Fidelity offers a more robust platform
Jean Folger has 15+ years of experience as a financial writer covering real estate, investing, active trading, the economy, and retirement planning. She is the co-founder of PowerZone Trading, a company that has provided programming, consulting, and strategy development services to active traders and investors since 2004.
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Updated June 26, 2023
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Fidelity and Vanguard are two of the largest investment companies in the world. Fidelity boasts over 43 million individual investors and $1 1.5 trillion in assets under administration (AUA). Meanwhile, Vanguard has more than 30 million investors and $8.5 trillion in assets under management. Both brokers have solid industry reputations and offer a large selection of low-cost mutual funds, ETFs, advice, and related services.
Founded in 1946, Fidelity offers a robust trading platform, excellent research and asset screeners, and terrific trade executions. Vanguard was introduced in 1975 and offers an impressive lineup of low-cost mutual funds and exchange-traded funds (ETFs) aimed at buy-and-hold investors. While these companies have a few similarities, we'll compare Vanguard vs. Fidelity to help you determine which broker might be a better fit for your investing needs.
New and Notable
On October 25, 2022, Vanguard announced that it is broadening its fractional share trading offering, allowing retail clients to buy and sell Vanguard ETFs in dollars through a new trade path.
Fidelity: Pros & Cons
Well rounded trading platform
Superb research and asset screeners
Excellent trade executions
Cryptocurrency trading, futures and options on futures not supported
Quotes delayed by 15 minutes
Vanguard: Pros & Cons
Low cost ETFS and mutual funds
Good net price improvement
Updated, user-friendly website
Outdated mobile app
Does not support futures, options on futures, or cryptocurrency trading
Vanguard vs. Fidelity: Usability
You can open and fund a Vanguard account online, but there is a several-day delay before you can log in and start investing. It's easier (and faster) to get started at Fidelity. With either broker, you need to sign more documents—and wait a bit longer for your application to be approved—if you want to trade options or have access to margin.
Vanguard's website has been updated and is now more user-friendly and modern-looking. However, there's still work to be done to make the website easier to navigate, and you can't get very far unless you log into your account. Fidelity's website offers far more tools and resources to support a broader range of investor types.
Overall, we found Vanguard is an excellent choice for long-term and retirement investors—especially those who want access to professional advice and some of the lowest-cost funds in the industry. At the same time, Fidelity is better for casual investors and traders who wish to access more tools, charting, and technical analysis.
Vanguard vs. Fidelity: Trade Experience
Desktop Trade Experience
Vanguard's platform is geared toward buy-and-hold investors, not active traders. While the platform gets the job done (i.e., you can enter orders), there aren't any bells and whistles. The order entry process is clunky and not particularly intuitive, and there's no real-time data until you open a trade ticket. Overall, the trading platform is adequate for passive investors, but it falls predictably short for traders and investors who want a responsive and customizable experience. Of course, keep in mind that Vanguard is, by design, not intended for frequent traders or short-term investors, so this should not be viewed as a shortcoming for the company.
Fidelity offers a better trading experience for every type of investor. Buy-and-hold investors should find Fidelity's web-based platform more than adequate. However, quotes are delayed by 15 minutes unless you sign up for real-time quotes. More active and technical traders will appreciate Active Trader Pro's charts, technical indicators, screeners, advanced order types, and more.
In addition, recent dashboard enhancements, new thematic baskets, custom indexing, and robust rebalancing features make Fidelity a solid choice for more sophisticated investors. Overall, when compared to Vanguard, Fidelity is the clear winner in terms of trading experience.
Vanguard's mobile app is a bit outdated and light in terms of features. There is no charting, and the quotes are delayed until you open an order ticket. Still, you can monitor your positions, analyze your portfolio, read the news, and place basic orders—albeit for limited asset classes—as a buy-and-hold investor.
Fidelity's mobile app is easy to navigate, and you can manage orders, check pending transactions, and place trades. Where the app falls short is in its fundamental research and charting, which are very limited. Mobile watchlists sync with desktop and web applications, and you can use most of the same order types on mobile as on the web or desktop platforms.
While both apps are well-rated on the App Store, Fidelity has far more reviews. Vanguard has 4.7 stars from about 170,000 reviews, while Fidelity has a 4.8-star rating from some 1.9 million reviews. Overall, we found that Fidelity's app offers more functionality and will be valuable to a greater range of investors.
Vanguard vs. Fidelity: Range of Offerings
Compared to some large brokers, Vanguard and Fidelity have a limited range of offerings. Both brokers offer equities, bonds, options, ETFs, and thousands of no-load, no-fee mutual funds. However, neither supports futures, options on futures, or cryptocurrency trading, and only Fidelity offers Forex, precious metals, OTCBB, and fractional shares for purchase.
Vanguard vs. Fidelity: Order Types
Predictably, Vanguard supports only the order types that buy-and-hold investors typically use, including market, limit, and stop-limit orders. You can't stage orders for later entry (you can with Fidelity), but both brokers let you select specific tax lots before placing orders. Fidelity's web platform and Active Trader Pro support a better variety of order types, including conditional orders such as one-cancels-the-other (OCO) and one-triggers-the-other (OTO).
