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Reader Doug wrote to me this week:
Any thoughts on using one of the ‘Big Three’ as a financial advisor. Fidelity, Schwab and Vanguard have different programs at different price points (shown below).
For some background…it’s vital to remember that these companies swim in various lanes at the same time.
They are custodians – places where you can open and keep accounts.
They are fund managers – organizations that offer ETFs, mutual funds, etc. that you can pay to invest in.
They also offer advisory services.
These organizations can be great custodians and excellent fund managers, yet have different standards for their advisory services.
I’ve got some thoughts for you, Doug.
There’s a Spectrum
I’m biased here. It’s important I disclose that. Though I’d like to think my bias is “pro-client.”
Here are some great questions to help you discern between good, bad, and ugly advisors. And definitions about how fees are charged.
I’d also recommend this podcast episode too:
The broader point is that:
- Some advisors provide detailed planning. Others don’t.
- Some advisors sell commissioned products (insurance, annuities, etc) and others are fee-only.
- Some advisors charge high fees, others low fees.
- Some advisors intentionally work with 40, 60, 80 clients. Other advisors work with 200+.
All else being equal, you’d probably prefer an advisor who provides detailed planning, is fee-only, spends plenty of time with you, and charges reasonable fees.
So – is that what the “Big Three” provide?
Service Tiers
We should be looking at the “dedicated advisor tier” in the table below.
The robo-only and hybrid tiers provide very little human expertise. They are essentially “investing-only” services. That’s fine – if that’s what you want.
But if you are looking for true financial planning, we want to look at the “Dedicated Advisor” tier.
Fees
Vanguard is the clear winner here at 0.30%.
Fidelity and Schwab charge fees much closer to what small, independent financial planners charge.
Fidelity’s fees start very high. Well above 1.0% on the first $1M in a client’s portfolio.
Schwab’s fees are more reasonable.
Client Service and Planning
Client service and in-depth planning are where the rubber meets the road.
I’ve had a ~dozen prospective clients (and a handful of actual clients) talk to me after working with one of these Big Three. I also regularly read online communities – both of individual investors (customers of the Big Three) and of other financial advisors (including many who work for the Big Three).
The commentary always sounds the same. Particularly for Fidelity and Schwab; there seems to be variation (to clients’ benefit) at Vanguard.
Advisors at the Big Three tend to be overworked. They have too many clients to serve each client well. Their client response times can be very slow, with weeks/months delays for common client requests.
Big Three advisors tend to be earlier in their careers and have less experience. Eventually, many of them look for opportunities to join an independent investment advisor.
The planning work from the Big Three tends to be boilerplate and basic. You (the client) input your information into financial planning software; they press some buttons on their end, press “go,” and send you the templated 20-page output document. You are mostly paying for someone to rebalance your portfolio rather than to create a financial plan.
This is a symptom of being overworked. If you have 200-300 clients, it’s impossible to spend more than a few hours per year with any one of them.
Fee-Only vs. Products
Unfortunately, both Fidelity advisory and Schwab advisory have a reputation for being sales organizations.
Many of the financial advisors at these firms are so-called “dual hat” advisors. In some interactions, they wear their “fiduciary” hat. But in other interactions, they are held to a much lesser standard, and thus:
They push high-fee, proprietary products.
Vanguard, to their credit, has a much better reputation on this front. They maintain their low-fee, index fund approach.
However, all three firms tend to offer only their own products to their clients. Fidelity clients are steered toward Fidelity funds, Vanguard toward Vanguard, etc. On one hand – what did you expect? Of course this is going to happen. But this is clearly a conflict of interest against the client.
Friends Don’t Let Friends…
If a close friend or a family member came to me with this question, I would point them toward any number of independent, fiduciary, fee-only advisors around the country.
And it doesn’t have to be me! 🙂
There are many advisors whom I admire for their combination of:
- High service
- Planning expertise
- Simple, low-cost investment management
- Fiduciary status
- Reasonable fees
In my experience, the “Big Three” firms’ advisory services miss the mark on too many of the five bullets above. Fidelity and Schwab especially. Vanguard less so.
Nevertheless, I know too much to recommend people to the Big Three’s advisory services.
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Jesse, thank you for the informative response. It will help others.
