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Better Option for Brokerage Account -- TROW, or Vanguard ?
I like Fidelity - customer service has been excellent (in my experience, I know it likely varies). Plus, international trading (which is a nice option even if you don't or rarely use it.) London has a lot of investment trusts (sort of their version of CEFs), including the Rothschild Fund (aka RIT Capital Partners.)
I should have mentioned I have a large-ish block of stock I currently hold which pays a decent dividend, and which I automatically reinvest; I am hoping that can be executed with Vanguard / TROW w/out too much difficulty.
Several years ago, I tried to open an account at Vanguard so I could purchase their funds without the transaction fee that Schwab charges. Vanguard lost my application, not once, not twice, but three times...at that point, I decided to stay with Schwab.
I should have mentioned I have a large-ish block of stock I currently hold which pays a decent dividend, and which I automatically reinvest; I am hoping that can be executed with Vanguard / TROW w/out too much difficulty.
That should be no issue at major brokerages, depending on the stock. Some brokerages are better than others, but stocks with at least decent volume should be no concern. Most US stocks and etfs should be DRIP-able, but where I run into trouble are sometimes newer issues or especially foreign names (although I've been able to sign up some ADRs for DRIP.)
IMHO, physical access to brokerages is overrated. At Fidelity, if I have any complex issues, it seems they always need to call the back office - something I could just as easily do without standing there waiting for the rep to talk with someone on the phone.
Both T. Rowe Price and Vanguard seem to have originally set up their brokerages as a convenience for their fund investors. Comments you read from the nineties will reflect this. VBS (Vanguard Brokerage Services) changed clearing houses several years ago (it used to be Pershing, it is now self-clearing, like Schwab, Fidelity, etc.) More recent reviews reflect this improvement.
In contrast, T. Rowe Price still uses Pershing, as does TIAA-CREF, and many smaller brokerages. I know BobC has not had kind words about Pershing. My experiences with Pershing are more mixed, but at this point I wouldn't consider Pershing a plus.
T. Rowe Price, like most brokerages, gives you more perks as your total AUM increase. (At $100K, you get free M* membership.) In contrast, Vanguard only counts Vanguard investments (Vanguard funds, Vanguard ETFs, Vanguard annuities, etc.) toward your level of service. At $1M (Flagship), they'll give you 25 free TF fund trades/year.
As a fund investor what would attract me to Vanguard is their access to some institutional class shares at lower mins than you find elsewhere (e.g. PIMCO @ $25K vs. $100K at most other brokerages).
@Shostakovich: Scroll and read today's article on Fidelity Brokerage from Barron's. "Fidelity Tops In Price Improvement for Retail Investors" Regards, Ted
Correct me if I'm wrong . Last year I went from Vanguard account to Vanguard brokerage account. If I didn't do this switch , it was going to happen at a later date, so I just went ahead & ( got'er ) done !! This happen in April of 2014. I guess next time I check into Vanguard I should see if I'm the proud owner of 1 or 2 accounts. Have a good weekend, Derf
Vanguard used to give you one account number for Vanguard MFs and a different account & number for investments bought thru the brokerage. Last year they consolidated - Vanguard funds, other family funds, stocks, etfs, etc. are all accounted for under one account/number now. (Of course you'll have more than one account if you have, for example, a taxable account and an IRA with them.) The consolidation made V. just like Fidelity in that regard.
At the beginning of 2014, the V. brokerage also got rid of its absurd 6-month no-redemption-fee holding period for non-V. mutual funds, matching Fido's 60-day rule.
Hi @AndyJ Have not checked; but just from the top of the head recall. The 60 day rule "sale" holding period for some funds is not necessarily a Fido fee, if I recall properly. Fido, of course; does have rules like this for some of their own funds (90 days, etc.) and other vendors set similar rules for some of their funds as well.
Sidenote: we have Fido brokerage accts. which we use to comingle everything (stocks, etfs, funds). About 3 years ago I did a "boo-boo" with an electronic purchase (wrong ticker, which of course means wrong fund). I was really busy during this time and realized 2-3 days after the fact that this wasn't the fund I had planned to purchase. This fund had a 60 or 90 day (short term trading fee of .75%). I called, spoke directly with a Fido rep., explained the situation (already had the fund and didn't want more) and they reversed the transaction.........ended with thank you; and there won't be any fee. Have a nice day. A 5 minute phone call fix.
Hi @Maurice At this house, too. Four IRA accounts all wrapped inside their our brokerage account. The whole thing is so seamless for functions for each account. Obviously, one may travel the monies here and there without a blink; some stocks, some etfs, regular active managed funds.....a whatever function that has always been smooth for us. We also like the layout as with the screener: We've had monies at Fido since the late 1970's.....no complaints. Take care, Catch
Ameritrade is a delightful 180 day holding period.... used to be 90.
