IRA fees: Maintenance and inactivity fees
Although fees are largely going extinct, some live on. Fidelity charges no account fees for retail brokerage accounts or IRAs. Vanguard IRA accounts that are mutual-fund-only charge an annual fee of $25 for each Vanguard mutual fund. Vanguard brokerage account customers can avoid the $25 annual fee by signing up for electronic delivery of statements.
If you've ever seen the deluge of paper mail that a portfolio of stocks and mutual funds can create, you may prefer to have it all delivered electronically anyway. (Fun fact: The Wall Street Journal recently reported that 2 million trees are consumed each year printing mutual fund reports!)
You can also avoid Vanguard's account fee by having at least $5 million of qualifying assets with Vanguard. (But if you have that much money, you might not mind a $25 annual fee.)
Discount brokers drive down costs largely by eliminating many of the frills of full-service brokers. Today, though, many features are coming back, even though the costs are not. Online discount brokers offer their clients basic research functionality just for having an open account.
Vanguard offers a wide range of market news, insights, commentary, and research to help customers understand market trends and make investment decisions. It also offers a plethora of proprietary retirement tools, including its portfolio analysis tool for retirement savers. The tool analyzes your portfolio to show you how similar allocations have historically performed, going so far as to analyze it for expenses and taxes.
Similarly, Fidelity offers third-party research that includes insight from S&P, analyst upgrades and downgrades from hundreds of research companies, plus proprietary tools like Fidelity's insight into analysts' historical accuracy. The company's Planning & Guidance Center can be a real help in building a retirement portfolio, as it can score your savings progress and show you how changes to your assumptions and portfolio affect your retirement outlook.
We've just touched on a few highlights of each broker's research library. In truth, you'll find plenty to explore with either broker.
Best for IRAs: Vanguard vs. Fidelity
Considering they may be better known for their mutual funds, Vanguard and Fidelity have a lot to offer when it comes to brokerage services for IRAs. But which is better for you ultimately depends on how you invest. Investors who prefer Vanguard's funds may be better off going that route, while Fidelity loyalists would be wise to open an account with Fidelity, as it offers inexpensive and free ways to invest in its own mutual funds and ETFs.