Fidelity and Vanguard are two of the largest investment companies in the world. Fidelity boasts 40 million individual investors and $11.8 trillion in total customer assets. Meanwhile, Vanguard has more than 30 million investors and $8.1 trillion in global assets under management. Both brokers have solid industry reputations and offer a large selection of low-cost mutual funds, ETFs, advice, and related services.

Founded in 1946, Fidelity offers a robust trading platform, excellent research and asset screeners, and terrific trade executions. Vanguard was introduced in 1975 and offers an impressive lineup of low-cost mutual funds and exchange-traded funds (ETFs) aimed at buy-and-hold investors. While Vanguard and Fidelity have a few similarities, we’ll compare the two to help you determine which broker might be a better fit for your investing needs.

Usability

You can open and fund a Vanguard account online, but there is a several-day delay before you can log in and start investing. It’s easier (and faster) to get started at Fidelity. With either broker, you need to sign more documents—and wait a bit longer for your application to be approved—if you want to trade options or have access to margin.

Vanguard’s website has (finally) been updated and is now more user-friendly and modern-looking. However, there’s still work to be done to make the website easier to navigate, and you can’t get very far unless you log into your account. Fidelity’s website offers far more tools and resources to support a broader range of investor types.  

Overall, we found Vanguard is an excellent choice for long-term and retirement investors—especially those who want access to professional advice and some of the lowest-cost funds in the industry. At the same time, Fidelity is better for casual investors and traders who wish to access more tools, charting, and technical analysis. 

Trade Experience

Desktop Trade Experience

Vanguard’s platform is geared toward buy-and-hold investors, not active traders. While the platform gets the job done (i.e., you can enter orders), there aren’t any bells and whistles. The order entry process is clunky and not particularly intuitive, and there’s no real-time data until you open a trade ticket. Overall, the trading platform is adequate for passive investors, but it falls predictably short for traders and investors who want a responsive and customizable experience. Of course, keep in mind that Vanguard is, by design, not intended for frequent traders or short-term investors, so this should not be viewed as a shortcoming for the company.   

Fidelity offers a better trading experience for every type of investor. Buy-and-hold investors should find Fidelity’s web-based platform more than adequate. However, quotes are delayed by 15 minutes unless you sign up for real-time quotes. More active and technical traders will appreciate Active Trader Pro’s charts, technical indicators, screeners, advanced order types, and more. Overall, when compared to Vanguard, Fidelity is the clear winner in terms of trading experience.

Mobile Experience

Vanguard’s mobile app is a bit outdated and light in terms of features. There is no charting, and the quotes are delayed until you open an order ticket. Still, you can monitor your positions, analyze your portfolio, read the news, and place basic orders—albeit for limited asset classes—as a buy-and-hold investor.

Fidelity’s mobile app is easy to navigate, and you can manage orders, check pending transactions, and place trades. Where the app falls short is in its fundamental research and charting, which are very limited. Mobile watchlists sync with desktop and web applications, and you can use most of the same order types on mobile as on the web or desktop platforms. 

While both apps are well-rated on the App Store, Fidelity has far more reviews. Vanguard has 4.7 stars from about 170,000 reviews, while Fidelity has a 4.8-star rating from some 1.9 million reviews. Overall, we found that Fidelity’s app offers more functionality and will be valuable to a greater range of investors.

Range of Offerings

Compared to some large brokers, Vanguard and Fidelity have a limited range of offerings. Both brokers offer equities, bonds, options, ETFs, and thousands of no-load, no-fee mutual funds. However, neither supports futures, options on futures, or cryptocurrency trading, and only Fidelity offers Forex, precious metals, OTCBB, and fractional shares for purchase.

Order Types

Predictably, Vanguard supports only the order types that buy-and-hold investors typically use, including market, limit, and stop-limit orders. You can’t stage orders for later entry (you can with Fidelity), but both brokers let you select specific tax lots before placing orders. Fidelity’s web platform and Active Trader Pro support a better variety of order types, including conditional orders such as one-cancels-the-other (OCO) and one-triggers-the-other (OTO).

Trading Technology

Vanguard does not use smart order routing technology, and customers can’t route their own orders. Still, the broker reports an average net price improvement of $2.31 per 100-share lot for eligible marketable orders. We did not find any ready details about Vanguard’s execution speed, which is not surprising considering the broker’s target customer is playing the long game. Although its approach to routing is basic compared to many other brokers, it scores points for not accepting payment for order flow.

