investingsimple logo
Menu

Vanguard Brokerage Review 2020: Best Investing Platform?

FTC Disclosure: Some of the links on this site are affiliate links, which means that if you choose to make a purchase, we may receive a commission. This commission comes at no additional cost to you.
Written by Cari Scribner
Updated on July 14, 2020

Vanguard Brokerage was launched with a specific type of investor in mind. If you’re looking to buy stocks and hold onto them to build, for example, a robust retirement account, this could be the ticket for you.

But if you’re looking to ride the rollercoaster of quick trades, you are probably not a good candidate.

Vanguard is best for long-term or retirement investors looking for low-cost financial products. These include index fund and Exchange Traded Fund (ETF) investors.

That’s not to say Vanguard doesn’t offer a wide array of products. In this review, we will be covering exactly what Vanguard has to offer to see if it is a good fit for you.

Vanguard Brokerage
  • Fees
  • Low Commissions
  • Account Types
  • Asset Selection
  • Active Trading
  • Retirement Investing
4.3

Summary

Vanguard Brokerage Services may be a good venue to dip your toes in the water and gain key info about how to plan for your retirement at every stage of your life. It’s a very stable company with more than 40 years of experience under its belt. Odds are it’s a pretty safe bet for long-term investors.

That being said, if you are a short term investor looking to trade in and out of stocks, that is simply not what this platform is designed to do. Vanguard is best for those investing for the long term, especially retirement investing.

Pros

No commissions for online trades

Low fee funds available

Low cost guidance through Digital Advisor

Cons

High minimum of $50,000 for Personal Advisor Services

Not ideal for active stock trading

Investment Products

Vanguard offers a number of different investment options. You can, of course, invest in the Vanguard funds. Or, you can also trade individual stocks or funds from other companies.

Account Types

One area where Vanguard shines is that they offer numerous different account types. A lot of other investing apps only offer basic account types.

Rollovers and Transfers

You can fund your Vanguard account through traditional means, or you have the option of transferring an existing account or rolling over a 401(k).

Zero Commission Trading

Vanguard offers a hefty bang for your buck with its commission-free trading. However, this is only when you buy or sell ETFs, stocks or Vanguard mutual funds online. Broker assisted trades often carry a hefty commission.

Vanguard commissions were historically in the $5 to $7 range before they recently dropped these transaction fees.

What’s more, you will also have access to more than 150 mutual funds from Vanguard and more than 3,000 funds from other companies that also charge zero transaction fees. That’s a large pond to fish from!

A handful of Vanguard mutual funds charge fees in order to help cover high transaction costs and also to discourage people from short-term trading.

How Does Vanguard Make Money?

Vanguard makes money from giving professional advice to both people and businesses.

They also earn money from retirement plan record keeping. They are nonprofit in the sense that all profits go to the ongoing expenses of fund operation and employees. Vanguard has a robust internal profit-sharing plan for example.

Advisor Services

As you can imagine, Vanguard will overwhelmingly recommend low-cost Vanguard ETFs and mutual funds to build your portfolio. But you can discuss your own thoughts and investment ideas with an advisor to find the best fit for you.

However, Vanguard Personal Advisor Services is only available to people who have at least $50,000 with Vanguard, and that’s a pretty steep minimum.

In order to sign up for Personal Advisor Services, you must confirm the following:

  • You're a U.S. citizen and your mailing address is in the United States.
  • You're not a company insider or control person.

Vanguard financial advisors will give you tried-and-true tips on how to manage these types of accounts yourself as part of your personal financial plan:

  • 401(k) and 403(b) participant accounts.
  • Individual 401(k) accounts.
  • 529 accounts.
  • UGMA/UTMA accounts.
  • Other investment accounts you hold outside of Vanguard.
  • Tax-savings initiatives

What’s The Catch?

There is an asset management fee, although it is minuscule.

The annual fee for Vanguard Personal Advisor Services is 0.30% of assets under management. That’s $3 for every $1,000 in your portfolio. And to offset this minor cost, advisors will recommend smart tax strategies to maximize your tax savings so you can keep more of your money in your pocket.

Saving For Life Events

Whether you’ve been in the investment arena for years or you’re a newbie, you’re bound to have heaps of questions along the way.

For example, you may be overwhelmed by the notion of saving for your child’s education. Vanguard advisors have boiled it all down to 3 easy steps:

  1. Find the right kind of account you will need for your college savings
  2. Choose investments for your account
  3. Open the account online

Expense Ratios

One area where Vanguard shines is having very low investment fees. Vanguard funds are some of the lowest fee funds available today.

The average Vanguard mutual fund and ETF expense ratio is 82% less than the industry average.

Mutual funds

Most Vanguard mutual funds will require you to put down a minimum investment of $3,000.

However, you can invest in any Vanguard Target Retirement Fund or in Vanguard STAR Fund with as little as $1,000.