I have been pleased with Vanguard Personal Advisor Select. It’s true they advocate low cost Vanguard funds, but that’s where I invest anyway (Boglehead). Their 0.3% fee is also attractive although it gets expensive as the amount being managed grows. That’s an incentive to go with a flat-fee advisor (which I am considering).
They also provide a useful ‘dashboard’ where I can track performance, do what-if analysis and other things.
The advisor select for up to 5M is very professional at Vanguard. Over 5M they offer estate planning, charitable giving, legacy type stuff. I have had 3 advisors and were all very good and professional for what their parameters are. You are essentially paying to quarterly rebalance. They also adhere to 60/40 even if you try to go with fewer bond funds, even if you try to make the case for more equities because you are not touching this for 10-15 years.
So is it worth .3 for a quarterly rebalance? It put a drag on my growth so I stopped and re balanced to cash and spent the 15K on a yearly vacation. I recommend you start with them, have them set up your plan, and then have them release you. Tell them up front; they say you can opt out any time. Once you form a relationship it is hard to let them go because they are really good, likeable, knowledgeable guys. My 2 cents.
I’m also pleased with Vanguard Personal Advisor Select. Low cost funds and ETFs and good personalized advice from dedicated smart CFP advisors — including which accounts to draw from to pay for my daughter’s college and ways to mitigate the long term care threat without paying for expensive long term policies. I agree that the advisors tend to be earlier in their careers and could or do move on, but I’m fine with this as long as the VG philosophy and advice stays consistent. I’m still in the accumulation phase and the big test will be once decumulation starts.
Many thanks, DP! I appreciate you writing about your good experience w/ Vanguard
After reading this post, it’s apparent that you are CLEARLY BIASED in the response you offered to Doug’s question.
That’s to be expected if you believe strongly in what you do and how you do it.
If you’re a good fit for an individual who’s looking for help and you’re able to provide the services that person needs at a price he/she is willing to pay, then hiring you or another advisor who operates in a similar manner, charges comparable fees, and is also compatible with the client might make sense for him/her and thereby work out to be acceptable for that “new client” in addition to being “pro-Jesse” or “pro-Advisor.”
That’s several “ifs,” but it could certainly happen in some cases.
But it’s also quite possible, depending on the individual’s needs, knowledge level, and sensitivity to how much they want to pay in advisory fees for the help they need, that Vanguard might be an excellent choice for that person.
Unfortunately, you didn’t talk much about that option, so I hope you’ll allow me to discuss it in more detail.
Vanguard’s 0.30% fee is extremely reasonable and provides access to a Personal Financial Advisor at a 500K minimum asset level as shown in the Table that you posted.
Vanguard offers excellent Mutual Funds and ETF’s, and I believe you can purchase other provider’s ETF products on Vanguard’s Brokerage Platform.
Vanguard’s mutual fund and etf fees are quite low and they have a very large number and an extensive variety of high-quality investment offerings.
Moreover, the net yield on their various Money Market Funds are consistently higher than what most other MMF’s pay.
Although I have not worked directly with any of their Financial Advisors (because most of our family’s investments are custodied at Fidelity), I’ve heard several of their FA’s on Podcasts that Vanguard has produced, and for the most part I’ve found those FA’s to be knowledgeable, likeable, and professional.
IMO, anyone with $500K or more of investable assets who needs a Financial Advisor would be well served to look into Vanguard’s Personal Advisor Select and then compare that service to what other Financial Advisors offer and charge their clients.
Anyone with $50K of investable assets might want to consider their Personal Advisor Servive. PAS is a hybrid service that uses a “Robo Advisor” and a “Human Advisor” to provide advice and manage investments, also for a fee of 0.30%. PAS might meet the needs of some folks, but it’s definitely NOT as comprehensive a service as having a dedicated Personal Financial Advisor.
As someone who “doesn’t have a dog in this hunt,” the idea of seriously considering looking into what Vanguard offers seems like the prudent thing to do, especially given that minimizing the fees you pay to have your investments managed reduces your net investment returns.
Compounded over many years, a higher annual fee of 0.25% to 1.00% or more can DETRACT SIGNIFICANTLY from your total investment accumulation.
Hey Ritch, thanks for writing in.
If I’m understanding you, you’d argue I *did not* fairly represent Vanguard? I appreciate the time you took to share your opinions.
I did my best to paint Vanguard as *clearly* the best of the three.
What about Fidelity and Schwab? Can I assume I hit the mark pretty accurately with those two?
