Written by Tessa Campbell and Rickie Houston; edited by Laura Grace Tarpley; reviewed by Elias Shaya
Updated
2024-03-21T20:23:00Z
- About Vanguard
- Overall Rating
- Pros and Cons
- Ways to Invest
- Fees
- FAQs
- How Vanguard Compares
- Why You Should Trust Us
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Vanguard
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Insider’s Rating
4.49/5
Perks
You can trade stocks without commissions here, and Vanguard offers margin accounts and commission-free options trading for more advanced investors.
Account Minimum
$0 ($3,000 for Vanguard Digital Advisor; $50,000 for Vanguard Personal Advisor Services)
Fees
0% (0.20% to 0.30% for professionally managed portfolios)
Pros
- Commission-free stocks, ETFs, and options
- Brokerage, automated, and advisor-managed accounts available
- Thousands of low-cost mutual funds
- Multiple resources with expert analysis and market insights
- Several retirement accounts and services for retirement plan participants
Cons
- Higher options contract fee than other discount brokerages (Vanguard charges $1 per options contract)
- No separate trading platforms for advanced traders; no fractional shares
- No cryptocurrencies
Insider’s Take
Vanguard is a reasonable low-cost option for all types of investors. Whether you're an active trader, passive investor, or retirement-focused individual, you should be able to find what you're looking for.
Product Details
- Promotion: None at this time.
- App store rating: 4.7 iOS/ 1.8 Android
- Consider it if: You're a long-term focused investor looking for access to a variety of account types and investment choices.
- Awards: Morningstar gave Vanguard a 'High' assessment in its 2022 Robo-advisor Landscape report, listing it as the #1 platform out of 16 robo-advisors
About Vanguard
Vanguard is a popular online brokerage offering just about everything for every type of investor. Its products include brokerage accounts, robo-advisor, advisor-managed accounts, 529 education savings plans, IRAs, and more.
Vanguard also has an array of websites for different purposes. Its websites cater to personal investors, institutional investors, financial professionals, and global clients. And if you're solely focused on retirement, its expansive mutual fund selection is hard to pass up.
Vanguard Digital Advisor, the platform's robo-advisor, is one of the best robo-advisors for retirement savings accounts. The automated version offers a suite of useful tools, educational resources, and tax-loss harvesting features. It also offers socially responsible investing options.
However, one drawback is that Vanguard doesn't offer separate platforms for more advanced traders. Plus, you'll have to pay $1 for options contracts (most competitor brokerages only charge $0.65 per options contract).
Is Vanguard Right for You?
Vanguard's investing platform suits all kinds of traders, especially retirement-focused individuals, socially conscious investors, and those seeking robo-advice. Experienced investors wanting access to fiduciary advice for account guidance and management should consider a Vanguard Personal Advisor Services account. Keep in mind that there's a high $50,000 minimum deposit requirement.
Vanguard doesn't offer cryptocurrency trading or NFTs.
Vanguard: Overall Rating
| Feature | Insider rating (out of 5) |
| Fees | 4.50 |
| Investment selection | 5.00 |
| Access | 4.12 |
| Ethics | 4.50 |
| Customer service | 4.25 |
| Overall score | 4.49 |
Vanguard Pros and Cons
| Pros | Cons |
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Vanguard: Is it Trustworthy?
The Better Business Bureau has given Vanguard an F rating. BBB ratings typically range from A+ to F and reflect the bureau's opinions of a company's customer complaint history, business practices, and advertising and licensing information. The BBB states the reason for the low rating is multiple complaints filed against Vanguard and several unresolved complaints.
In 2023, a lawsuit was filed against Vanguard for supposedly mishandling target-date funds and breaching fiduciary duty. Vanguard denies these allegations and is currently under investigation. In November 2023, Vanguard attempted to get the lawsuit tossed out by a federal judge. Although some of the plaintiff's arguments against Vanguard were dismissed, the allegation of possible fiduciary breach will go to trial.
