includes a mobile app to check on your portfolio and make some simple trades More customer support options for online users via chat and social media

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Vanguard vs. Fidelity: Which One should you go for?

Features of Vanguard mobile app:

  • Available to iOS, Android, and Kindle Fire users
  • Ease of use
  • Data is not delivered in real-time
  • No streaming quotes
  • Has Mobile check deposit

Features of Fidelity mobile app:

  • Customizable news feed
  • Streaming quotes, data, and more research tools
  •  Customizable home screen
  •  Watch lists and syncing across platforms

Range of Offerings

Fidelity and Vanguard allow you to trade most of the usual suspects you’d expect from a large brokerage firm, including equities, bonds, OTCBB, commission-free ETFs, and thousands of no-load, no-fee mutual funds.

These two brokers do not support futures, options on futures, or cryptocurrency trading, and only Fidelity offers Forex. The table below best explains their offerings.

Asset Vanguard Fidelity 
No-Load, No-Fee Mutual Funds3,6303,540
Commission-Free ETFsAllAll
Futures/CommoditiesNo No
Fractional SharesNoNo
CryptocurrencyNoNo
Future OptionsYesNo
Short SalesYesYes
BondsYesYes
Complex OptionsYesYes
Robo-AdvisoryYesYes
International ExchangesYes
Yes
ForexNoYes
OTCBB and Penny StocksYesYes
Source: Investopedia

Vanguard vs. Fidelity: Fees

One of the most important things you should consider when picking a brokerage firm to work with is the fee. You have to choose a fee that suits your budget.

Vanguard offers lower the expenses that ETFs charge to around 0.07%, which equates to about $7 per $10,000 invested. On the other hand, Fidelity mutual fund costs can vary but often have expense ratios as low as 0.15% for index funds.

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Vanguard Pros and Cons

Pros

  • Offers free trade for some ETFs and mutual funds
  • Great mobile trading platform
  • Easy account opening

Cons

  • Features only basic research tools
  • Available to only the US market
  • High financing rates (margin rates)

Fidelity Pros and Cons

Pros

  • Provides excellent trade executions for investors.
  • Offers a wealth of research and extensive pre-set and customizable asset screeners.
  • Your uninvested cash is automatically swept into a money market fund to help contribute to overall portfolio returns.

Cons

  • Not available to Non-U.S. citizens or residents.
  • Traders and investors must manually refresh the data when using the website.
  • Has a wide offering of securities, but no commodities or options on futures.

Who is Vanguard Investment best for?

  •  Investors with a portfolio of at least $10,000
  •  Investors who want better mutual fund options
  •  Those who want a simpler trading experience
  •  Investors who want a more hands-on retirement broker

Who is Fidelity Investments Best For?

  • Best for Beginner Investor
  • Active and passive investors
  •  Investors who want streaming real-time data
  •  High-velocity traders who want a low-cost platform with excellent trade executions

Vanguard vs Fidelity: Which is Safer?

Another important factor to consider when choosing a broker is security. You need to go for a safer and secure option.

That said, Vanguard features some website security including encryption and a security challenge if you log in from an unrecognizable device.

Fidelity analyzes every login attempt and has a risk assessment feature to ensure that users are logging in from a recognized location or device. You may encounter challenges with two-factor authentication if you try to access your account from a different location or device.

In summary, Fidelity offers better security using its two-factor authentication and security process.

Conclusion

Vanguard and Fidelity are known for their mutual funds. They have a lot to offer when it comes to brokerage services for IRAs.

Fidelity is great for investors who want to keep fees low and all of their brokerage accounts under one roof. Investors who prefer Vanguard’s funds may be better off going that route, while Fidelity loyalists would be wise to open an account with Fidelity, as it offers inexpensive and free ways to invest in its own mutual funds and ETFs.

In summary, if you want help with financial planning, mutual funds, or retirement and brokerage accounts, both have great options.

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