Vanguard: An Old Favorite for Mutual Fund Investing

Vanguard might be for you if: You're a hands-off investor who wants low-cost index fund ETFs and mutual funds. This broker is a longtime industry leader in passive investing, offering thousands of low-fee or no-fee diversified stock and bond ETFs and mutual funds, a wide range of investment account types, and an easy-to-use platform. Read our Vanguard review to see if this brokerage is the right choice for your investment goals.

My experience: I'm a longtime Vanguard customer, and despite some other people's recent complaints about customer service, in my experience the Vanguard Client Services team has always been super-responsive, helpful, smart, and detail-oriented. Vanguard's funds tend to have some of the lowest fees and a wide range of ways to invest in stocks and bonds. I'm not a day trader. If you want professional trading capabilities for active investing, Vanguard's not the right brokerage. But if you want to slowly, quietly, simply build wealth with passive investing in low-cost index fund ETFs, Vanguard makes it easy.

Vanguard offers a wide range of investment products and account types, and you can buy Vanguard ETFs with a minimum investment of $1 in your brokerage account. Vanguard is owned by its investors, so it keeps its costs low -- the average Vanguard ETF and mutual fund expense ratio is 82% less than the industry average.

Investments

• Bonds
• CDs
• ETFs
• Money market
• Mutual funds
• Stocks

Brokerage accounts

• Cash Plus
• Individual brokerage
• Individual 401(k)
• IRA
• Joint brokerage
• Organization accounts
• Roth IRA
• SEP IRA
• SIMPLE IRA
• Trust accounts
• UGMA/UTMA
• 529 savings

Vanguard, like most major online brokers, offers commission-free online stock trades. Although Vanguard's per-contract options commissions are not free, they're close: only $1. Vanguard charges $0 commissions for Vanguard ETFs and mutual funds, but it does charge commissions for some ETF and mutual fund trades from other companies. Both the options and mutual funds commissions can be waived for accounts with more than $1 million invested in Vanguard funds.

Margin rates

Vanguard offers margin loans that let investors borrow against the stocks, bonds, ETFs or other eligible securities that they hold in a brokerage account. Borrowing on margin can be risky, but it gives you a flexible line of credit.

Vanguard publishes extensive original research on the economy, markets, retirement savings, and investing. You can get free insights from Vanguard's experts on topics such as stock market trends, the U.S. and international economies, and deciding whether to invest in different asset categories.

Recent Vanguard research focuses on understanding the municipal bond market, deciding how much cash to have in your portfolio, and Vanguard's fundamental principles of investing success. In addition to its academic-style research, Vanguard offers extensive financial education content to help everyday investors.

Some of its recent educational content on investing strategies includes topics such as:

• How to build resilient portfolios through diversification
• Understanding robo-advisor performance
• How to choose a financial advisor
• What to do with your inheritance

Vanguard lets you open an account, manage your account, invest, and conduct transactions online through its online brokerage platform. Everything you need to buy stocks and ETFs with Vanguard is available through the Vanguard website.

The Vanguard interface is designed more for passive investors and it shows. If you only want to check your investment account balance a few times per year, or perhaps buy investments once per month on payday, Vanguard's interface should give you plenty of functionality to do everything you need.

Vanguard is definitely not a day-trading platform. If you are an active investor who wants more sophisticated trading tools for frequent stock trading and advanced investment strategies, other brokerages will likely be a better fit.

App

The Vanguard mobile app is available for Android and iOS, and lets you invest on the go via mobile device. You can use Vanguard's app to buy and sell investments, deposit checks via mobile check deposit, withdraw funds, check your account balance, track your investment performance, compare investment options, and more.

Vanguard's app gets significantly better reviews on the App Store (4.7 stars) than on Google Play (3.5 stars). Android users have recently complained about login issues and navigation problems; some Vanguard customers said that the Android app worked so poorly that they had to go use the Vanguard website instead.

Vanguard customer service seems to be going through a time of struggle. The company is not accredited by the Better Business Bureau (BBB); the BBB website gives Vanguard a grade of "F," with 202 customer complaints closed in the past 12 months. Trustpilot gives Vanguard a rating of 1.7 stars.

Customers have complained on the BBB website about serious problems with Vanguard's service -- such as:

• Vanguard allegedly failing to deposit a check from a 401(k) rollover
• A 76-year-old customer having their retirement account frozen because they could only remember one security question
• Over $40,000 missing from a customer's account

Vanguard is a major financial institution with more than 50 million clients. Just like the biggest banks sometimes make mistakes, with any brokerage of this size there are going to be a few customers that encounter problems and have bad experiences. But even Vanguard's biggest fans on the Bogleheads.org website (named after Vanguard founder John Bogle) have recently been complaining that Vanguard's customer service has gone downhill.

Maybe you can get better customer service by signing up for Vanguard Personal Advisor®? This service gives you automated investment help (like a robo-advisor), personalized investment planning, and on-demand access to Vanguard financial advisors. But you need a minimum of $50,000 of assets to qualify.

Vanguard Personal investors (which includes brokerage account customers) can contact Vanguard Client Services in the following ways:

• Call (877) 662-7447 during Monday-Friday, 8 a.m.-8 p.m. Eastern Time
• Send Vanguard a message through your account in the Personal investors site

Vanguard uses a variety of advanced, industry-standard security techniques to help protect your account. These include:

• Account activity alerts
• Biometric authentication
• Encryption
• Masking digits to protect bank account information
• Mobile app verification
• Two-factor authentication: security codes sent to your phone, or security keys
• Security questions for authenticating users
• SSL validation
• Username and password protection (disabling your password after a number of unsuccessful login attempts)

Vanguard was founded in 1975 and has become one of the largest and most influential investment management companies in the world. Vanguard's approach to investing is focused on keeping fees low and encouraging low-cost, long-term, uncomplicated, passive investing. This brokerage is popular with everyday investors who aren't trying to beat the market, but who want to buy and hold diversified portfolios of stocks and bonds -- without paying unnecessary fees and commissions. As of Dec. 31, 2023, Vanguard had more than $8.6 trillion of assets under management (AUM).

Keep reading about Vanguard on these pages:

At The Motley Fool Ascent, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and account types; however, we also take into account features like research, education, tax-loss harvesting, and highly rated mobile apps. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.

See our full methodology here: Ratings Methodology