Meanwhile, Fidelity’s smart order routing technology seeks the best price available and can access all types of market venues, including dark pools, exchanges, and market makers. Thecompany reports a net price improvement of $19.24 per 1000-share equity order and an average execution speed of 0.05 seconds. Like Vanguard, it does not accept payment for order flow for stocks or ETFs.

Overall, Fidelity wins in the trading technology department due to its smart order routing technology, superior price improvement, and transparent execution speed statistics.

Costs

Vanguard and Fidelity charge $0 commissions for online equity, options, and ETF trades for U.S.-based customers. Fidelity has a $0.65 per contract option fee; it’s $1 at Vanguard.

Fidelity will set you back more for broker-assisted stock trades ($32.95 versus Vanguard’s $25. Fidelity charges $49.95 for mutual fund trades that fall outside the no-transaction-fee family. At Vanguard, you’ll pay $0 to $20 per trade, depending on your account balance. The margin rates at both brokers are close, but Vanguard’s are a bit lower. Overall, you might save money at Fidelity if you trade options, but Vanguard will be cheaper if mutual funds are your focus.

Account and Research Amenities

Vanguard offers basic screeners for stocks, ETFs, and mutual funds. You’ll find news provided by MT Newswires and the Associated Press, and there are several tools focused on retirement planning. Charting is limited, and no technical analysis is available—again, not surprising for a buy-and-hold-centric broker.

Fidelity comes out ahead in this category. Its research offerings on the website include flexible screeners for stocks, ETFs, mutual funds, and fixed income, as well as a good selection of tools, calculators, and news sources. Its web-based and Active Trader Pro platforms offer customizable charting with technical indicators, drawing tools, and historical data. Another plus: Fidelity offers portfolio margining.

Portfolio Analysis

Vanguard and Fidelity both provide access to real-time buying power and margin information, internal rate of return, and unrealized and realized gains. Both offer tax reports, and you can combine holdings from outside your account to get an overall financial picture. Something missing from both brokers is the option to calculate the tax impact of future trades. Overall, the portfolio analysis offerings are too similar to pick a clear winner.

Education

The focus of Vanguard’s educational content is to help you set and reach your financial goals. Much of the content is in the form of articles. Still, you’ll also find commentary and research papers, videos, and webcasts on investment products, retirement, industry news, financial planning, and the economy.

Fidelity’s online Learning Center has articles, videos, webinars, and infographics covering various investing topics. There are regular webinars and online coaching sessions for more advanced topics, and learning programs aimed at beginning investors on the app. Overall, Fidelity takes the lead here by offering content that appeals to a larger investor population.

Customer Service

Vanguard offers phone support from 8 a.m. to 8 p.m. (Eastern) Monday through Friday. Live chat isn’t supported, but you can send a secure message via the website. Fidelity has a 24/7 phone line, an online chat feature (limited hours), and a secure email portal. Overall, Fidelity’s customer service is more flexible, but you can count on reliable help from either broker.

Security

The security at Vanguard and Fidelity is up to industry standards. You can log into either broker’s app with biometric (face or fingerprint) recognition, and both brokers protect against account losses due to unauthorized or fraudulent activity.

Vanguard’s excess Securities Investor Protection Corporation (SIPC) insurance provides each client with $49.5 million for securities and a cash limit of $1.9 million per customer, with an aggregate limit of $250 million for all clients. Fidelity’s SIPC insurance has a per-customer limit of $1.9 million on uninvested cash. There’s no per-customer dollar limit on coverage of securities, but the total aggregate excess policy is $1 billion. Overall, investors can be confident in the security standards of either broker.

Our Verdict

In our 2021 Best Online Brokers reviews, Fidelity earned higher scores than Vanguard in every category we ranked. To be fair, it isn’t easy to compare two brokers that have distinct business models and different target customers. Overall, however, Fidelity is a better fit for investors and traders who want a more high-tech experience, technical analysis tools, advanced charting, and access to a broader range of offerings. In fact, Fidelity is our overall pick for the best online broker in 2021, so it is very hard to beat. All that said, Vanguard still offers some of the lowest-cost funds in the industry and will appeal to buy-and-hold investors, retirement savers, and investors who want access to professional advice.