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While Vanguard is a household name in the trading industry, it doesn’t offer forex, futures or cryptocurrency. And its lackluster research tools might cause you to consider another trading platform. Here are five of Vanguard’s top competitors.
TD Ameritrade offers a user-friendly trading platform for beginner and active traders. Like most brokers, you pay no commissions on online stocks, ETFs or options trades and only a small fee per options contract. Choose from over 2,300 ETFs and 12,000 mutual funds. But where TD Ameritrade leaves Vanguard in the dust is the ability to trade forex and futures. TD Ameritrade also offers 24/7 phone support and social media chatbots. And you can live chat with someone on its app, which is not currently available with Vanguard.
If you're new to investing or prefer to take a backseat approach, Betterment might be a good option that vies with Vanguard's Digital Advisor — but without Vanguard's $3,000 minimum balance. Input details about your finances, risk tolerance and goals, and Betterment will match you to a portfolio that fits your needs. And if you prefer a more hands-on approach, its Flexible Portfolios let you control your asset class weights. Unlike Vanguard, which only allows fractional shares on mutual funds, Betterment portfolios offer fractional shares on global stock and bond ETFs, so no cash is left uninvested. And as an extra perk, your portfolio automatically rebalances and includes tax benefits, such as tax-loss harvesting, to maximize your profit.
Account types
Retirement, Robo-Advisor
Annual fee
0.25% on balances up to $99,999 0.4% on balances of $100,000+
Available asset types
ETFs, Cryptocurrency
Annual fee
0.25% on balances up to $99,999 — 0.4% on balances of $100,000+
Fidelity offers access to international markets and robust research tools with real-time market data and advanced charting. Use customizable filters to sift through 6,000 stocks and ETFs or view recommendations from independent, third-party experts. Fidelity also has a patented Trade Armor tool to help manage your entry and exit strategies and minimize risk. To top it off, in a head-to-head comparison between Vanguard and Fidelity, a working paper from the Economic Research Initiatives at Duke University found that Fidelity had a lower expense ratio than Vanguard as of April 2019. And with its on-demand webinars, coaching sessions and weekly trading classes, beginner investors don't need to shy away from this Vanguard competitor.
Both Charles Schwab and Vanguard offer commission-free trades and in-house financial coaching services. Schwab sets itself apart by arming you with powerful research tools, including proprietary Schwab equity ratings, premium independent research from third-parties like Credit Suisse and a customizable desktop platform. And unlike Vanguard, Schwab lets you trade futures and has no minimum investment for mutual funds.
Robinhood's minimalist platform makes it straightforward for rookie investors to start their trading journeys with commission-free online trades. But unlike most brokers, Robinhood doesn't charge a fee for options contracts. Its basic charting and stock screening software help ease new users into the investing world. By upgrading to Robinhood Gold for $5 a month, you'll also access professional research from Morningstar, an independent investment research company. And even though this Vanguard competitor is newer to the game, it keeps up with the times by offering cryptocurrency — something still missing from Vanguard's portfolio.
Here are a few distinct reasons to become part of this investor-owned company and some things to consider before opening an account.
Pros
Low expense ratio
Variety of investment products and account types, including IRAs to build your retirement nest egg or a brokerage account to grow your wealth
Large selection of mutual funds
Cons
Limited research tools and data
Basic trading platform and mobile app
Annual fees
How to transfer your brokerage account
If you’re replacing your broker, the steps to transfer your funds may vary depending on the brokerage you’re currently using and the platform you’re going to. Vanguard charges a $10 wire transfer fee for each holding you redeem if your assets are under $1 million. It doesn’t charge a fee to close your account. Vanguard is enrolled in the Automated Customer Account Transfer Service (ACATS) to transfer your funds. To transfer your account, you’ll need to do the following.
Fill out a transfer form with your new broker.
Your new company contacts your current broker to initiate the transfer of your assets.
Your current broker prepares the request.
Your old broker deposits your funds, generally within six business days.
Note: Your new broker may not allow proprietary mutual funds or ETFs from your old broker.
Compare trading platforms
Here are signup details for a few brokers you might consider:
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Finder is not an adviser or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
Kimberly Ellis is a personal finance writer at Finder, specializing in banking and financial literacy. After teaching in public and private schools, Kimberly zeroed in on personal financial education to help families and kids develop lifelong money skills. She hails from New York City, graduating summa cum laude from Queens College with a BA in elementary education and mathematics, as well as a New York State teaching certificate. She’s also an aspiring polyglot, always in a book and forever on the hunt for the perfect classic red lipstick.
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