On June 1, 2023, the Financial Industry Authority (FINRA) fined and censured Vanguard for multiple errors found in 8.5 million customer statements. Vanguard paid a $800,000 fine and has since corrected the errors.
June 10, 2023, a whistleblower lawsuit originally filed back in 2013 began mediation. It alleges that the former Vanguard employee was wrongfully terminated after discovering billions of dollars worth of fraudulent tax behavior by Vanguard. David Danon, the employer, was fired less than a month after filing with the SEC. This case is still currently under investigation.
In 2022, Vanguard agreed to a $6.25 million settlement with Massachusetts Secretary of State William Galvin for allegedly failing to warn investors of large tax bills after investing in target-date funds.
Ways to Invest with Vanguard
Self-Directed Brokerage Accounts
Vanguard self-directed brokerage accounts are best for active traders who want control over the investments they buy and sell. Available as individual or joint brokerage accounts, this option gives you various investment choices, including stocks, ETFs, options, bonds, mutual funds, and CDs.
Stocks and ETFs are commission-free, but be prepared to pay an additional $1 per options contract (this is higher than brokerages like Charles Schwab and Merrill Edge, which charge $0.65 per contract).
Vanguard offers thousands of mutual funds as investor or admiral shares. Vanguard introduced Admiral shares as a means to make certain investments more affordable for everyone. Here's how it compares to regular investor shares.
| Investor Shares | Admiral Shares |
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Vanguard mutual funds include index, actively managed, target retirement, and ESG funds.
Educational resources for Vanguard investors help users make online trades and manage portfolios. Vanguard also has a "News & Perspectives" hub that keeps you informed on the latest investing trends.
Automated and Advisor-Managed Accounts
Not interested in picking investments on your own? Vanguard offers some options for hands-off investors who prefer automated or advisor-managed accounts. These include the following:
- Vanguard Digital Advisor: This is Vanguard's automated investing account. It creates a personalized portfolio for you that's composed of Vanguard ETFs. The account has a $3,000 minimum and 0.20% advisory fee.
- Vanguard Personal Advisor Services: This account merges automated management with one-on-one financial advisor support. Though it has higher fees (a $50,000 account minimum and 0.30% balances under $5 million; those with larger balances pay less annual fee), you get to take advantage of professional advice from a Vanguard fiduciary advisor.
Retirement Savings Accounts
Vanguard is also a great resource for those interested in using retirement accounts to build wealth. The brokerage offers several options, including:
- Traditional IRAs
- SEP IRAs
- Roth IRAs
- IRA rollovers
- Individual 401(k)s
- SIMPLE IRAs
These retirement accounts give you countless ETFs and Vanguard's All-in-One retirement funds. All Vanguard target retirement funds have at least a $1,000 minimum.
Most retirement savings account options are available through Vanguard's robo-advisor or managed account.
Business Insider's guide to the best retirement plans>>
Education Savings Plans
Low-cost investing with Vanguard Brokerage offers multiple options for investing for a child or dependent. These include its 529 education savings plans, UGMA/UTMA custodial accounts, and trust administration and investment management services.
Vanguard is one of the best 529 plan brokerages, offering its users access to a DIY portfolio or hands-off options. Its individual 529 portfolios (the DIY option) — which let you create your own investment strategy — give you access to several mutual funds and ETFs. These include all-in-one retirement funds, total market ETFs, and environmental, social, and corporate governance (ESG) funds.
Active investors might enjoy its Target Enrollment portfolios that diversify your money across stocks, bonds, and cash investments. Invest toward a maximum of five education goals in the same account. Vanguard handles all of the legwork for you, and you'll just have to select a portfolio based on which year you expect your dependent to start school.
Investment Options
Investment options available through Vanguard Brokerage include mutual funds, index funds, and ETFs. Vanguard is the way to go if you're looking to invest in a target retirement fund through an IRA or 401(k). You may get access to options trading through a self-directed account only with special permission.