Cheers,
jesse
Thank you for your gracious reaction to my comment, Jesse. I’ll try to respond in kind to your comments and question.
Your post stated that Vanguard was “the best” of the “Big Three,” but you were clear in saying you wouldn’t suggest that anyone use their advisory services. “Nevertheless, I know too much to recommend people to the Big Three’s advisory services.”
Personally, I think that conclusion is “a bridge too far,” given Vanguard’s reputation and fee structure, which for a client with, let’s say, $2.5 million, is immensely less than what Fidelity, Schwab, or your firm (more on that later) would charge them.
I’m not going to assume you “hit the mark pretty accurately” with Fidelity or Schwab because I don’t have enough firsthand experience with either of those firms to make that determination. Frankly, I’m not sure you do either, but let’s not fret over whether you do or don’t.
My wife’s workplace retirement savings plan was moved to Fidelity about three years ago. Since then, I’ve consulted with two of Fidelity’s Investment Advisor Reps who assist current and former employees who are invested in that 403B Tax Deferred Savings Plan regarding two different planning issues.
Both advisors were knowledgeable and objective with their responses to my questions and in the specific advice they gave. If necessary, I would be happy to have their help in the future. I would also be comfortable referring someone to them if that was appropriate.
I didn’t mention those encounters in my prior comment because it’s a very small sample size, and it may not be relevant to this discussion.
I’m not personally familiar with many Schwab branded products (although my limited knowledge is that some of their ETF’s are excellent), but you and I both know that an investor or an advisor can build a extremely robust investment portfolio using only Vanguard or Fidelity funds and etf’s, so I can’t agree with your assertion that it’s “clearly a conflict of interest against the client” when they build a portfolio based on their proprietary investment products.
I must say I admire, but don’t completely concur with the chutzpah you demonstrate in denigrating Vanguard, Fidelity, and Schwab by saying: “Big Three advisors tend to be earlier in their careers and have less experience,” when you have been in the industry for less than 4 and 1/2 years. 😃
With all that having been said, I heartily agree with you that: “All else being equal, you’d probably prefer an advisor who provides detailed planning, is fee-only, spends plenty of time with you, and charges reasonable fees,” and that: “Client service and in-depth planning are where the rubber meets the road.”
In my mind, the gist of what you’re getting at in answering Doug’s question is:
1) Who do you go to for that level of advice and service?
2) What’s a “reasonable” fee to pay for it? (and)
3. What compensation method has the fewest conflicts of interest AND represents the best option and value based on what the client pays and gets?
For a client with $2,500,000 in investable assets, here are the ANNUAL RECURRING FEES as I computed them.
Vanguard: $7,500 = 0.30%/year
Fidelity: $24,250 = 0.97%/year
Schwab: $19,000 = 0.76%/year
“Jesse”*1: $19,250 = 0.77%/year
*1 From Rialto WM’s Form ADV Part 2A, Section 5, pages 6 & 7; Form ADV dated March 27, 2026.
“Jesse”*2: $15,750 = 0.63%/year
*2 From Blog Post link to FAQ “Working with Jesse as Your Financial Planner” (date of Blog Post unknown).
Footnote 1: Locating Rialto’s Fee Schedule wasn’t an easy task. It wasn’t clearly disclosed on their website, and there wasn’t a link on the website to quickly and easily take a prospective client to it that I could find.
Footnote 2: There IS a link on the website that brings up Rialto’s ADV Part 3, Form CRS Dated July 2022, which references their Form ADV Part 2A, but that shows fees which are DIFFERENT than the ones on their March 2026 Form ADV Part 2A filing.
Both of those fee schedules are DIFFERENT than the one that you linked to in your answer to Yolanda in this blog post, which I used above to calculate a lower fee for you. I have no idea why that Fee Schedule is out of sync with Rialto WM’s apparent most recent Form ADV Part 2A.
Personally, I find it concernbing, coercing, and frustrating to have to CALL a Financial Planning firm to request the regulatory document that tells me what the business does AND how much it might cost me to hire them. It would be nice if Rialto decided to enhance their professional credibility by posting their fee schedule(s) on the website in an easily findable and accessible way.
Final comments:
1. IMO, an AUM Fee Schedule is a GREAT DEAL for the advisor, but a LOUSY PROPOSITION for the client in most cases, and it is RIDDLED WITH POTENTIAL CONFLICTS OF INTEREST much more concerning than the use of Vanguard or Fidelity proprietary mutual funds and etf’s.
