Vanguard Brokerage Account Review 2024 (2024)

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

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
Commission-free trading of stocks and ETFs Large selection of mutual funds Low expense ratio Huge selection of retirement tools Tax-loss harvesting features Multiple account options (robo-advisor, advisor-managed, and DIY)	High mutual fund minimum Higher options trading fees Doesn't offer a separate trading platform for advanced trading No cryptocurrencies

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
$1,000 for Target Retirement Funds and STAR Fund Average of $3,000 for most actively managed Vanguard funds Average expense ratio of 0.28%	$3,000 for most index funds $50,000 for most actively managed funds $100,000 for some sector-specific index funds Average expense ratio of 0.14%

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.

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.

Tessa Campbell

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.