ETFs

The minimum investment for all Vanguard and non-Vanguard ETFs is only the price of one share of the financial product you’re buying.

Vanguard ETF list

Stocks, CDs and Bonds

The minimum investment for individual securities is also the price of one share.

Retirement Planning At Every Age

If you're like many people in their 20s, building a retirement fund is the last thing on your mind.

But Vanguard has structured a plan to help you prepare for your retirement starting at age 20.

Here's what this plan looks like based on your age:

Ages 20–49: Saving

  • Learn the basics of saving for retirement
  • Prioritize your savings goals
  • Learn about IRAs
  • Get help saving

Ages 50–64: Getting Ready

  • Learn advanced stages of planning for retirement
  • Calculate when you will have enough to retire
  • Get help planning

Ages 65+: Living It

  • Learn the tools of managing your money in retirement
  • Tool: How long will my savings last?
  • Get help managing budget in retirement

Other Resources

On the Vanguard site, you’ll find a library of helpful articles to expand your horizons.

Some recent topics have included:

  • Find stress management strategies; focus on how to move forward
  • Minimize tax consequences when drawing from investments
  • Switch to a crisis-mode budget temporarily
  • Rebuild your finances so they’re stronger in the future

Vanguard Digital Advisor

Last fall, Vanguard had a test-run of its Digital Advisor. Since then, they expanded their pilot program to a larger group of people, while also pledging to tweak the system and make upgrades.

Digital Advisor was created to foster the basic principles of Vanguard’s investment methods. These include having clear goals, creating a diversified portfolio, rebalancing to align to your asset allocation, and managing risk.

In today’s volatile markets, it may be wise to have professional financial advisors help you weather the storm, set goals, and stick to them in the long term.

Retirement Savings

Digital Advisor can guide you to a savings plan and investment strategy based on your unique personal and financial circumstances.

It translates your retirement goals into a long-term strategy and optimizes your money by investing it into up to four broadly diversified Vanguard ETFs. Digital Advisor then manages the investments for you so they remain aligned with your goals.

When your life’s circumstances change, you can return to your personal online dashboard, make updates, and get a real-time adjustment of your plan.

Low Cost

Vanguard bills Digital Advisor as part of its ongoing commitment to providing personal, affordable, and accessible advice designed to help give investors their best possible chances for success.

  • Low Cost: Pay only about $1.50 a year for every $1,000 you invest. That’s a target net advisory fee of 0.15%.
  • Low Minimum: Enroll with just $3,000 in each Vanguard Brokerage Account you want Digital Advisor to manage. The service currently accepts traditional IRAs, Roth IRAs, and individual non-retirement accounts.

No Outside Owners

Vanguard is a not-for-profit in that its 30 million investors own the funds that own the company. In other words, there are no outside owners, which helps keep costs low.

Vanguard Pros

  • Pay nothing to trade stocks, ETFs, and Vanguard mutual funds online
  • Easy access to more than 160 no-transaction-fee mutual funds from Vanguard and more than 3,000 funds from other companies
  • Zero commissions online, keeping your best interests in mind
  • Very detailed retirement planning for every decade starting in your 20s

Vanguard Cons

  • A handful of Vanguard mutual funds charge fees designed to help cover high transaction costs and discourage short-term trading
  • Not aimed at short-term buying and selling
  • You may prefer to talk to a real person about trading, rather than a digital advisor

Vanguard Brokerage Services may be a good venue to dip your toes in the water and gain key info about how to plan for your retirement at every stage of your life. It’s a very stable company with more than 40 years of experience under its belt. Odds are it’s a pretty safe bet for long-term investors.

That being said, if you are a short term investor looking to trade in and out of stocks, that is simply not what this platform is designed to do. Vanguard is best for those investing for the long term, especially retirement investing.

Keep Reading:

vanguard brokerage review
Ready To Learn About Investing?
Subscribe to the Investing Simple Newsletter!
We respect your privacy. Unsubscribe at any time.
TAGS:

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Stock Rover
From stock screening and charting, to investment research and portfolio construction, Stock Rover provides a robust all-in-one platform for the do it yourself investor.
Try Stock Rover
Betterment
The smart money manager.
Betterment provides investment management and access to financial planners. Basic plans start at a 0.25% annual fee.
Try Betterment
Fundrise
Passively invest in private real estate deals with as little as $500. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
Try Fundrise
© Copyright 2018 - 2020 Investing Simple LLC. All Rights Reserved. Investing Simple is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Investing Simple has advertising relationships with some of the offers listed on this website. The information on Investing Simple could be different from what you find when visiting a third-party website. All products are presented without warranty. For more information, please read our full disclaimer.
Developed by Stallion Cognitive
envelopemagnifiermenucross-circlechevron-down-circle
>
Copy link