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When I started taking QCDs and RMDs, several years ago, I called Vanguard each time. Then, last year, I was able to do the whole thing on the website. Naturally, I expected to be able to do it on the web site again this year.
I started with the QCDs. I found the description of what I was supposed to do after a search on the website. I found the correct location. The options presented bore no relationship to the instructions, nor to what I wanted to do. I gave up and called Vanguard. I felt sorry for the unfortunate employee who had to read a lengthy spiel four times, once per check. He offered to explain the process to me, but since it would no doubt change again next year, and in any case I would forget, I declined.
Surely the RMD should be simpler, I thought. I found the right web page easily enough, only to discover that it would let me send the distribution to my bank account, but not to my Vanguard brokerage account. Just how does that make sense? I would just have to send the money back again. A further phone call got the money directed to the right place, but also informed me that I could only have tax withheld from money going to my settlement fund, and not to a mutual fund.
I started the RMD transfer before close of business on Friday. The transaction officially completed yesterday (Monday), although I didn’t see the result until this morning. I can conceive of no earthly reason why it should not have completed on Friday. I have been a Vanguard customer for decades but am hereby soliciting recommendations for an alternative, bearing in mind that my portfolio is almost entirely invested in Vanguard mutual funds.
I have both Fidelity and Vanguard accounts. I’ve had issues with each one on occasion, and each one does a couple of things better than the other or has a couple of system idiosyncrasies that work better or worse than the other. On balance, I’m satisfied with each of them. I have noticed recently that Vanguard seems to have lost a bit of its customer intimacy and has kept trying to get me to give it more of my portfolio or to use some services that I believe would be far more profitable for it. Fidelity is fine for things with a clearly-defined path or structure, but has failed me on a couple of one-offs related to my kids’ trusts, mainly through human errors. But I still value both relationships, and each helps me keep the other one honest and helps me choose the better of the two options for certain things.
I’m a fan of Jack Bogle, read several of his books and used to invest in Vanguard funds. When Vanguard stopped mailing quarterly paper reports, I pulled my money out.
Both my retirement and taxable investments were with Vanguard for years. Three or four years ago I tried opening up a trust account for my wife, but over a week after submitting the paperwork they still couldn’t tell me when it would be opened. That afternoon I contacted Schwab and the account was open the next morning. Vanguard would not withhold state taxes from the RMD of an inherited IRA, only when required by law. The shares Vanguard sold to generate cash for my RMD one year generated 20 or 30 cents more than the RMD. The reason I left Vanguard and switched to Schwab and Fidelity was Vanguard’s sending me the amount of the RMD and keeping the extra pennies. I called and was told it was just a rounding error, they wouldn’t pay me my money or even deposit it into my account as cash. John Bogle is turning over in his grave.
Here is my 2 cents. I have been with Vanguard since 1989, and Fidelity since 1987. I just do not believe in putting all my eggs in one basket. I find Vanguard helps with lowest fees, makes a difference after 40 years or so. I have no issues with RMD’s or QCD’s both done on the website, year after year. You get to elect what taxes you want to pay, Fed and State. In the beginning I had a few questions, and all answered quickly and easily. Any company can have an issue here and there, Vanguard did back in 2021, but it was resolved fairly and quickly. I do hear Schwab is another good alternative. I have no plans to change either one. I bank with Chase.
I have personally used Fidelity for years and am very happy with both their online systems and their service. If all else fails, I also have a local Fidelity office that I can walk into for help. Other family members use Schwab and have voiced similar satisfaction.
Using a service like Fidelity, I also have access to Vanguard funds, which I have used for years in my accounts, for both performance and cost reasons. Going this route, rather than trying to do everything through Vanguard might make things much easier.
Seems like a lot of love for Fidelity and Schwab, and not much for Vanguard. Good product, poor service. I think I will take a closer look at Schwab. I am particularly interested in an account I can access from an ATM without foreign conversion fees.
Fidelity also offers worldwide ATM fee reimbursement and no foreign transaction fees. I use both, and they work the same.
They have that and I have such an account.
In answer to your specific question, I currently have accounts at Schwab, Fidelity, Chase, Vanguard, Merrill Lynch/BoA, and two local credit unions. I have listed them here in order of ease of use/quality of service as I experience them.
Schwab and Fidelity are very competitive, but have slightly different strengths. I think people less familiar with financial services might find Fidelity’s hand holding better while others might find Schwab’s procedures more efficient and requiring less patience to navigate. I have observed a lot of changes in the last decade in both regards–better hand holding and more efficient procedures at both these top providers as well as across the industry.
Unsurprisingly, Chase is the best at providing banking services in my experience. Bank of America is also good at that, but Chase if much more available in some parts of the US including here in Colorado, where BoA has just begun to show up.