2. IMO, a Flat Fee Schedule is the BEST compensation arrangement with the fewest potential conflicts of interest in general, AND if the final Flat Fee that’s negotiated truly is fair and reasonable based on the services received and provided, it’s the OPTIMAL WAY to engage and pay a Financial Advisor for detailed planning on an ongoing basis.
I wouldn’t be at all surprised if that’s where you eventually end up in your quest to best serve your clients and support yourself and your family. IMO, you could do a BETTER JOB of serving your clients (which clearly is important to you) than you do now while also still making a good living doing it. 🤗
Cordially,
Ritch
Hi Ritch –
I pour hours and hours and hours of my life into creating free content for thousands and thousands of people. It’s a real passion of mine and I love doing it. I’m pretty pleased with it. I hope you’ve gotten some value out of my work over the years.
The one and only thing I sell – that I’m very transparent about – is my advisory services. I don’t run ads for mattresses or protein powder. I don’t ask my audience for a $20/month subscription. I get offers every week for sponsored content, running ads, selling space in my newsletter, etc. I turn 100% of them down. I sell my advisory service. That’s it.
I am fine with someone – anyone – disagreeing with me on what I discuss. I hope that comes across in my writing and podcast episodes. With many people in my audience, it’s gonna happen. I err, and plenty of smart people like you correct me. It’s a great mechanism that makes me better for it.
And I accept that this blog post – about Schwab, Fidelity, and Vanguard – is me taking a strong stand in a way that many DIYers disagree with. Especially about Vanguard. Though I think if you peruse Bogleheads forum, Reddit, ChooseFI, White Coat Investor, etc, you’ll find reviews of Vanguard PAS that support mine. But we can agree to disagree.
Your latest comment made me think of Teddy Roosevelt’s “man in the arena” speech. You even went so far as to tell me how I could do a better job of serving my clients and supporting my family. You mention chutzpah. Telling a person how to better support his family – that is chutzpah. I work pretty hard to support my family, and I feel pretty good that I do right by my clients and my audience in the process.
Onto some more objective stuff…
Most independent firms are happy to offer custom and/or negotiated fees to their clients. The Form ADV sets a maximum fee that an advisor can charge, but firms are free to offer lower fees, if they choose.
You might not know that I do offer flat-fee services to my clients. Or if they prefer, I offer AUM fee arrangements to them at 20-50 bps.
Of course, the hard part is striking a balance between:
1) ensuring clients pay a fee that is fair for the value we give them, and
2) ensuring we don’t have high-fee / low-work clients subsidizing low-fee / high-work clients, and
3) not having 1000 unique fee arrangements for 1000 unique clients
In my opinion, if I was forced to set one fee forever, it would be something like:
$5000 flat + 25 bps AUM. That’s just me.
But some clients want 100% flat. I am happy to offer that.
Other clients prefer low AUM %. I am happy to offer that.
As long as I get paid a reasonable fee, and I can deliver value in excess of that fee, I am happy to work with good people who need my help and value my help.
All the best,
Jesse
Ritch congrats and chill out.
This is helpful. While we are not with these big three, we’ve been working with another established wealth management firm. We pay an annual flat fee (rather low) for someone who is very responsive. We are happy with how our portfolio has been growing, and they often recommend alternatives to their products.
However, I feel like we’ve outgrown our financial advisor now that we are moving past wealth accumulation. My questions seem beyond their capabilities and they lack knowledge on tax planning.
What would a fee-only advisor charge and what services would they provide? I presume there are a variety of “packages” as well as paying for hourly consultations. I also understand your services are within a range of what can be found. Do you have a blog that outlines expectations?
Hi Yolanda,
Candidly, I find my work to be much more applicable and valuable toward the end of working careers / beginning of retirement. There are simply more opportunities for big mistakes – and therefore good advice.
During accumulation, an advisor is less valuable, as the best advice is often, “Save a good amount, use the right accounts, invest in low-cost + mostly stock funds, and repeat for a couple decades.”
A quick FAQ for my work is here: https://bestinterest.blog/faq/
I also use Vanguard’s Personal Advisor Select. My Vanguard rep is both very responsive and helpful. I recognize I don’t have a full financial plan that includes estate planning, insurance, etc. But for me the .3% fee is worth the advice and service I get. I am retired so in the decumulation phase.
