Alyaziah Hayat | May 9, 2022
Table of Contents
Vanguard offers a range of investment products for mid to long-term US investors. However, I found their trading platforms, tools, and funding options to be limited as compared to other online brokers such as eToro. I also don’t like how they do not provide Forex trading, CFDs, or Cryptos like other top brokers such as IC Markets.
Broker Pros / Cons
- Commission-free ETFs
- No minimum account opening fee
- Limited funding options
- Limited trading platforms & tools
- Limited market research & data
- No Forex, CFDs & Cryptos
- Not ideal for day traders
Founded in 1975, Vanguard provides US investors with an online trading service via the Vanguard Brokerage Account. Amongst their predominantly US investment product range, you can trade a vast array of mutual funds, ETFs, stocks, options, Certificate of Deposits (CDs) & bonds. I noticed that they are geared more towards the mid to long-term investor rather than day traders.
Vanguard does not have the cheapest fees on stocks, options, and bonds but does offer some free ETFs for trading. Though I like how they provide you with a choice of basic yet user-friendly trading platforms. I would’ve preferred if they had a better selection of trading tools. As they tend to be primarily focused on long-term investments and retirement plans of high net worth investors, this does mean that the trading infrastructure may not be as suitable for the average active retail trader. For better trading conditions, I suggest checking out FXTM.
Vanguard executes your orders through trading partners with best execution practices to help ensure the best possible prices. I like how they have quarterly reports available that show details on the relationships that they maintain with their trading partners. I also appreciate that they frequently conduct in-depth reviews on the market centers that they utilize to ensure the trading conditions offer acceptable execution speeds, reliable services, and liquidity.
Since they were founded in 1975 by Jack Bogle, they have grown into a company whose main focus is on providing you with low-cost investment options and a variety of different investment account types. The founder states on the Vanguard website that:
“From its start in 1975, Vanguard has stood out as a very different kind of investment firm. Vanguard was founded on a simple but revolutionary idea that a mutual fund company should not have outside owners.” Founder John C. Bogle structured Vanguard as a client-owned mutual fund company with no outside owners seeking profits.
Vanguard is regulated by the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) in the United States. Although they aren’t regulated by any tier-one body, I believe these regulations are enough since they’re currently only focusing on the US market.
As a United States online broker, Vanguard is mainly focused on providing its investment services to clients within the US. They do however have a global presence through their subsidiaries and partners. I should also mention that the product range can vary for each country. If the product range is not satisfactory for your country, you could find an alternative using our broker comparison tool.
Vanguard provides a proprietary very basic web and mobile trading platform. I don’t enjoy the web platform as it is not the most intuitive and has very limited customization features. However, I do appreciate that it implements two-step login authentication for security. There is support for basic order types; market, limit, stop & stop limit. You need to search for trading assets which can be a clunky and awkward experience. I don’t like how alert notifications can only be sent via email whereas other online brokers like Pepperstone tend to offer SMS and platform notifications.
I prefer the Vanguard Investor mobile platform as it is slightly easier to get around and compatible with both iOS and Android devices. You can only trade stocks, ETFs, and mutual funds via the mobile platform. Overall, most other online brokers like AvaTrade offer more advanced trading platforms with more features and functionality, including the ever-popular MetaTrader platform.
Vanguard does have a limited selection of educational materials to assist investors with their long-term plans. They also have a toolbox that includes investment calculators and other tools to help strengthen your financial strategy and planning. You can compare investment funds side by side to see a more complete picture and use the stock screener to screen and analyze a list of investment products that you are interested in.
However, they are lacking in research tools for market analysis which again backs the fact that they are perhaps not the most suitable option for the average day trader who needs to conduct technical and fundamental analysis. Quotes are also delayed which can be frustrating especially considering there are so many other brokers who provide free real-time quotes.
Vanguard has a vast range of investment products so that you can design a portfolio of your choice with any combination of mutual funds, ETFs, individual stocks, options, Certificate of Deposits (CDs) & bonds. The investment products offered include:
- Mutual funds – They offer a variety of over 120+ different types of mutual funds. Mutual funds are free but other mutual funds that are outside Vanguard cost $20 per trade.
- ETFs – There is a choice of exchange-traded funds that are similar to a mutual fund but trade more like a stock. Vanguard provides commission-free online trading on approximately 1,800 ETFs, provided you do not buy or sell more than 25 times per year.
- Stocks – Clients can take a hands-on approach by choosing from a range of individual stocks that they would like to add to their portfolio. Stock fees start from $7 per trade.
- Options – Choose from a selection of options which cost $7 + $1 per contract.
- Certificate of Deposits (CDs) & bonds – They have an extensive online selection of fixed-income investments that can help investors to find CDs or bonds that meet their individual financial goals.
You can choose from a variety of retirement and investment Vanguard accounts depending on your individual goals and requirements. Whatever your age or investment strategy, there is something for everyone. Accounts include:
- Individual & joint accounts – These are the standard investment accounts, primarily for those who are getting started with investing or if other accounts have been maxed out.