Earlier this week a credit union branch manager told me they were hoping the merger of their large regional CU with another large regional CU would lead to their being able to provide better services like I was used to at the ones listed earlier in the list.
They are all working hard to come up with ways to provide more services, so sales resistance is also a must, and the ones higher on this list are often the best at that as well.
I have accounts at Schwab, Fidelity, and Wealthfront. I was mildly surprised when Schwab offered to have a CFP sit down with me (virtually) to analyze our finances and investments. Very positive interaction, and didn’t lead to recommendations to buy anything or feel overtly commercial. The trigger may have been when I set up – but never used – a line of credit backed by my brokerage account. Valuable customer service.
Thanks. Interested in the meeting with the CFP. I feel it’s time to have someone run the numbers for me again.
We were happy Vanguard customers for decades, then things began to change: long waits to talk to someone, clunky website that never seemed to improve, finally the notice that our old legacy mutual funds were being converted, there might be fees if you wanted to speak to a real person, it got my dander up, since Vanguard is supposed to be owned by its members. So I researched and came up with good results for Fidelity. Contacted them, asked questions, and they easily and kindly led me through all the various steps to move our funds, 2 Roths and a trust account, over to Fidelity. Vanguard threatened to charge us for each account, Fidelity said probably not, but if there are any fees, we will reimburse you. What a transformation! Fidelity website is so user-friendly, and when I need to speak to someone, it is not a long wait to do so, and they are so helpful and friendly. And maybe it is just timing with the stock market, but we have made much more money at Fidelity than we were used to getting at Vanguard. We have been with them since July 2024 and couldn’t be happier. Shame on Vanguard for losing their way!
it’s difficult to understand why they are so bad. I guess it comes down to investing in technology and more people.
I’ve used Fidelity, Schwab and Vanguard. I manage my own money, and I moved everything to Vanguard years ago because I like their products. I own 2 Schwab ETFs, which I transferred to VG, and have some stocks and VG ETFs. I’ve done RMDs and QCDs at VG with no problem. We kept our brokerage account at Fidelity and keep money in their core MM to pay our bills. My wife handles that and uses Billpay with no problems. I oversee the investments at VG. I think if you are a do it yourselfer VG is just as good as the others. They also offer advisors, who I don’t use. I can buy anything at VG with no trading fees. When I’ve taken my RMDs they put the money in my taxable brokerage account with no problems. If you want to interact with customer service or a rep frequently and are not a do it yourselfer, maybe Fidelity or Schwab is better, although Schwab does offer advisors services. I used to work as a financial rep at a Fidelity Investor Center, and we were mostly sales people with the requisite licenses. We were were not investment experts. I know Fidelity offers advisor services, but if you are dealing with a rep who simply goes over your portfolio and. gives you advice or suggestions, that person is not an investment advisor.
I have not been hearing too many glowing comments about “Jacks” once great company. We left them for Fidelity to keep all of our investments in one place, as we had an inherited IRA and my 401K there *that is another question for security debates. Anyway, we couldn’t be happier. Customer service is excellent. I don’t think there are many investment options that you can’t have there. Their website is much better than Vanguard’s. For example, we still have the UTMAs at Vanguard only because that is a complicated transfer.
What are your experiences with fees (Fidelity vs Vanguard)? I took on the management of our finances in recent years as my spouse was no longer able. I moved IRAs & Roths from Wells Fargo to Vanguard for a significant drop from high WF fees and because the Vanguard advisor would serve as a fiduciary.
At the time, research suggested that Fidelity fees were somewhere in the middle between the two.
A neighbor likes meeting with her Fidelity advisor about a 90 minute drive away. We meet with the Vanguard guy online a few times a year (although we are on our 3rd Vanguard advisor in a few years).
Because my husband and I are paranoid, we each keep our assets with multiple firms.
Husband: T Rowe Price (because his father used them), Fidelity and Vanguard.
Me: Vanguard, Fidelity and Schwab.
My ranking worst to best: T Rowe Price (by a mile, due to errors on a Roth conversion they had to be forced to fix, bad advice, bad service), Vanguard (Security not as good as the others, often poor service), Schwab – very good. Fidelity best. Great Service, easy to use website, helped tremendously when there was a possible security breach on my computer. I recommend both Fidelity and Schwab.
I need to talk to my husband about firing TRP.
Best of luck to you.
Sorry to hear of your difficulty with Vanguard.
I’ve had Vanguard accounts, my wife and my own, including RMDs for decades. At 80 yrs old im finding negotiating the Vanguard site easier and more efficient than ever. Large fonts, Yipee!
Sometimes when things just aren’t falling in place, take a break and reboot. Retirement affords us that pleasure.