The online brokerage trades stocks, bonds, money market funds, and CDs. It does not offer cryptocurrencies, futures, or direct commodities, largely due to the risk and volatility of these assets.
Vanguard Fees
A self-directed Vanguard brokerage account has a $0 minimum requirement with a 0% fee. Vanguard Digital Advisor requires a $3,000 minimum and charges a 0.20% fee. For Vanguard Personal Advisor Services, you'll need to meet a $50,000 minimum, plus a 0.30% advisory fee for accounts under $5 million.
You'll pay between $1,000 and $50,000 for mutual funds. (You may need more depending on the fund.) Vanguard ETFs cost $1, while non-Vanguard ETFs vary by share price.
Vanguard Brokerage Account — Frequently Asked Questions (FAQs)
What is a Vanguard Brokerage Account, and what does it offer?
A Vanguard brokerage account includes self-directed, automated, and advisor-managed accounts to trade stocks, bonds, and thousands of low-cost mutual funds and ETFs. As one of the largest investment management companies, investors can access Vanguard's suite of educational features and trading tools for simple portfolio diversification and cost-effective management.
How does Vanguard stand out from other brokerage firms?
The online brokerage distinguishes itself from other top brokerage firms with Vanguard's unique client-owned structure benefits, expert-crafted target date retirement funds, and advisor services. Known for its extensive selection of low-cost index funds and ETFs, Vanguard is a great brokerage for all kinds of investors looking to minimize costs and maximize returns.
What are the fees associated with a Vanguard Brokerage Account?
Vanguard is generally a low-cost brokerage affordable for all kinds of investors, especially since users can purchase low-cost Admiral Shares for more costly index and mutual funds. Vanguard doesn't require a minimum deposit to open a standard brokerage account. Moreover, users can trade Vanguard's commission-free ETFs and stocks. That said, some Vanguard account options require a higher minimum deposit, like Vanguard Personal Advisor Services, which has a $500,000 minimum.
Is Vanguard Brokerage Account suitable for beginner investors?
Yes. Vanguard's simple interface, copious educational guides and market research resources, and automated investing accounts make it a suitable choice for those just getting into wealth-building. Beginners can still trade on their own, but you can alternatively use Vanguard Digital Advisor or Vanguard Personal Advisor Services if you'd rather leave the investment decisions to the professionals.
Can advanced investors find value in a Vanguard Brokerage Account?
Yes. Vanguard brokerage accounts are a great option for all kinds of investors, including advanced investors. Experienced traders can find value in Vanguard's cost-effective investment strategies, retirement fund options, a wide range of index and mutual funds, and customizable dashboard features. However, advanced traders don't have a separate Vanguard trading platform.
Vanguard
Start investing
Compare investing options
Insider’s Rating
4.49/5
Perks
You can trade stocks without commissions here, and Vanguard offers margin accounts and commission-free options trading for more advanced investors.
Account Minimum
$0 ($3,000 for Vanguard Digital Advisor; $50,000 for Vanguard Personal Advisor Services)
Fees
0% (0.20% to 0.30% for professionally managed portfolios)
Pros
- Commission-free stocks, ETFs, and options
- Brokerage, automated, and advisor-managed accounts available
- Thousands of low-cost mutual funds
- Multiple resources with expert analysis and market insights
- Several retirement accounts and services for retirement plan participants
Cons
- Higher options contract fee than other discount brokerages (Vanguard charges $1 per options contract)
- No separate trading platforms for advanced traders; no fractional shares
- No cryptocurrencies
Insider’s Take
Vanguard is a reasonable low-cost option for all types of investors. Whether you're an active trader, passive investor, or retirement-focused individual, you should be able to find what you're looking for.
Product Details
- Promotion: None at this time.
- App store rating: 4.7 iOS/ 1.8 Android
- Consider it if: You're a long-term focused investor looking for access to a variety of account types and investment choices.
- Awards: Morningstar gave Vanguard a 'High' assessment in its 2022 Robo-advisor Landscape report, listing it as the #1 platform out of 16 robo-advisors
How Vanguard Compares
Vanguard vs. SoFi
SoFi is another popular online brokerage offering both self-directed brokerage accounts and a robo-advisor option.