I am also in the decumulation phase, I think I’ve done OK Accumulating (Boglehead) but have questions about the best way to avoid taxes for me and my heirs. Is it worth using Vanguard PAS or just use an independent tax advisor Thanks to all on the blog
Recently retired and have been with Fidelity for ages. I met with a financial advisor at Fidelity who did not even look at my Investment Policy Statement (created after much Boglehead research). Instead he showed me a portfolio for someone in my similar situation–dozens of funds, private equity, etc., all at 1.5% to 2% annually. No thanks, I will not visit with him again. I’ve told his associate underling to stop calling me for appointments.
I had a meaningful planning session(s) with a Boldin fee-based advisor to see if I was on the right track. He validated much of my plan and gave me a few insights that were helpful.
Would be nice to know what software each of the Big 3 use, if any for financial projections, and how are they different from buy your own like Boldin or Pralana. I am DIY but need a plan for when my lear jet hits the mountain and my wife has to deal with financial planning alone. I like the idea of one time plan fee and revisit the agent every two yrs or so. The reluctance of firms to offer this is their exit strategy. Their “retirement” plan is to grow their AUM business and SELL it to a large firm like LPL or Raymond James and fly off into the sunset with their millions. Telling my wife to call Vanguard for .03 would not be the worst I guess, the worst would be to call Ameriprise.. they gouge you in so many ways.
If you do your own financial planning, keep >80% equities, and can live through a -40% market – “Live by the $word, die by the $word.”
I’m 66, retired almost exactly one year ago, and signed up for Vanguard PAS a few months before retirement. My main objectives in selecting an advisor was to get a different set of eyes on my own retirement calculations and plans, and to create a relationship to help with financial matters should, God forbid, something happen to me and my wife is left by herself.
Our advisor, who has 25 years of experience as a CFP (15 at Vanguard) spent a good amount of time getting to know us, not just our finances, but what we wanted retirement to look like, what we liked to do, both as a couple and individually, and what our plans were for our kids. The plan we received after all these conversations pretty closely tracked what I was going to do anyway, but that actually made me feel better both about my own calculations and his advice. He did make some good suggestions about tax planning and in particular navigating Medicare and avoiding IRMAA penalties that I hadn’t thought of. We typically meet quarterly for a portfolio review and to answer any questions we have, but he’s available by phone or email anytime, and he’s always fast to respond – typically same day. Yes, he recommended all Vanguard funds and ETFs for my portfolio – but that’s where 90 percent of my stuff was anyway, and he did not push me to move my non-Vanguard assets into Vanguard at all. All in all, although I’m only a year in to retirement, I’m happy with the value and peace of mind I receive for the relatively low fee.
I am 10 years older than you but my experience with Vanguard’s PAS is similar.
I have been a PAS client since 2013. MY ORIGINAL CFP medically separated from Vanguard in 2021 and I was assigned a new CFP. Both of them were earlier career advisors, but since I was a CFP, and later a CFP Emeritus myself, their primary purpose was to act as a second set of eyes and a sounding board.
Vanguard does not provide tax advice per se, but they do incorporate tax considerations in their planning.
All in all, I am very pleased with my Vanguard advisor and would encourage anyone needing or even simply wanting an advisor’s perspective to engage Vanguard’s PAS program.
I’ve been with Fidelity for several years and am very happy with the service. If rarely wait an hour for a call or email when reaching out with a question or concern. My dedicated advisor has been at Fidelity for 20 years, in a local office only 20 minutes from my home. Prior to moving to Fidelity I was with Vanguard in the Personal Advisor Select group for many years. The last group I dealt with was two time zones from my home. In the last five years at Vanguard I had six different “advisors”. Replies were not prompt and it took an “act of congress” to make simple changes.
I have accounts with all three, but for different reasons. For our retirement and general savings, we use Vanguard and their Personal Advisor Services, alongside Abundo, an independent, fee-only advisor who helps us with broader financial planning.
I see Vanguard’s role as much more than just rebalancing, although they do that very well. As just one example, they’ve been very helpful with doing things in a tax-efficient way, including how they fund our spending account and Roth conversion strategies. I’ve found our advisor to be very responsive and willing to dig into the specifics when needed.
We use Fidelity mainly because they are the only one of the three that offers an HSA. We use Charles Schwab because they’re the only one of the three that offers international banking, and I also like their DAF.