In the July commentary David S. says ...I far prefer T. Rowe. Fidelity forever seems to be scrambling to expand The Fidelity Empire, T. Rowe seems to be focused on managing my portfolio. So I moved money from Fidelity to T. Rowe....
I was wanting to ask what MFO contributors use for a brokerage house and why. Especially those in or nearing retirement.
Personally I have experience with Fidelity and Vanguard but only in the accumulation phase. As retirement nears I will have 401's to rollover and would like to consolidate both mine and my wife's portfolios. Due to work retirement plans we now have monies in 4 different investment companies. Once retired the 2 main 401's will need to be rolled over.
Vanguard, Fidelity or T. Rowe Price? What are your thoughts.
Art
Comments
Here's M*'s latest set of reports on target date fund series by some of the largest families. (Premium membership required).
https://www-prd.morningstar.com/articles/847110/morningstar-targetdate-fund-series-reports.html
I think anyone can access the reports it links to; here are the links for reports on three different series of target date funds:
Vanguard: https://news.morningstar.com/pdfs/STUSA04OVV.pdf
Fidelity: https://news.morningstar.com/pdfs/STUSA04OLH.pdf
T. Rowe Price: https://news.morningstar.com/pdfs/STUSA04OMN.pdf
And a more detailed report on the T. Rowe Price Retirement Target Date Funds; however this report is three years old.
https://mpera.mt.gov/Portals/175/documents/EIACPacket/20170126/V.d.Morningstar_Addendum.pdf
Note that T. Rowe Price has two different series of target date funds, which it calls Retirement Funds and Target Date Funds. The former are more aggressive.
https://www.troweprice.com/content/dam/fai/Collections/DC Resources/Target Date Solutions/GlidePathComparison.pdf
You're asking about brokerages though, and that's a different question. A nice thing about Fidelity's brokerage is that you can now get both Fidelity funds and T. Rowe Price funds NTF.
As far as brokerage services are concerned, Fidelity is way ahead of the others. Vanguard's comes in for its share of criticisms, but they've improved over time. It seems reasonably competent though not first tier in variety of services or quality or even hours of operation. I haven't used T. Rowe Price's brokerage, and I dare say few have unless they're primarily Price fund investors. It's more of a convenience offering by Price for its fund investors than it is a full fledged brokerage.
Fidelity is especially suited for decumulation, because you can pay a one time transaction fee to set up your position in a cheaper institutional share class of a fund, and you pay nothing to sell shares periodically. (Schwab has a similar pricing structure).
Vanguard is of course better if you want Vanguard open end funds. Many Vanguard funds are not available through Fidelity, and those that are cost $75 to buy (as opposed to Fidelity's customary $49.95 charge for most transaction fee funds). Also, Vanguard provides access to some institutional class shares with lower minimums than at Fidelity. Finally, if you have over $1M in Vanguard funds, you get 25 free transactions per year, which you can use to buy and sell transaction fee funds of other families through their brokerage.
Both VG & Schwab have notified me that it's time to take RMD's.
Happy 4/TH to All, Derf
All my experience is with Charles Schwab where I rolled most of my 401k and pension-lump to an IRA when I left my long time employer. That was about 5 years ago. At the time I wavered keeping everything in my employer's 401k at TRP or transferring everything to an IRA at TRP or transferring to CS. I chose CS for a few reasons:
1- maybe the biggest reason was they had a local office. I much prefer a human, 1 on 1 sit down than phone or computer contact. I ended up being linked to a very nice guy who has gained my trust. He is often just my sounding board for ideas I have. He calls or emails about every 6 months or so to check in and see how things are going. And best of all, I don't pay a dime for the advice, feedback and help! Schwab does offer many different options for paid advisory including a very low cost advisory service linked to their robo portfolio. I do have money in the robo, but at this time I haven't gone the advisor route. They also offer the standard 1% fee where they manage everything in your financial life. Not for me but maybe for some.
2- the product selection, everything from 1000's of funds, ETFs, banking products like MMs, CDs, credit cards, checking and savings accounts, numerous managed portfolio options.
3- the option to have multiple accounts at one place. My mind tends to like "buckets" or separating money for different purposes. A separate 3 year retirement withdrawal account with MM, CDs, treasuries that is linked to my credit union checking account is an example.
4- the online and local learning seminars to just hear new ideas or learn different skills and options (I'm not great at it, but I like to dabble or "play" in stocks and there was plenty of info on that along with a trading platform to manage buys and sells).
