Move your money from Fidelity to Vanguard

Move your money from Fidelity to Vanguard


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Old 10-24-2016, 09:13 AM
retiredguy123 retiredguy123 is online now
Platinum member
Join Date: Feb 2016
Posts: 1,792

I still cannot find any difference between Vanguard and Fidelity regarding lost or stolen money. Both companies will reimburse the customer for unauthorized transactions. Neither will be responsible for customer negligence. I have accounts with both companies, and don't know about any "insurance" offered by Fidelity. Please tell me what I am missing???

Old 10-24-2016, 10:56 AM
Greg Nelson's Avatar
Greg Nelson Greg Nelson is offline
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Join Date: Mar 2014
Location: Minnesota
Posts: 592

My wife is with Vanguard, I'm with Fidelity. I did buy VCR and VGHCX and neither is doing well
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Old 10-24-2016, 12:30 PM
xNYer xNYer is offline
Join Date: Apr 2008
Posts: 69

I have used both Vanguard and Fidelity and enjoy the convenience of having a local Fidelity office for a variety of reasons.

FUSEX the Fidelity fund index fund has an exp ratio of .09
VFINX the Vanguard equivalent has an expense ratio of .16

Fidelity offers many more managed funds and options, but if you only compare the passively managed accounts the fees are very similar.
Old 10-24-2016, 01:35 PM
paperclip202 paperclip202 is offline
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Join Date: Jan 2013
Location: Village of Poinciana
Posts: 28

Yes, but if you have $10k, you can buy VFIAX for .05 (Admiral shares are always cheaper than investor shares).

I get it. If you like to be able to walk into a local office, that is fine. Just remember that Fidelity is owned by the Johnson's who are billionaires (worth about $22B) and Vanguard is owned by its investors. Hidden Johnson billionaires found in Fidelity fund empire

Just look at the fund flows from Morningstar.

Active funds 1 year flows
Vanguard +$30.3 billion
Fidelity -$40 billion decline

Passive funds 1 year flows
Vanguard +$223.1 billion
Fidelity +$25.4 billion

Somebody mentioned Paul Merriman and he is great.

The Ultimate Buy and Hold Strategy 2016 - Paul Merriman | Paul Merriman - how to add value, small cap, reits, EM

Vanguard | Paul Merriman -- Vanguard sample allocations

Fidelity vs. Vanguard: Which is best? by Paul Merriman

Many investors think the choice between having their money at Fidelity Investments or at Vanguard is a tossup. It's not.

Even though Fidelity is a great company with many successful funds, in my estimation, Vanguard is clearly better for investors who are building a portfolio of basic asset class funds.

There's nothing wrong with Fidelity, and for many years I have been helping investors with Fidelity-sponsored 401(k) plans choose the best available funds. Many investors are wedded to Fidelity, T. Rowe Price or other fund families through their 401(k) or similar retirement plans. These people deserve guidance on the best ways to use their plan options.

But if you have a choice, you should look "under the hood" for some details about Fidelity and Vanguard. Every time I do that, I find that Vanguard comes out on top. If your goal is to make your retirement money do the most that it can for you and your family without taking any more risk than you need to, then you should look under the hood too.

Let's start by noting a fundamental difference between these two companies. Vanguard is actually owned by the shareholders of its mutual funds. If the company is profitable (and it is), those profits go to the people who own Vanguard funds, not to outside investors.

This is an unusual business model, similar in some ways to that of credit unions and other cooperatives that ultimately operate for the benefit of their customer-members. Fidelity, on the other hand, is owned by the company's employees and by a series of family trusts.

This brings us to the topic of fees and expenses paid by investors. Vanguard has no incentive to charge any more than necessary to keep the company healthy. But the owners of Fidelity do better when the company charges more to investors. So Fidelity's incentive is to charge what the traffic will bear.

And as most investors know, higher charges mean lower returns. Two funds can have identical portfolios, but if one of them levies higher charges, its investors will have lower returns. There's just no way to get around that equation.

Following this obvious logic further, two investors can save the same amounts of money at the same times — and even retire on the same date. But if one of them achieves lower returns, he or she will have less money to support a retirement income and less money for potential bequests to family members and charities.

Now we are ready to talk about returns. So let's look at the facts. The Hulbert Financial Digest for many years has calculated the results of my portfolio recommendations.

For the 10 years ended Dec. 31, 2012, my moderate (60% equity) portfolio at Fidelity returned 7.8%; in that same period my moderate Vanguard portfolio returned 9.1%. The difference might not seem very important. But it is.

On a one-time investment of $10,000, the Fidelity portfolio (with all earnings reinvested) produced $21,193 versus $23,892 at Vanguard. That difference, $2,789, represents nearly 28% of the entire initial investment.

And that is only for 10 years. If you continued the calculation out for 10 more years, the difference would be worth more than 120% of the entire initial investment.

In other words, little things can mean a lot.

My all-equity recommendations over the same period, according to Hulbert Financial Digest, produced returns of 8.7% at Fidelity and 10.3% at Vanguard.

These numbers tell you more than you might think. An all-equity portfolio is always much riskier than one with 40% in bonds. Yet Fidelity investors who took all that extra risk did not even match the returns of the much less volatile Vanguard moderate portfolio.