Depends what kind of account you have with them. 180 days seems "right" for a taxable brokerage account, but their terms are different for IRAs and for HSAs (which seem to be considered IRAs there for most purposes).
Vanguard used to give you one account number for Vanguard MFs and a different account & number for investments bought thru the brokerage. Last year they consolidated - Vanguard funds, other family funds, stocks, etfs, etc. are all accounted for under one account/number now. (Of course you'll have more than one account if you have, for example, a taxable account and an IRA with them.) The consolidation made V. just like Fidelity in that regard.
This has some drawbacks. From the brokerage account, you cannot direct dividends into an outside account; you have to take the dividends in your core/settlement account and manually move them to your outside account. You cannot do a Roth conversion in dollars, you must specify shares. (This may matter in some states where IRA distributions, including Roth conversions are state tax exempt only up to a specified dollar amount.) And you can't write checks from a MM account within a brokerage.
That last one could be significant, since Vanguard does not provide cash management services (called a VanguardAdvantage account) for any price until you reach Voyager Select ($500K in Vanguard fund) level. Then they charge you $30/year, until you reach Flagship level ($1M).
msf: Cash management ? Can't a person set up transfer from VG to personal checking account. One day turn around & you can write all the checks you need. I've transferred money into VG, but NOT out. Thanks for your reply, Derf
Seriously, the only bank accounts I have are for other benefits - a local bank account ($250 balance) to get a safe deposit box and a legacy BofA eChecking account ($0) to get a 10% bonus on my credit card cash rewards.
Bill pay, ATM, checking - all out of my brokerage accounts. Merrill Lynch pioneered CMAs a third of a century ago.
Yes, you can have VG transfer money to a bank account. Every time you get a dividend from a fund, you'll need to check that it has hit your settlement account, then transfer that amount to your bank. (VG will automate transfers, but you can't set it up for a variable amount, such as the dividends from a fund.)
I have VG fund dividends deposited directly and automatically into my non-VG brokerage account (where I have full CMA features), but that's because they are in VG fund accounts, not a VG brokerage account.
BTW, there can be a benefit to using a "real" bank. Some financial institutions won't set up links to brokerages. Capital One 360 (not to be confused with Capital One) would not set up a link to Fidelity (Fidelity uses UMB as its bank for checks, but the account doesn't show up as a "real" bank). But Capital One 360 had no problem setting up a link to Schwab bank (not a Schwab brokerage account), because that is a real bank.
Vanguard used to give you one account number for Vanguard MFs and a different account & number for investments bought thru the brokerage. Last year they consolidated - Vanguard funds, other family funds, stocks, etfs, etc. are all accounted for under one account/number now.
Hi AndyJ,
This process is not completed. Vanguard has made it a point to consolidate Flagship clients last and many have not been converted yet.
Hi @AndyJ, Have not checked; but just from the top of the head recall. The 60 day rule "sale" holding period for some funds is not necessarily a Fido fee, if I recall properly.
The 60d early redemption fee I meant is Fido's for a non-Fido fund purchased NTF. Of course the funds themselves may have redemption fees of their own. Sorry Catch, should've mentioned the NTF part.
Anyhow, Vanguard did dump their old 180-day NTF absurdity and matched Fido's terms.
msf: "And you can't write checks from a MM account within a brokerage."
Yes, when they converted my account, I received a note that the old check-writing scheme was no longer valid, but that I could specify a Vanguard fund in the account for check-writing. I did so and they sent a new batch of checks.
Mona, they still haven't finished converting all accounts? Whatsamatta Vanguard?
AndyJ, well, if one buys into the rational at Vanguard, the reason is they want to make certain all the bugs are worked out first. I have no idea what bugs they have or are referring to.
msf: "And you can't write checks from a MM account within a brokerage."
Yes, when they converted my account, I received a note that the old check-writing scheme was no longer valid, but that I could specify a Vanguard fund in the account for check-writing. I did so and they sent a new batch of checks.
Interesting. Nice to know. I've never seen that at any other brokeage. Thanks.
Comments
I am looking for a vehicle to hold about 8 stocks and 4 mutual funds (taxable account). I rarely trade.
Vanguard appeals to me because it has tremendous availability of funds (internal and external). TROW because they have an office near my office.
Currently with JPM, but the account is not large, and I'm getting tired of broker calls and pressure to buy.
http://www.ritcap.com/about-us
The Witan funds, too, including the multi-manager Pacific fund, which is part managed by Matthews, part by Aberdeen and part by GaveKal.
http://www.witanpacific.com/about-the-trust/profile-and-objective
Both T. Rowe Price and Vanguard seem to have originally set up their brokerages as a convenience for their fund investors. Comments you read from the nineties will reflect this. VBS (Vanguard Brokerage Services) changed clearing houses several years ago (it used to be Pershing, it is now self-clearing, like Schwab, Fidelity, etc.) More recent reviews reflect this improvement.
