Fidelity vs. Robinhood vs. Vanguard

Daniel Penzing
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About Fidelity

Fidelity is the brand name you can trust for your financial services.

Fidelity is one of the nation’s oldest and largest providers of financial services. Fidelity provides financial advisory and investment services to more than 13 million individuals and institutions in more than 100 countries. The company has been cited as a leader in customer service, as well as in retirement readiness, and is the top provider of workplace savings plans.

Fidelity offers a full range of services for investing and retirement planning through the nation’s largest network of financial advisers and a group of specialists, including stock, bond, and money market consultants, financial planners, and investment counselors.

About Robinhood

Investment app Robinhood has long been heralded for the fact that it is a commission free trading app. While that’s appealing on its own, there’s more to Robinhood than that. It’s been built to be very intuitive and easy to use. You can also access the app on your phone, tablet, and desktop. It makes trading extremely easy for newbies and pros alike. As opposed to Vanguard and Fidelity, Robinhood charges a flat commission for all cash transactions regardless of amount. However, this is actually very beneficial for daytraders as they won’t be paying any additional commission for their trading and won’t have to flip between accounts.

You can’t buy or sell existing contracts with Robinhood. In terms of market exposure, this is actually a negative. Nevertheless, if you trade a lot, Robinhood is going to save you a lot of money in commissions and make your life much easier.

About Vanguard

Founded in 1975, Vanguard has evolved into the largest mutual fund provider in the U.S.

It offers a full range of fund types including US stock, international stock, bond, sector, and specialty funds. These funds are available through its 19 independent fund groups.

Vanguard’s founder John C. Bogle is best known for his advocacy of index investing.

How Are They the Same?

All three companies fundamentally come to play in the world of no-load, low-cost brokerages by providing investors with a way to access the US stock market at a low cost. They are similar in the sense that they offer low-cost index funds (with Vanguard being arguably the cheapest), but still offer a great variety of other investment options from which to choose.

They are also very similar in that they have really polished apps that make it easy to use for any level of interest in investing.

All three are based out of Boston and have do a great job of letting investors know how their money is spent, what their funds look like, and how to best be invested.

How Are They Different?

With all three of these companies, you can trade stocks with no commission, which can be a major cost savings. You do pay a small amount of trading fees so it’s not completely free to buy and sell your stocks, but it’s close.

Fidelity, Vanguard, and Robinhood all offer brokerage services, but there are some key differences between the three companies, and they may be worth considering when deciding which service is right for you.

Fidelity

Fidelity is one of the biggest brokerages on the planet, and you’ve probably heard of them before. They’ve earned an excellent reputation for a number of reasons.

Firstly, Fidelity has been around for a very long time. The company was actually founded in 1946 by Edward C. Johnson II. And if you know anything about the financial services industry, you know that a company’s longevity is a great indication of how well it’s managed and how much it’s trusted. After all, new companies can vanish overnight, but it’s very rare for a company that’s been around for decades to suddenly disappear.

Unique Features

What sets Fidelity apart from other major trading and brokerage firms?

● Extensive List of Commission-Free ETFs on Their Own Brokerage Platform

● Excellent customer service: telephone support, online chat, and a more personable feel

One of the main reasons you might choose Fidelity over Vanguard or Robinhood is if you want to trade on your own and handle your own account without compromising any functionality. Fidelity has a lot of bells and whistles that other major brokerage firms might not offer.

Fidelity has been in the business for more than 60 years, so they’ve developed a high-quality reputation. But before you sign up, make sure you know what you’re paying for. If you’re going to be making a large investment, you’ll want to make sure you’re getting a low trading rate too.

Fidelity offers a full set of tools and trading options plus low commissions. It’s a robust broker with solid customer service.

Features Unique to Fidelity

Fidelity has two separate Premier accounts (Stocks and Retirement) that use the same platform. The Retirement account is an IRA, but both accounts provide tax-advantaged investments.

Lower fees for trading some ETFs. Fidelity offers lower commissions on some ETFs, including S&P 500 ETFs that Fidelity also offers.

Fidelity offers lower commissions on some ETFs, including S&P 500 ETFs that Fidelity also offers. Yield Builder Index Fund invests in corporate bonds.

Investments are held with Fidelity. As long as you are a client in good standing, your securities are safe with Fidelity, unlike with Vanguard and Robinhood, which hold your securities in the custody of a third party.

As long as you are a client in good standing, your securities are safe with Fidelity, unlike with Vanguard and Robinhood, which hold your securities in the custody of a third party. Diamonds/Precious Metals. Fidelity offers investment strategies/products that most discount brokers don’t. These include a Personalized Portfolio Strategy, which uses ETFs and individual stocks to build a portfolio based on your age, investment time horizon and investment risk tolerance. They also offer Diamonds (commodities), Collectibles, Real Estate and Metals (gold). Vanguard does offer gold and silver ETFs, but not individual precious metals.

Features Unique to Robinhood

Robinhood is a different type of investment company. While many companies have vowed to change the way the industry works, Robinhood is the only company to have beaten the giants like E-trade and Fidelity at their own game.