I have never had any issues with QCDs, but the website instructions could definitely be clearer.
What irritated me was the recent decision made by VG to eliminate the ability to write QCDs from a checkbook on your URA account. Now you have to go back to requesting the check, having it mailed to you, and you remailing it to your charity.
no real reason given, just the announcement. Not something I can’t live with but it made zero sense to me.
I use and recommend Fidelity. You can send the money wherever you want, and have whatever tax you like withheld.
Today I got an email from Vanguard about my mother’s RMD, saying:
Our records show that your 2025 required minimum distribution (RMD) plan won’t meet your annual RMD obligation. To avoid a shortfall and potential IRS penalties, use the following link to review your plan and ensure your full RMD is taken by December 31.
I checked on the website and everything looks fine for the RMD, scheduled for 12/10, including the transfer to her taxable account.
Sounds like a phishing scam. I hope no one clicked that link.
Interesting thought. It was a legit Vanguard email though. I happened not to click the link since I keep a Vanguard page open in my browser.
Even though an email from a business looks legitimate I ALWAYS log onto their website out of fear of scams.
Glad to hear it was legit.
I will be taking my first RMD next year.
May be you commented already, but did your transaction of RMD to your taxable brokerage account at Vanguard go through and could you comment as to tax withholding by Vanguard from your settlement funds? I take it you did not do in kind transfer for your mutual fund.
Vanguard will withhold tax from funds going to your settlement fund in taxable. I imagine it will also withhold from funds going to a bank account. It would not withhold from funds going to a mutual fund in taxable.
Thanks for your comments!
Looked at your travel blog. Wow! It took me a while to scroll to the bottom of the blog without even reading. You been traveling!
I was at RDU last week. My daughter lives in Raleigh. I like travel too. The foliage was good in Asheville, but much much better in the Smokies and Gatlinburg.
Thanks. It’s been a while since I went anywhere, but I’m in the middle of renewing passports. Love the mountains!
This is good news, Kathy! 😊
That’s great that you’re traveling Kathy! I was mistakenly under the impression you had to stop traveling years ago due to your RA flare up.
Thanks, David! You were right. However, it went back into remission a couple of years ago. I am very comfortable and busy in my CCRC, but I at least need to visit family in the UK, and once I get on a plane…
I have been doing QCDs online at Vanguard for the past three years. I just did two yesterday. I’ve never encountered any issues.
Thanks. I will keep the interest rate in mind. (That was meant to be a reply to Harold. I’m recovering from yesterday’s Covid shot and am not at my best.)
I’ve been a Fidelity customer for over 30 years. I’ve used Vanguard funds and other providers in my Fidelity accounts. Fidelity charged me when I purchased Vanguard or Dimensional mutual funds. This was before ETF’s became available. That is a non-issue today as the ETF’s have lower fees and more flexibility. I have brokerage, IRA’s, HSA’s, and Donor Advised Fund. Their cash management is superior with easy bill payment, ATM and check writing. They also pay money market rates (~4%) on funds. Schwab does not pay at that level. They are paying 0.45%. I do not believe Fidelity allows check writing for QCD’s. I am not of that age, yet.
to be clear, Schwab pays very low interest on its settlement fund, but they pay normal money market rates on their money market funds. The catch is that you have use the settlement fund to buy shares of the money market fund to get that market rate, which means those shares have to be sold in order to use them to buy something else like an ETF or to transfer them out of Schwab. Thus an extra step with a one-day delay, which is an extra hassle I dislike. At Vanguard you can transfer money to your bank directly from a money market fund in one step, and Vanguard pays money market interest on its settlement fund so there’s no significant downside to keeping money there anyway. Schwab makes money on its settlement fund.
I no longer use Vanguard, but before I switched to Schwab I got irritated with their website. Rebalancing accounts to restore my preferred asset allocation using their website was unnecessarily painful.
I feel your pain. I have been there.
Due to frustrations with Vanguard’s website and call center, I switched to Fidelity several years ago. Their website is much better than what I experienced with Vanguard, and their call center is great. They are very patient and guide me through whatever I am trying to do.
I still own several Vanguard etfs and they transferred seamlessly (not sure about Vanguard mutual funds as I did not own any).
I have my own rep and meet with her in person at least once a year. She has never pushed Fidelity products which I appreciate.
BTW, the QCD process on Fidelity’s website is straightforward and I have never had problems with it.
Vanguard has great funds and etfs, but their customer service is mediocre at best.
Another vote for Schwab. I’ve been a customer there for 33 years. Never been anything less than delighted with their customer service. Can’t comment on QCD’s and RMD’s because I’ve never done them.
One more thing: Schwab, like several other brokerages, will usually offer a cash bonus in exchange for transferring substantial assets to them. (You have to ask for it.)