Just some personal reasons for where I ended up. At 65 I'm still working full time but will probably go part time or quit altogether soon. Good luck Art.
Schwab - great services fees reasonable but trading slightly expensive
Vanguard - has so many private bonds.... Great mf and fees for bonds very cheap... Little costly to buy bonds and individuals stocks ETFs funds
Boa Merrill edge - probably very good free trades but limited amount of bonds
We use all three but 401k and sep-ira in Vanguard firm because of so many bonds, easy trading Platforms and many free Vanguard etf funds trading opportunities... Also soeasy to sell privately owned bonds in Vanguard
Before moving to TDA, we were primarily invested directly through TRP and would not hesitate to do that again. But, currently I don't see any benefit to it as we have easy access to non TRP funds with lower minimums than required by TRP's brokerage.
Also, closing our 5 TDA accounts would trigger account closing fees which TRP would not compensate us for despite the amounts involved. The fees TRP pays to TDA for our TRP funds would easily be paid back to TRP in savings in a fraction of a year.
Fwiw. Your mileage will probably vary.
I have been with Fido for nearly 50y and have not had or found a reason to switch. (Owning both their funds and others'.) V good c/s at our levels, which by this time are nonsmall, I suppose. (As I have written before, with some non-Fido funds, once you hit a given (nonlow) $ level, you can move to a cheaper share class at no charge or fee. This may not be just a Fido thing, though.)
We also are with Merrill, having been w/ BoA and its predecessors for almost 50y. Again at our nonsmall level their treatment is good, zero-commish trading and responsive c/s. Rinky-dink in some respects --- their fractional cleanup settlement is lame, general account sweeping likewise, cash holdings worthless as to interest, and finally they do not permit purchase of some desirable entities. There are often other amateur-hour signs as well. Low speed to their account events, sell then buy, that sort of thing. But convenient and of course integrated w BoA.
Some family members are w Vanguard and Schwab and are not notably happy with either, and these are not picky financial people either. I have been w E-trade and a couple other places in the past, not as slick an experience.
The happiest relative is one who has all her moneys w a UBS guy, I believe, and gets top-tier individual treatment, breaks and discounts, sound advice, management, planning, executions, etc., also sometimes free tickets and whatnot. I do not want to know what she pays for all this and am too cheap to do that kind of thing myself.
Other happy campers have individual indy managers, CFP types, I think.
For example, while Fidelity automatically calculates and distributes the RMD for my inherited Roth IRA annually, one year I noticed that the figure it gave for my RMD was about 4x as high as it should have been. Fidelity acknowledged the error (which has only happened once in many years) and corrected it immediately.
At Merrill Edge, I submitted a paper(!) form for a partial Roth conversion exactly a week before Christmas last year, and it was executed in two days. But this year, when I submitted the identical request (only the number of shares was different) right after Memorial Day, nothing happened for two weeks. I contacted Merrill Edge, and they claimed they were experiencing high volumes of requests. Sure, lots of people must be doing tax loss harvesting, Roth conversions, etc. in June.
I've a relative in the process of moving managed accounts into Vanguard's hybrid human/robo program. I was asked to help in the process (participate in the calls). Could have been the luck of the draw - which reps and advisors we were dealing with - but I was impressed with how well the process was handled, how tax concerns were addressed, how Vanguard did not insist on converting everything now into Vanguard funds (that will be done over time). And how they modeled a dynamic drawdown strategy where the amounts withdrawn would vary within limits based on performance.
I've used Schwab off and on for decades. Absolutely no complaints. Great service, and only four blocks from me. I've just not found a compelling reason to keep both Schwab and Fidelity, so I'm gradually moving away from Schwab. (Schwab does provide an ATM/debit card with no foreign exchange fee and worldwide rebates; this is the only unique feature that interests me but it's not enough to dissuade me from consolidating.)
If one is going to use Merrill, they have pretty good bonuses for moving accounts. Every so often they'll offer 50% more. Between now and Sept 5th they're doing even better, with bonuses that are 2/3 to 100% more than their usual offers.
Fidelity offers 2 years worth of (300-500) free stock/ETF trades depending on the amount moved, but no cash. Schwab doesn't appear to have any significant offers going, but rumor has it that they will match other offers. Vanguard being cheap, is, well, cheap - no offers, ever.