Features Unique to Vanguard

Vanguard is the accounting system used to track the progress of individuals and groups, and is accessible from anywhere with Internet connection. It manages everything from individual inventory to guild bank transactions to raid queues.

A player may set up as many characters on a single server as they wish, and each one may be tracked separately, with their own progression. When a player first creates an account, they must choose a type of account. There are currently four accounts types: Personal (for an individual player), Group (for a group of players), Guild (for members of a particular guild) and Officer (for leader of that group). The difference between these account types is the number of characters permitted on the account, the number of characters and guilds that may be tracked, access to guild vaults, and access to chat transcripts.

One of the features unique to Vanguard is that it will preserve the order of how things are put into a guild’s vault by both players and guild officers. This function is handy for guilds that use the vault for items such as enchants, gems, or high-end consumables.

Vanguard also comes with its own built-in search engine. It is fully functional and allows players to search by name, by guild, and by character.

Minimum Deposits

Fidelity and Robinhood both have no account minimums, but Robinhood does require you to make a recurring deposit.

Vanguard also has no minimum deposit, but does have an account balance minimum. These minimums act as a safeguard to protect Vanguard from excessive trading.

Fees

Standout Features

Fidelity is the oldest of the three, having first opened in 1946.

Fidelity has the most extensive selection of commission-free exchange-traded funds, both in quantity and quality.

Fidelity’s research offerings are extensive.

Robinhood

Robinhood’s commission-free stock trades (automated and manual) have no risk.

Robinhood’s no-fees trading has no limits.

Robinhood’s margin trading has no interest rate fees.

Robinhood’s Robinhood Gold premium services have no fees.

Robinhood’s short selling has no interest fee.

Vanguard

Vanguard has the most comprehensive selection of commission-free ETFs.

Vanguard’s mutual fund commissions are reasonable.

Vanguard’s research is well regarded.

Customer Service

If you have questions, jitters, or concerns about the trade, it will be very helpful to get information or answers about it now. You don’t want to find out something at the actual time of the trade or once it’s done.

In addition, asking questions now may give you a better understanding of what needs to be done on your end before the trade.

Customer service is an extremely important aspect that should never be overlooked. You want a great relationship with the broker, so that their customer service is nothing to worry about. The best agency in terms of customer service, in our expert opinion, is Vanguard.

Security

Suffice it to say, you want the security of your assets to be as high as possible. If you are saving for a goal wherein you know there will be several important deductions in the years leading up to that goal, you don’t want security to be jeopardized by changes in the market before you get to take your deductions.

So you might look at something like the Vanguard target fund. It’s a fund that’s managed by an investment company consistently over time, and many think they have a good reputation. Also, you know there will never be any liquidations or sudden selling of assets.

The same thing goes for Fidelity. They’ve managed funds for a number of years, and in the end they’re not planning to cash you out.

Generally you want to avoid funds that are managed by investment companies that could shut down or merge without notice. Those companies are working on a smaller time horizon.

If you’re investing for the future, you want to eliminate the risk of having your money in a fund managed by one of those kinds of companies as much as possible.

Who Are They Best For?

Fidelity, Robinhood, and Vanguard are three of the most popular discount brokerages and IRAs. Since they offer similar services – like investing in stocks, options, and ETFs – they can all fit the exact same purposes.

That being said, investors may still prefer one over the other for one reason or another. So here’s a bit of an overview of each.

Robinhood

Robinhood is the newest kid on the block – it only launched in 2012. The company benefits from a sleek design and a mobile-first approach. It’s available on every major platform – iOS, Android, Apple Watch, etc. The interface is clean and easy to use, so if you’re looking to invest on the go, Robinhood is worth a look.

Fidelity

Fidelity has been around since 1946 and provides investors with everything they need for long-term investing, from a mobile app to live customer service. One of the “hidden” perks of Fidelity is premium customer service – call their toll-free line and a real person will answer, not an automated phone menu.

Which Is the Best?

Many investors are interested in financial services because, after all, they would like to eventually get the most out of their money. They should be asking this question because the three popular trading services, Fidelity, Robinhood, and Vanguard, are competing for a client’s funds.

Fidelity is traditional investment company that provides investment services for both individual and institutional investors, and it is a member of the S&P 500. Vanguard, an organization that is well known for offering low-cost investments and do-it-yourself retirement plans, is the leading low-cost provider in the mutual fund business. Robinhood is not your ordinary investment firm because it does not charge fees at all.

Robinhood was founded in 2013, and it allows its users to trade stocks and ETFs without paying any commission. The start-up was only offering securities found on the NYSE and NASDAQ. However, with its recent expansion, the platform now has the ability to trade over 6,000 US-traded stocks, options, and ETFs.

The three companies are competing with each other to attract the most number of clients. There is no question that this competition is driving down the cost of trading for the clients. Vanguard is now offering fees to its investors in the form of a lower advisory fee and commission-free trading, while Fidelity and Robinhood are offering commission-free trades.