Updated on May 1, 2024
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Pros
• Great educational resources, especially for long-term investment planning
• Commission-free stock, options and ETF trades
• Low fees
Cons
• Limited trading platform with no real time data
• No physical branches for those who like that
Vanguard is a market leader when it comes to low expense ratios and fewer barriers to access for beginning investors. Vanguard brokerage services are somewhat lacking in real-time data and robust resources for active traders and day traders. But for those with longer-term personal finance goals in mind, like retirement, it offers plenty of utility. Also, Vanguard funds based on target date retirement are available even to those who don’t use the trading platform.
Self-managed retirement accounts on trading platforms like Vanguard typically carry two types of fees: annual account fees and transaction fees. You may also need to pay a minimum deposit to open your account.
Account fees are usually expressed as a percentage of your assets that’s paid each year, e.g., 0.50% per annum. On the other hand, transaction fees are charged exclusively during trading. Annual and transaction fees have decreased dramatically over the past decade, but they’re still an important consideration when choosing a brokerage account.
At Vanguard, you’ll pay:
You can build a retirement portfolio made up of stocks, options, Vanguard ETFs, and Vanguard mutual funds including Vanguard index funds and money market funds. Vanguard investment options are a bit limited compared to other brokers, many of which allow you to invest in cryptocurrency or futures. Also, Vanguard only lets you buy fractional shares of ETFs and doesn’t offer the option for individual stocks.
Vanguard’s stocks and ETFs typically trade with $0 commissions online. The average expense ratios of its ETFs and mutual funds are also some of the lowest in the industry. These low-cost investing options and low-fee mutual funds can help account holders boost their retirement savings with some of the lowest expense ratios in the game.
Even those who don’t invest through Vanguard can take advantage of proprietary Vanguard index funds, including Vanguard target retirement fund options that are designed to help you make investment choices based on when you plan to retire rather than picking and choosing individual assets. These Vanguard index funds and target date funds can make the investment process easier for those who are intimidated by stock trading, which can be an obstacle that prevents some investors from reaching personal finance goals.
Start your 401(k) rollover to a Vanguard IRA in just a few minutes.
Vanguard’s investment options are a bit limited if you want to trade assets other than ETFs and mutual funds. In addition, the online trading platform has limited capability. It doesn’t offer real-time data or technical analysis support. That may be a drawback for experienced investors and day traders looking to take advantage of market fluctuations.
However, for those whose investment objectives are primarily long-term, as well as buy-and-hold investors, these limitations don’t put Vanguard out of the running, especially given the relatively low expense ratio of many of its available investments.
As mentioned above, Vanguard doesn’t carry account minimums, though some specific features, such as access to Investor Shares or Admiral Shares, may require a minimum investment. Minimums range from $1,000 to $100,000, depending on the Vanguard mutual fund.
Vanguard also offers access to live investment advisor services, but these wealth management options require significant investment minimums. For example, to get a dedicated Vanguard personal advisor, you’ll need at least $500,000 in assets under Vanguard investment management. That may be out of reach for some retirement investors.
Vanguard offers a wide range of customer support lines for investors of various stripes, including dedicated helplines for personal investors, employee-sponsored retirement plan participants, and corporate contacts. The company enjoys a high customer service ranking of over four out of five stars on Trustpilot.
Again, however, for financial advisor services, clients will likely need a substantial net asset value to qualify. Vanguard Digital Advisor is a robo-advisor option available that may offer an extra boost at a more achievable account minimum, but it doesn’t provide human interaction.
Phone Number: 877-662-7447
Phone Hours: Monday through Friday: 8:30 am – 7:00 pm ET
Fax: 484-582-4544
Email Address: Contact through Vanguard’s website.
Support Center: https://support.vanguard.com/
Vanguard offers many different investment account options for its customers, including a regular Vanguard brokerage account in which you can invest funds however you wish. For retirement clients, Vanguard offers both traditional and Roth IRAs.
Vanguard’s traditional IRA allows investors to make pre-tax contributions to their retirement funds, which means you may get a tax break in the year you contribute. Traditional IRA funds then grow tax-free and are taxed as normal income in retirement. And thanks to Vanguard’s low fee schedule and many low-cost funds, it’s possible to spend very little on managing the account in the interim.
Like Roth IRAs offered by other brokerage firms, a Vanguard Roth IRA is funded with after-tax money. That means account holders can look forward to tax-free retirement funds when the time comes, as long as they follow certain rules, like the Roth five-year rule. One of the best Roth IRA features is that they aren’t subject to required minimum distributions, or RMDs. That means Roth accounts can be passed on to heirs as a tax-free gift.
SEP IRAs are designed for self-employed people and small business owners and can maximize the amount of money you and your employees are able to contribute to your retirement accounts. Vanguard offers a SEP IRA for those with an eligible business structure.
Vanguard brokerage services include a wide selection of investment account types, such as standard brokerage accounts and goal-oriented investments like education savings plans. If you’re saving for several different goals in addition to retirement, Vanguard’s platform allows you to manage it all from one online dashboard.
Unlike some competitors, like Charles Schwab, the Vanguard group doesn’t offer deposit accounts like checking accounts and savings accounts. There’s no Vanguard credit card, either. Vanguard brokerage services are the company’s main focus, so Vanguard account holders will need external accounts for their daily banking needs.
If you’re a buy-and-hold investor looking for low fees, Vanguard may be the place for you. And if you’ve got a substantial initial investment, Vanguard personal advisor services could help you reach your goals. However, if you’re looking for a wide variety of investment choices and a high-tech platform, you’ll likely get frustrated by Vanguard’s narrow investment selection and simplistic trading platform.
If you’re looking to fund your new Vanguard IRA with a 401(k) rollover, Capitalize can help. We’ve made it our mission to make this process easier for everyone. We can handle the entire process for you. Most of the process can be done online and our rollover experts will guide you through any of the manual parts. Get started with your 401(k) to Vanguard IRA rollover in just a few minutes.
