Both Vanguard and Fidelity manage huge mutual fund portfolios. But when it comes to which is the better online broker, there is no question: Fidelity's platforms and tools are far and away superior to Vanguard's. Fidelity topped our 2019 online broker reviews, earning 4 1/2 stars, while Vanguard was near the bottom, earning 2 stars. Vanguard's online brokerage presence is bare-bones, with few creature comforts, while Fidelity's web, downloadable, and mobile platforms are so packed with features and tools that one of our criticisms is that it can be difficult to find a particular feature.
In our 2019 Best Online Brokers Awards, Vanguard received an award for Best for ETFs.
Fidelity Investments received awards for Best Overal Online Brokers, Best for Beginners, Best Stock Trading Apps, Best for ETFs, Best for Penny Stocks, Best for Roth IRAs, Best for IRAs, Best for International Trading, and Best Web Trading Platforms.
- Account Minimum: $3,000 for most mutual funds
- Fees: $7/stock and ETF trade, $7 plus $1 per contract for options
- Best for: ETF investing
- Account Minimum: $0
- Fees: $4.95 per stock/ETF, $4.95 plus $0.65/contract per options trade
Vanguard focuses its considerable energy on helping its high wealth clients plan for retirement and other long-term goals. As such, its trading technology is lacking. Fulfilling their long-term focus, there is little of interest to active traders or derivatives traders. There are no streaming quotes; you have to manually refresh the screen to get updates. You cannot trade complex options strategies on Vanguard.
Fidelity's trade execution engine gives its clients a high rate of price improvement. Active Trader Pro, Fidelity's advanced platform, offers streaming data and customizable charting. There is always an order ticket on display, and contextual help has been added to guide you through the process.
- No streaming quotes
- No complex options
- Very simple trading experience with few creature comforts
- Streamlined trade ticket with contextual help available
- Streaming real time data on Active Trader Pro platform
- Excellent order executions that generate price improvement
Mobile and Emerging Tech
Vanguard offers mobile apps for iOS, Android and Kindle Fire devices. The layout is actually much nicer and easier to use than the website. They added mobile check deposit in the last year. Quotes, however, are delayed. There is no online chat capability for contacting customer service.
Fidelity's mobile apps are much fresher and easier to use than the website, which is reflected in the 50% increase in trades placed on mobile devices between 2017 and 2018. The startup screen can be customized, and contextual help has been added to the trade ticket. Watchlists you generate on the website can be viewed on mobile devices as well, and the full range of offerings can be traded on your phone or tablet.
- Very simple app, most useful for checking balances
- Data is delayed
- Mobile check deposit available
- Streaming data and customizable news feed
- Customizable landing page
- Watchlists synch across platforms
News and Research
Vanguard offers a stock screener, and a separate ETF screener. The mutual fund screener is very basic, and focuses on finding Vanguard funds even though they carry funds from many more fund families. Options research is limited to looking at options chains, which are significantly less informative than chains on other broker sites. Charting is extremely basic and includes no customization or technical studies. There are plenty of calculators and planning tools for the long-term investor.
Fidelity's screening tools can be used to narrow down your investment choices across a wide array of asset classes, including stocks, ETFs, options, mutual funds and fixed income. Their proprietary charting packing is augmented by Recognia’s technical patterns and events. On Active Trader Pro, you can set up streaming news feeds and video from Bloomberg TV. The stock snapshot pages include environmental, social and governance (ESG) ratings from MSCI.
- Stock, ETF and mutual fund screeners available
- Planning tools for long-term investing are plentiful
- Extremely basic charting that lacks customization or technical analysis
- Stocks, ETFs, options, mutual funds and fixed income screeners available
- Stock snapshot pages include data for socially responsible investing
- Customizable charting package includes technical events from Recognia
Education and Security
Vanguard's education offerings are fairly basic, and are aimed at very long-term investing. They host occasional webinars that focus on the longer term. The website is encrypted according to industry standards, and you'll face a security challenge when logging in from an unrecognized device.
Fidelity’s online Learning Center contains articles, videos, webinars and infographics that offer education for many investing-related topics such as options trading, fixed income selection, fundamental and technical analysis, and retirement planning. The firm offers webinars frequently, and online coaching sessions for more advanced topics. There are learning programs aimed at beginning investors in the mobile apps. Fidelity conducts a risk assessment when a client logs in, and based on certain criteria, may challenge the client with a two-factor authentication process, or with a security question.
- Education is basic, aimed at long-term investing and goal setting
- Webinars offered occasionally for long-term planning
- Security features include a challenge when logging in from an unrecognized device
- Online learning center contains articles, videos, and other media for a wide range of investing and trading topics
- Learning programs for those new to investing can be accessed from mobile apps
- At logon, a risk assessment is performed
Vanguard's standard commission schedule is very high, at $7 per equity trade, and $7 plus $1 per contract for options. Margin rates are on the high side. There are 1,800 ETFs you can trade without paying a commission, though, and clients with very high account balances are treated to much lower commissions.
Fidelity’s commissions are in the middle of the pack, for the most part. Their margin rates are slightly higher than average. For mutual funds that are not on the no transaction fee list, there is a $49.95 charge for an initial purchase, which is higher than average. Their bond transaction fees are just $1 per bond, and they do not mark up the secondary market bonds, which lowers the yield. Very frequent traders can work out their own commission schedule.
- Stocks/ETF trade fees: $7
- Options fees: $7 per leg plus $ per contract
- Futures fees: Futures trading not enabled
- Stocks/ETF trade fees: $4.95
- Options fees: $4.95 per leg plus $0.65 per contract
- Futures fees: Futures trading not enabled
Vanguard’s strength is maintaining a varied array of low-cost ETFs and mutual funds, but you can buy them on any online broker’s site. If you are looking for trading tools and in-depth education, Vanguard’s offerings come up short. This brokerage seems to actively dissuade investors who want to trade more often than once per year.
Fidelity offers terrific value to every investing experience level. The website continues to undergo some necessary ease-of-use updates, while the Active Trader Pro platform has most of the bells and whistles that a day trader can use. Fidelity's execution quality is terrific at most trade sizes. Fidelity’s development outlook is focused on improving the user experience. We look forward to the website overhaul, but in the meantime, there’s a lot of value for investors and traders here.
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In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.
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