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Robinhood vs. Fidelity vs. Vanguard

SmartAsset: Robinhood vs. Fidelity vs. Vanguard
SmartAsset: Robinhood vs. Fidelity vs. Vanguard

With Fidelity and Vanguard, investors can access traditional, full-service investment platforms that allow you to individually manage your own account. Robinhood, by comparison, offers a very different experience geared towards mobile users. Here’s how they stack up.

If you prefer hands-on investing advice, a financial advisor could help you create a financial plan for your investment goals.

Overview: Robinhood vs. Fidelity vs. Vanguard

Fidelity and Vanguard both offer standard, full-service platforms that support most mainstream financial products. They are individual trading platforms, meaning that you trade your own assets and manage your own portfolio. Fidelity tends to distinguish itself through its advisor services. With a brand that has long centered around its retail financial advisories, this platform offers particularly strong educational and advisor resources.

Vanguard, on the other hand, has long been associated with the firm’s mutual funds. It continues to build its identity around these long-term assets, offering more no-fee funds than most competitors and charging low fees for funds not on that list.

Robinhood offers an entirely different product that is designed primarily for mobile and online trading users. Investors using the platform should be self-sufficient and tech savvy, since users will get limited information about financial products.

Fees: Robinhood vs. Fidelity vs. Vanguard

All three of these brokerages offer no-fee trading and require no minimum balances. This means that you don’t pay anything to sign up, don’t have to carry any amount of money in your account and can trade most of the platform’s assets for free.

For Fidelity and Vanguard, this means that you can trade stocks, ETFs and bonds free of charge. Both firms offer several thousand no-fee mutual funds, which are funds that you can trade also free of charge. While the exact numbers change periodically, Vanguard generally offers significantly more no-fee mutual funds than Fidelity and charges $20 for all others. Fidelity charges $49.95 to trade funds that aren’t on its no-fee list.

It costs $1 per option to trade options contracts on Vanguard and $0.65 with Fidelity.

Robinhood charges no fees to trade stocks or options contracts. These are the only assets available on Robinhood’s main service, although they advertise an affiliated service that allows some cryptocurrency trading.

Services and Features: Robinhood vs. Fidelity vs. Vanguard

SmartAsset: Robinhood vs. Fidelity vs. Vanguard
SmartAsset: Robinhood vs. Fidelity vs. Vanguard

Fidelity and Vanguard both offer broadly similar products when it comes to services and features. These are, as noted above, full-service trading platforms. This means that you manage your own account and can personally buy and sell most mainstream financial products.

Both of these platforms support stocks, ETFs, bonds, mutual funds and options contracts, and neither allows you to trade futures contracts or FOREX. Both also provide a full suite of technical indicators, ranging from basic information like pricing and volatility indicators to more complex data sets. This makes either platform generally a good choice for long-term investors and short-term traders. However, neither offer some of the more specialized features, like high-speed transactions, that active day traders prefer.

Vanguard distinguishes itself somewhat for wealthier and passive investors. It offers better prices on both mutual funds and options contracts to investors who have at least $1 million invested in their Vanguard account, and it has a better selection of mutual funds for investors to choose from. Most investors won’t find much advantage in a large selection of mutual funds, since the average investor will only pursue a small number of funds that meet their personal risk criteria anyway. However, sophisticated investors may prefer this kind of selection.

Fidelity distinguishes itself with its education and advising services. The brokerage offers an impressive array of educational materials for new investors, and that’s particularly useful when it comes to understanding complex products and the range of technical data you can access. Relatively new investors will find this useful.

Robinhood, on the other hand, is focused around its app experience and the company’s design philosophy is to allow people to trade stocks at great convenience. They have achieved this, building an app that lets you buy and sell stocks and options contracts with a swipe.

You should note, however, that Robinhood offers very few tools for understanding your investments. Their technical data is minimal, with little more than basic information about pricing and trading history. This makes Robinhood far more accessible than any other trading platform, but investors should be self-sufficient in researching investments and the risks that come with trading equities and options.

Online and Mobile: Robinhood vs. Fidelity vs. Vanguard

Fidelity and Vanguard are both clearly designed for their website experience.

This is common among full-service trading platforms. Making investments requires a lot of data, and sophisticated investors will want even more. This can simply require a lot of screen space.

In that regard, both services are solid choices for an investor. Both have well designed interfaces that allow you to access your portfolio at a glance, and which let you find both financial assets and technical information relatively easily. As with their services and features, Vanguard’s site is a little more complex than Fidelity’s and will generally serve more sophisticated investors better, while new investors will generally prefer Fidelity’s web experience.

Both have apps that are generally well regarded as companions to the platform’s full-service web experience. The Fidelity app has high ratings on the Apple App Store (4.8 rating) and Google Play (4.2 rating). The Vanguard app also has a high rating on the Apple App Store (4.7 rating) but only a 2.0 rating on Google Play.

However, with both platforms, the apps do not offer the complete range of data and technical indicators that you can get through the web platform, and they are best considered useful add-ons for checking your portfolio.

Robinhood has the opposite design philosophy, with a 4.2 rating on the Apple App Store and a 3.9 rating on Google Play. This trading platform has a sleek, minimalist approach that works extremely well for users to access their portfolios quickly, and find and trade assets with ease. The platform also has a website-based interface, but it sacrifices much of the app’s clean design.

Which Should You Use? Robinhood vs. Fidelity vs. Vanguard

Both Fidelity and Vanguard are good choices for individual investors who want to manage their own portfolios. If you have a relationship with either company, you would be well served by using their platform.

Otherwise, new investors may find a small advantage with Fidelity because of the company’s generally excellent educational materials and access to the network of Fidelity financial advisors. Sophisticated investors may prefer Vanguard, as they will be better able to take advantage of the small, but important, differences among the platform’s many mutual funds.

Investors who are tech savvy and self-sufficient to research opportunities and risks for their investments could benefit from the convenience of Robinhood.

Bottom Line

SmartAsset: Robinhood vs. Fidelity vs. Vanguard
SmartAsset: Robinhood vs. Fidelity vs. Vanguard

Vanguard and Fidelity are full-service platforms that allow you to trade most mainstream financial assets. While they are largely comparable in terms of price and features, Vanguard has a slight edge for more sophisticated investors and Fidelity may be more useful for newcomers who are still learning about the market. Robinhood, on the other hand, offers a sleek, minimalist experience that requires investors to be more knowledgable about investments.

Tips for Investing

  • A financial advisor can help you develop an investment strategy that works for you. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

  • It’s important to know where your investments will stand over time. SmartAsset’s free investment calculator can help you get an estimate to keep your goals on track.

Photo credit: ©iStock.com/PRASANNAPiX, ©iStock.com/AleksandarGeorgiev, ©iStock.com/SDI Productions

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