These portfolios were (and are) based on my belief in wide diversification in equity asset classes that have historically produced the most return per unit of risk. That means international stocks as well as U.S. stocks, small-cap stocks as well as large-cap stocks, value stocks as well as growth stocks. It also means real-estate stocks and emerging markets stocks.

Whenever possible I recommend low-cost index funds for each of these asset classes.

When Fidelity does not have an index fund in an important asset class, I choose the best fund available.

Why did (and does) Vanguard do so much better? The answers are pretty simple. Vanguard has lower expenses, lower turnover and more index funds. That means higher returns.

Fidelity rightly brags about its huge pool of talented analysts and fund managers, and there's no doubt they work very hard. But savvy investors want results. And they will find more of what they want, in my opinion, at Vanguard than at Fidelity.

The lesson here isn’t really about whether to use Vanguard or Fidelity. The important lesson is never forget the potential damage high expenses, turnover and active management missteps can cost you in the long run.

For the record, I have no financial relationship with either Fidelity or Vanguard (or any other fund company for that matter). I'm interested only in what should motivate serious investors: Results.

Further reading: Check out the relevant discussion in my book "101 Investment Decisions Guaranteed to Change Your Financial Future," available for free downloads.

Last edited by paperclip202; 10-24-2016 at 02:54 PM.
Old 10-24-2016, 05:13 PM
xNYer xNYer is offline
Join Date: Apr 2008
Posts: 69
Default Fees

FUSVX is the equivalent of the Vanguard fund.
You stated that Vanguard expense ratio is .05.
FUSVX ! The equivalent fund, has an expense ratio of .045.

I fail to see how Vanguard has an advantage in expense ratios, it is curious how insistent you are.
Old 10-25-2016, 08:40 PM
tcxr750 tcxr750 is offline
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Join Date: May 2014
Location: Cleveland Suburb
Posts: 484

Originally Posted by msfooter View Post
I would be very interested in leaning more about the "Vanguard four" including percentages and the "two other" funds. Please share your success with us. Jimmie
The following funds with percentages came up on the Vanguard website in 2015. I haven't seen anything similar in 2016. It was based on risk tolerance, etc.
The funds were VBMFX, VGTSX,VTIBX VTSMX. Search the Vanguard website to determine percentages for your risk tolerance, goals, etc.
One model portfolio consisted only of VPGDX.
Another portfolio created by one of Raymond James top advisors in NEOhio, consisted of more than 28 funds and has outperformed the other models by 1.5% this year. Last year not so good. See your local Raymond James advisor.
The important issue to me was that a professionally managed portfolio of 28 funds matched the Vanguard portfolio of 4 funds. The big difference, no 1% management fee and no free coffee.
Old 10-25-2016, 09:27 PM
retiredguy123 retiredguy123 is online now
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Join Date: Feb 2016
Posts: 1,792

One thing you need to realize is that when stock brokers promote their own funds, they cherry pick the winners. For example, they may set up and operate 20 in house funds for a year or so, and then promote the 2 best performing funds by showing clients how great those 2 funds did, but they don't mention the 18 losers. If you operate enough funds, some of them will have good returns.
Old 10-26-2016, 03:41 PM
petsetc petsetc is offline
Join Date: Mar 2015
Posts: 91

Vanguard's 4 fund portfolio is Total US Stocks, Total US Bonds, Total International Stocks and Total International Bond is a no-brainer way to cover all the bases. The Trick is in allocation and rebalancing. Personally, I think the portfolios by Paul Merriman Vanguard suggestion which are more slice-and-dice are more efficient based on you risk tolerance. I fund the the weight allocated to bond funds to be too great, and also, the international bond funds to be undesirable.

Finally, since, in recent years, bond funds have trended with, not oppose, stocks, that my bond fund strategy is to use short and mid-term US govt bond funds.

Schwab can't be beat
Old 10-26-2016, 05:44 PM
TomSpasm TomSpasm is offline
Join Date: Jan 2012
Location: Haciendas at Mission Hills
Posts: 34
Default Schwab can't be beat

I use Charles Schwab and I don't see how they can be beat. I have 3 IRAs, a brokerage account and a checking account. There are no fees on any accounts, and they refund all ATM fees every month. In other words, there is no cost to me unless I buy or sell a security. They have numerous no-fee ETFs and Mutual Funds with fees of less than .1 percent. Their smart-phone app, which I rarely use, seems to allow me to do whatever I would need to do. I can buy either Vanguard or Fidelity Funds or ETFs, and I have several Vanguard ETFs in the Schwab accounts.

Better yet, if I have a question, I have never failed to get a live, American English speaking rep on the phone in less than 60 seconds, and if they don't know the answer to my question, they transfer me quickly to someone who does. I don't know how you can get any better than that!
Old 10-27-2016, 12:56 PM
Dannny Dannny is offline
Junior Member
Join Date: Sep 2013
Posts: 6

Thanks for your insight and experiences.

I've been a Fidelity investor for many years and most recently have been very unsatisfied with their services. I am considering using a professionally managed financial planner which I have not used in the past. So if Vanguard provide this service at no charged that in deed is huge.

Can you give me a name and contact info a Vanguard?

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