Vanguard and SoFi Invest provides various account options for different types of investors. The two investment platforms have self-directed brokerage accounts for active traders, automated accounts for passive investors, and IRAs for retirement-focused individuals.
But unlike Vanguard, SoFi doesn't offer any advisor-managed investing accounts like Vanguard Personal Advisor Services. However, SoFi provides complimentary access to certified financial planners (CFPs), so you can still take advantage of professional advice if you so desire.
SoFi Invest review
Vanguard vs. Fidelity
Fidelity is one of Vanguard's top competitors, offering top-notch investing, banking, and personal finance services. The low-cost brokerage account has a regular self-directed account, multiple IRAs, and a robo-advisor. While Vanguard and Fidelity are mostly neck and neck, Vanguard and Fidelity's fees differ in some areas.
For instance, when it comes to robo-advice, you'll pay less to start at Fidelity Investments. Fidelity's standard automated investing account, Fidelity Go, has a $0 minimum requirement, and it charges $0, $3/month, or 0.35%/year, depending on your account balance. Vanguard's equivalent account, Vanguard Digital Advisor, has a $3,000 minimum requirement. However, its constant 0.20% annual fee may appeal more to those with higher balances.
In addition, Fidelity Personalized Planning & Advice also has a lower minimum requirement ($25,000) than Vanguard Personal Advisor Services. But Vanguard charges a lower annual fee (0.30% balances under $5 million; those with larger balances pay less) for its account.
Vanguard vs. Fidelity comparison review
Methodology: How We Reviewed Vanguard Investing
We use Personal Finance Insider's rating methodology for investing platforms to compare and examine pricing for Vanguard's account options, investment availability, and overall customer experience when reviewing investment apps. Each platform receives a rating between 0 and 5.
Online brokerages offer varying assets, financial tools, fees, and other resources. Some brokers are better for more advanced investors or active investors, while others may better suit beginner investors and passive investors. Vanguard was evaluated with a focus on how it serves in each category.
Junior Investing Reporter
Tessa Campbell is a Junior Investing Reporter for Personal Finance Insider. She reports on investing-related topics like cryptocurrency, the stock market, and retirement savings accounts. She originally joined the PFI team as a Personal Finance Reviews Fellow in 2022.Her love of books, research, crochet, and coffee enriches her day-to-day life.
Jr Compliance Associate
Elias Shaya is a junior compliance associate on the Personal Finance Insider team based in New York City. Personal Finance Insider is Insider's personal finance section that incorporates affiliate and commerce partnerships into the news, insights, and advice about money that readers already know and love. The compliance team's mission is to provide readers with stories that are fact-checked and current, so they can make informed financial decisions. The team also works to minimize risk for partners by making sure language is clear, precise, and fully compliant with regulatory and partner marketing guidelines that align with the editorial team. Elias is the point person for the loans sub-vertical and works with the editorial team to ensure that all rates and information for personal and student loans are up to date and accurate. He joined Insider in February 2022 as a fellow on the compliance team. Elias has a Bachelor of Science in International Business from the CUNY College of Staten Island. Prior to joining Insider, he volunteered at the New York Presbyterian Hospital, where he worked with the biomedical engineering department. In his spare time, Elias enjoys exploring new restaurants, traveling to visit his family in Lebanon, and spending time with friends.
Senior Wealth-Building Reporter
Rickie Houston was a senior wealth-building reporter for Business Insider, tasked with covering brokerage products, investment apps, online advisor services, cryptocurrency exchanges, and other wealth-building financial products. Before Insider, Rickie worked as a personal finance writer at SmartAsset, focusing on retirement, investing, taxes, and banking topics. He's contributed to stories published in the Boston Globe, and his work has also been featured in Yahoo News. He graduated from Boston University, where he contributed as a staff writer and sports editor for Boston University News Service.
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