- Individual retirement accounts (IRAs) – They offer Roth and traditional IRAs for retirement savings separate from employer-sponsored plans.
- SEPs, SIMPLEs & i401(k)s – These accounts are useful if you have your own business, whether you are self-employed or have employees.
- Annuity accounts – There is a choice of variable annuities that can help to maximize tax benefits of retirement accounts although perhaps not a suitable option for everyone.
- Savings accounts – The 529 college savings plan can be used to save for your children’s college education and has some tax benefits that should be discussed with a qualified advisor.
The larger your account balance, the more discounts and potential free trades you can receive. In general, I found that Vanguard accounts with no more than $50,000 in assets tend to face higher trading fees.
I appreciate that there is no minimum deposit size required to open a Vanguard brokerage account. However, you will need to meet the minimum requirements for purchasing the investment products that you wish to trade. Some funds have a $1,000 minimum whilst others can require a minimum $3,000 – $10,000 amount which can rule out some investors. There is a minimum of $2,000 required to trade on a margin account and a minimum of $50,000 for the Vanguard Personal Advisor Services.
Although they are mainly focused on offering self-directed investment products, I like how Vanguard also offers managed portfolios and Robo-advisors. Whilst these can be customized to meet your objectives and are hands-off, they do come with extra fees.
Vanguard offers a personal advisor service to help you find a portfolio that is suitable for your goals and preferences. They provide customer support via email and telephone from 8 am-10 pm Monday through to Friday EST. I find that it would be more convenient if they offered an online live chat customer service option that would be available 24/7. You can check out EXANTE if this matters to you too. You can also find some guides and resources on their website.
Vanguard’s deposit and withdrawal methods are very limited. I don’t like how they only support wire transfers and USD currency accounts. Deposits have no fee charged but some fees may be charged for withdrawals. The withdrawal time can vary as bank transfers may take a few business days to clear. I believe the funding methods could be greatly improved perhaps by adding some convenient online payment processor options such as PayPal, Skrill, or Neteller.
You can open a Vanguard account online. Although it only takes a few minutes to apply, it can take up to 3 business days or more for your account to be verified. During the account opening process, you will need to choose your account type, specify your investment goals, provide personal information, choose your preferred funding method, and agree to the terms and conditions. Once you have provided the required verification documents (passport, driver’s license, utility bill, etc) your account can be verified for you to fund and start trading.
|Broker Features||AvaTrade||IG||IC Markets|
|Regulated||ASIC, BVI, CBI, FFAJ, JFSA, FSCA, IIROC, ADGM FRSA||FCA, CFTC, NFA, BaFin, FINMA, ASIC, FMA, MAS, FSA, FSCA, DFSA, JFSA, METI, MAFF||ASIC, CySEC, FSA, SCB|
|Country||Australia, Ireland, South Africa, Japan, British Virgin Islands||Australia, UK, USA, Switzerland, UAE, Singapore, Japan||Australia, Seychelles, Bahamas, Cyprus|
|Min. Deposit||Min $250 Deposit||Min $100 Deposit||Min $200 Deposit|
|Commission||From $0||From $0||From $0|
|Instruments||Forex, Commodities, Cryptocurrency, Stocks, Shares, Indices, Metals, Energies, Options, Bonds, CFDs, ETFs||Forex, Commodities, Stocks, Shares, Indices, Cryptocurrencies, Metals, Energies, Options, Bonds, ETFs, CFDs||Forex, Commodities, Cryptocurrency, Stocks, Shares, Indices, Metals, Energies, Bonds, CFDs|
|Platforms||MetaTrader 4, MetaTrader 5, AvaTradeGO, AvaOptions, AvaSocial, DupliTrade, ZuluTrade, Web, Mobile||MetaTrader 4, IG Platform, IG Progressive Web App, ProRealTime (PRT), L2 Dealer, FIX API, Web, Mobile||MetaTrader 4, MetaTrader 5, cTrader, Web, Mobile|
|Type||Market Maker, STP||STP, ECN, DMA||ECN|
|Funding||Wire Transfer, Credit/Debit Card, Paypal, WebMoney, Neteller, Skrill||Wire Transfer, Credit/Debit Cards, PayPal||Wire Transfer, Credit Card, Debit Card, WebMoney, Neteller, PayPal, Skrill, FasaPay, UnionPay, Qiwi, Bpay, Poli|
|Visit Broker||Visit Broker||Visit Broker||Visit Broker|
I like how Vanguard has a wide range of commission-free ETFs and generally competitive non-trading-related fees. There is also a range of account types to choose from and they do support self-directed investments or managed portfolios. Despite this, they are not the most convenient option for the average retail day trader. The trading platforms, tools, and funding options are very limited whilst they do not offer to trade on Forex, CFDs & Cryptocurrencies. You can find a broker with a greater range of products and services through our best brokers.