The amount of the bonus depends on the amount transferred. The condition is that you have to leave the assets at Schwab for a certain time period, typically one year.
Also, the bonus is considered taxable income and will be included on your year end 1099 from Schwab.
I have done similar transfers from varies brokerages, like M-1, Schwab, etc that charged me $100 to transfer out into Fidelity where they promptly credit me the fees but the difference here is that they were not considered taxable income, just credit into my accounts.
There is a reason that Schwab just announced record customer account growth. With an IRA at Schwab you can get a checkbook to write your own QCDs. It is very convenient. All you have to do is do your QCDs before you do RMDs. I like Vanguard products, and most of our assets are in Vanguard ETFs, but I don’t have to deal with poor service. And doing RMDs at Schwab which include the ability to do withholding is easy as well. Finally, Schwab has actual offices that you can go to to get help…
Came here to say Schwab, too. I haven’t done QCDs yet (not old enough), but it’s great to hear that you can manage them yourself like that. Taking distributions and getting taxes withheld is very easy, too. And even my relatively small college town has a Schwab office. All of my accounts at Schwab are in Vanguard funds.
Does Schwab charge for buying Vanguard mutual funds? I still haven’t warmed up to ETFs.
They do but will waive them if you have substantial assets.
Thanks!
I like Fidelity. I’ve never taken RMDs so can’t speak to that specifically, but customer service in general is very good, as are website interfaces.
It’s an easy matter to fill out a simple online form to transfer your assets in, upload a copy of a recent statement, and let Fidelity do the work. They will transfer all your holdings in kind if you wish, including your Vanguard funds.
If once a customer you wanted to buy a Vanguard mutual fund you could do so, with a transaction fee that I believe is $75. However, I think you can reinvest dividends and capital gains into your transferred fund without a fee. Vanguard ETFs are of course free.
Thanks. $75 sounds high!
Maybe, but if you’re in broad market index funds as I believe you are, it doesn’t matter. There’s substantially no difference between a total market or S&P 500 or US Aggregate Bond index fund from Vanguard and a similar fund from Fidelity or Schwab. So since I choose to live at Fidelity, all my index funds but one are Fidelity funds.
My wife and I used to have Vanguard accounts and put up with their terrible customer service for many years because of the low investment fees. The strange thing that finally caused us to go to Fidelity and Schwab where the service is very good concerns a Coverdell IRA I opened for our daughter in the early 1990s. I opened the account, contributed $2,000 and promptly forgot about it, (we were busy, I guess). Over 20 years went by without any communication from Vanguard about the account until my daughter was in graduate school and I received a letter in the mail. The letter asked if we wanted to use the account to pay for our daughter’s education or do something else with the $3,500 the account was now worth. I called and asked how they could have an account where they did not contact me for over 20 years and never got an answer. My daughter was of course delighted as she needed a new computer and some other education related items that allowed her to spend the money without paying taxes. That was the end for Vanguard. We now are pleased with our Fidelity and Schwab accounts where we use some Vanguard ETFs. I do not hold a grudge.
Just curious. What communication did you want from Vanguard? If you self manage an account there, they do not contact you. You do get monthly statements, either online or in the mail.
Sounds like maybe you haven’t converted your IRA to a brokerage IRA to be able to transfer your RMD to your taxable account.
All my Vanguard accounts are brokerage accounts. Plus, as I said, it worked last year.
I’ve long had accounts at both Vanguard and Schwab. Fortunately, my SIMPLE IRA, from which I’m doing my QCDs, is at Schwab. The Schwab process is online and very straightforward. The Schwab website and customer service is generally miles above Vanguard.
Below, Dan says he has Vanguard funds in his Fidelity IRA. I don’t know if Schwab accepts Vanguard funds but I’m sure they accept Vanguard ETFs.
Many Vanguard funds can be converted to ETFs with no fees or taxes. If yours qualify, that would be an option if there’s any difficulty with transferring funds.
Schwab will let you have any Vanguard fund you want.
I have been thinking of opening a checking account at Schwab, for travel funds. They would likely be my first choice, so good to hear you are happy with them.
Kathy, is it really worth the hassles of moving over something you do so infrequently?
Maybe not, but it’s certainly something I expect to keep doing.
I’ve been happy at Fidelity, and own several Vanguard funds in my IRA. I won’t be doing a QCD until January, but the process appears intuitive.
Fidelity also offers some products that might interest you like checking accounts, bill pay, and credit card.
I hear pretty good things about Schwab as well.
I’ve been hearing that Vanguard has improved service, sorry to hear of your issues.
I was surprised. I’ve heard other people complain about Vanguard, but this is the first time I’ve had issues. It’s true that the two people I got on the phone were fine.