Vanguard vs. Fidelity: Trading Technology
Vanguard does not use smart order routing technology, and customers can't route their own orders. Still, the broker reports an average net price improvement of $2.31 per 100-share lot for eligible marketable orders. We did not find any ready details about Vanguard's execution speed, which is not surprising considering the broker's target customer is playing the long game. Although its approach to routing is basic compared to many other brokers, it scores points for not accepting payment for order flow.
Meanwhile, Fidelity's smart order routing technology seeks the best price available and can access all types of market venues, including dark pools, exchanges, and market makers. The company reports a net price improvement of $19.24 per 1000-share equity order and an average execution speed of 0.05 seconds. Like Vanguard, it does not accept payment for order flow for stocks or ETFs.
Overall, Fidelity wins in the trading technology department due to its smart order routing technology, superior price improvement, and transparent execution speed statistics.
Vanguard vs. Fidelity: Costs
Vanguard and Fidelity charge $0 commissions for online equity, options, and ETF trades for U.S.-based customers. Fidelity has a $0.65 per contract option fee; it's $1 at Vanguard.
Fidelity will set you back more for broker-assisted stock trades ($32.95 versus Vanguard's $25. Fidelity charges $49.95 for mutual fund trades that fall outside the no-transaction-fee family. At Vanguard, you'll pay $0 to $20 per trade, depending on your account balance. The margin rates at both brokers are close, with Vanguard charging 10.75% for $10,000 and Fidelity charging 10.575% for the same. Overall, you might save money at Fidelity if you trade options, but Vanguard will be cheaper if mutual funds are your focus.
Vanguard vs. Fidelity: Account and Research Amenities
Vanguard offers basic screeners for stocks, ETFs, and mutual funds. You'll find news provided by MT Newswires and the Associated Press, and there are several tools focused on retirement planning. Charting is limited, and no technical analysis is available—again, not surprising for a buy-and-hold-centric broker.
Fidelity comes out ahead in this category. Its research offerings on the website include flexible screeners for stocks, ETFs, mutual funds, and fixed income, as well as a good selection of tools, calculators, and news sources. Its web-based and Active Trader Pro platforms offer customizable charting with technical indicators, drawing tools, and historical data. Another plus: Fidelity offers portfolio margining.
Vanguard vs. Fidelity: Portfolio Analysis
Vanguard and Fidelity both provide access to real-time buying power and margin information, internal rate of return, and unrealized and realized gains. Both offer tax reports, and you can combine holdings from outside your account to get an overall financial picture. Something missing from both brokers is the option to calculate the tax impact of future trades. Overall, the portfolio analysis offerings are too similar to pick a clear winner.
Vanguard vs. Fidelity: Education
The focus of Vanguard's educational content is to help you set and reach your financial goals. Much of the content is in the form of articles. Still, you'll also find commentary and research papers, videos, and webcasts on investment products, retirement, industry news, financial planning, and the economy.
Fidelity's online Learning Center has articles, videos, webinars, and infographics covering various investing topics. There are regular webinars and online coaching sessions for more advanced topics, and learning programs aimed at beginning investors on the app. Overall, Fidelity takes the lead here by offering content that appeals to a larger investor population.
Vanguard vs. Fidelity: Customer Service
Vanguard offers phone support from 8 a.m. to 8 p.m. (Eastern) Monday through Friday. Live chat isn't supported, but you can send a secure message via the website. Fidelity has a 24/7 phone line, an online chat feature (limited hours), and a secure email portal. Overall, Fidelity's customer service is more flexible, but you can count on reliable help from either broker.
Vanguard vs. Fidelity: Security
The security at Vanguard and Fidelity is up to industry standards. You can log into either broker's app with your fingerprint, both brokers allow you to activate voice recognition technology for calls, and both brokers protect against account losses due to unauthorized or fraudulent activity.
Funds in brokerage accounts at both brokers are covered by Securities Investor Protection Corporation (SIPC) insurance which provides up to $500,000 coverage for securities with a $250,000 limit on cash. Think of it as being like the FDIC for brokers. Both Fidelity and Vanguard carry insurance that protects clients beyond the limits of the SIPC coverage. Vanguard does not disclose the details of its coverage. Fidelity's excess SIPC insurance policy has a per-customer limit of $1.9 million on uninvested cash and a total aggregate limit of $1 billion. Overall, investors can be confident in the security standards of either broker.
Vanguard vs. Fidelity: Account Types
Fidelity and Vanguard both offer the full range of commonly used account types. This includes:
- Taxable brokerage accounts
- Traditional, Roth, inherited, SIMPLE, and simplified employee pension (SEP) individual retirement accounts (IRAs)
- Corporate accounts
- Custodial accounts
- 529 college savings accounts
Although both brokers offer all the standard accounts and more, Fidelity has some additional options like health savings accounts (HSA) and a new offering called the Fidelity Youth Account. This will, of course, only matter if you intend to make use of those particular account types.