In contrast, T. Rowe Price still uses Pershing, as does TIAA-CREF, and many smaller brokerages. I know BobC has not had kind words about Pershing. My experiences with Pershing are more mixed, but at this point I wouldn't consider Pershing a plus.
T. Rowe Price, like most brokerages, gives you more perks as your total AUM increase. (At $100K, you get free M* membership.) In contrast, Vanguard only counts Vanguard investments (Vanguard funds, Vanguard ETFs, Vanguard annuities, etc.) toward your level of service. At $1M (Flagship), they'll give you 25 free TF fund trades/year.
As a fund investor what would attract me to Vanguard is their access to some institutional class shares at lower mins than you find elsewhere (e.g. PIMCO @ $25K vs. $100K at most other brokerages).
You asked about div reinvestment. Both brokerages do, here are their pages:
Vanguard dividend reinvestment
T. Rowe Price disclosures (open the 2nd to last disclosure at the bottom of the page)
Regards,
Ted
I guess next time I check into Vanguard I should see if I'm the proud owner of 1 or 2 accounts.
Have a good weekend, Derf
At the beginning of 2014, the V. brokerage also got rid of its absurd 6-month no-redemption-fee holding period for non-V. mutual funds, matching Fido's 60-day rule.
Have not checked; but just from the top of the head recall.
The 60 day rule "sale" holding period for some funds is not necessarily a Fido fee, if I recall properly. Fido, of course; does have rules like this for some of their own funds (90 days, etc.) and other vendors set similar rules for some of their funds as well.
Sidenote: we have Fido brokerage accts. which we use to comingle everything (stocks, etfs, funds). About 3 years ago I did a "boo-boo" with an electronic purchase (wrong ticker, which of course means wrong fund). I was really busy during this time and realized 2-3 days after the fact that this wasn't the fund I had planned to purchase. This fund had a 60 or 90 day (short term trading fee of .75%). I called, spoke directly with a Fido rep., explained the situation (already had the fund and didn't want more) and they reversed the transaction.........ended with thank you; and there won't be any fee. Have a nice day.
A 5 minute phone call fix.
Anyone correct me on this, if you know otherwise.
Regards,
Catch
My reaction when they changed that?
At this house, too. Four IRA accounts all wrapped inside their our brokerage account.
The whole thing is so seamless for functions for each account. Obviously, one may travel the monies here and there without a blink; some stocks, some etfs, regular active managed funds.....a whatever function that has always been smooth for us.
We also like the layout as with the screener:
We've had monies at Fido since the late 1970's.....no complaints.
Take care,
Catch
For example, here's the fee schedule for a relative's account (90 days):
http://www.tdameritraderetirement.com/forms/ACS1009.pdf
That last one could be significant, since Vanguard does not provide cash management services (called a VanguardAdvantage account) for any price until you reach Voyager Select ($500K in Vanguard fund) level. Then they charge you $30/year, until you reach Flagship level ($1M).
See: https://personal.vanguard.com/us/whatweoffer/stocksbondscds/feescommissions
(click on fees for other services).
VanguardAdvantage description: https://personal.vanguard.com/us/help/FAQVAAContent.jsp
(Note: even though the fee/commission schedule is dated Jan 2015, I cannot find any application for a Vanguard Advantage account.)
Thanks for your reply,
Derf
Seriously, the only bank accounts I have are for other benefits - a local bank account ($250 balance) to get a safe deposit box and a legacy BofA eChecking account ($0) to get a 10% bonus on my credit card cash rewards.
Bill pay, ATM, checking - all out of my brokerage accounts. Merrill Lynch pioneered CMAs a third of a century ago.
Yes, you can have VG transfer money to a bank account. Every time you get a dividend from a fund, you'll need to check that it has hit your settlement account, then transfer that amount to your bank. (VG will automate transfers, but you can't set it up for a variable amount, such as the dividends from a fund.)
I have VG fund dividends deposited directly and automatically into my non-VG brokerage account (where I have full CMA features), but that's because they are in VG fund accounts, not a VG brokerage account.
BTW, there can be a benefit to using a "real" bank. Some financial institutions won't set up links to brokerages. Capital One 360 (not to be confused with Capital One) would not set up a link to Fidelity (Fidelity uses UMB as its bank for checks, but the account doesn't show up as a "real" bank). But Capital One 360 had no problem setting up a link to Schwab bank (not a Schwab brokerage account), because that is a real bank.
This process is not completed. Vanguard has made it a point to consolidate Flagship clients last and many have not been converted yet.
Mona
Anyhow, Vanguard did dump their old 180-day NTF absurdity and matched Fido's terms.
Yes, when they converted my account, I received a note that the old check-writing scheme was no longer valid, but that I could specify a Vanguard fund in the account for check-writing. I did so and they sent a new batch of checks.
Mona
Derf