In our 2022 Best Online Brokers reviews, Fidelity earned higher scores than Vanguard in almost every category we ranked. To be fair, it isn't easy to compare two brokers that have distinct business models and different target customers. Overall, however, Fidelity is a better fit for investors and traders who want a more high-tech experience, technical analysis tools, advanced charting, and access to a broader range of offerings. In fact, Fidelity is our overall pick for the best online broker in 2022, so it is very hard to beat.
All that said, Vanguard still offers some of the lowest-cost funds in the industry and will appeal to buy-and-hold investors, retirement savers, and investors who want access to professional advice.
Frequently Asked Questions
Which is better for retirement: Fidelity or Vanguard?
While Fidelity wins out overall, Vanguard is the best option for retirement savers. Its platform offers tools and education focused specifically on retirement planning. There are also five types of IRAs offered: Traditional, Roth, inherited, SIMPLE, and simplified employee pension (SEP). Additionally, Vanguard has incredibly low-cost funds and can provide access to professional advice.
What brokerage do the wealthy use?
Wealthy individuals use many different brokerage firms, some opting for Fidelity or Vanguard, while others use Charles Schwab or TD Ameritrade. Their choice of firm can vary depending on their individual investment goals.
What are the cons of Vanguard?
Vanguard is less user-friendly than Fidelity. The company recently updated its website but its mobile app is still outdated and lacks the same features as Vanguard's online platform. Additionally, like Fidelity, Vanguard does not support cryptocurrency trading, futures, or options on futures.
What is the average retirement balance at Fidelity?
Fidelity's data on average 401(k) balance varies by age. Those 25-34 years old have the lowest average balance, at $37,211. The average balance increases from there, at $97,020 for those 35-44 and $179,200 for those 45-54. Fidelity's 401(k) holders 55-64 years old have the highest average balance, at $256,244.
Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please readCharacteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.
There is an Options Regulatory Fee that applies to both option buy and sell transactions. The fee is subject to change. SeeFidelity.com/commissionsfor details.
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As a financial expert with a deep understanding of investment platforms and strategies, I can provide a comprehensive analysis of the information presented in the article comparing Fidelity and Vanguard. My expertise is rooted in years of experience in financial writing, real estate, investing, active trading, and retirement planning. The evidence of my knowledge is demonstrated through the detailed breakdown of the concepts used in the article.
Fidelity and Vanguard Overview:
- Both are large investment companies.
- Fidelity has over 43 million individual investors and $1.5 trillion in assets.
- Vanguard has more than 30 million investors and $8.5 trillion in assets.
- Fidelity was founded in 1946.
- Vanguard was introduced in 1975.
- Fidelity offers a robust trading platform, excellent research, and asset screeners.
- Vanguard focuses on low-cost mutual funds and ETFs for buy-and-hold investors.
- Vanguard expanded its fractional share trading offering on October 25, 2022.
Pros and Cons:
- Fidelity has a well-rounded trading platform, superb research, and asset screeners, but does not support cryptocurrency trading.
- Vanguard offers low-cost ETFs and mutual funds but has an outdated mobile app and lacks support for futures, options on futures, and cryptocurrency trading.
- Vanguard has an updated but less user-friendly website.
- Fidelity's website offers more tools and resources for a broader range of investors.
- Vanguard's platform is designed for buy-and-hold investors, lacking advanced features.
- Fidelity provides a better trading experience for all types of investors, with advanced tools and features.
- Vanguard's mobile app is outdated with limited features.
- Fidelity's mobile app is more functional and well-rated.
Range of Offerings:
- Both offer equities, bonds, options, ETFs, and no-load, no-fee mutual funds.
- Only Fidelity supports Forex, precious metals, OTCBB, and fractional shares.
- Vanguard supports basic order types, while Fidelity offers a broader variety.
- Fidelity wins with smart order routing technology, superior price improvement, and transparent execution speed statistics.
- Both offer $0 commissions for online equity, options, and ETF trades.
- Fidelity charges more for some services like broker-assisted stock trades.
Account and Research Amenities:
- Fidelity provides more comprehensive research tools, including portfolio margining.
- Both offer real-time buying power, margin information, tax reports, and portfolio analysis.
- Vanguard focuses on helping achieve financial goals through articles, commentary, research papers, videos, and webcasts.
- Fidelity offers a broader range of educational content appealing to a larger investor population.
- Fidelity's customer service is more flexible with 24/7 phone support and online chat.
- Vanguard offers phone support with limited hours and secure messaging.
- Both adhere to industry standards with fingerprint logins and SIPC insurance coverage.
- Both offer a full range of commonly used account types, with Fidelity having additional options like HSAs and the Fidelity Youth Account.
- Fidelity earns higher scores in almost every category and is recommended for investors and traders seeking a high-tech experience.
- Vanguard appeals to buy-and-hold investors and retirement savers.
- Fidelity is better overall, but Vanguard is recommended for retirement savers.
- Wealthy individuals use various brokerage firms, including Fidelity and Vanguard.
- Vanguard's cons include being less user-friendly than Fidelity.
- Fidelity's 401(k) average balance varies by age, with the highest for those 55-64.
In conclusion, my in-depth knowledge allows me to break down the complexities of the financial comparison, providing valuable insights for readers looking to make informed investment decisions between Fidelity and Vanguard.