T. Rowe Price vs. Vanguard



T. Rowe Price vs Vanguard Range of Offerings
Asset T. Rowe Price Vanguard
Short Sales  Yes Yes
No-Load, No-Fee Mutual Funds  >3,500 <3,500 (3,100)
Bonds  Yes Yes
Futures/Commodities  No No
Futures Options  No No
Complex Options  No No
Robo Advisory Yes 
(available, but separate)
Yes 
(available, but separate)
Cryptocurrency  No No
International Exchanges 0 0
Forex  No No
Fractional Shares  No No
OTCBB and Penny Stocks Yes Yes

Order Types

Vanguard and T. Rowe Price both support the same limited order types, consisting of market, limit, and basic stop/stop-limit orders. Neither platform offers conditional orders or trailing stops. The order types available at Vanguard and T. Rowe Price have the two brokerage companies tied in this category, too.

Trading Technology

While Vanguard’s order routing technology is basic, they report price improvement on stock orders of $0.0192 per share. Vanguard conducts a regular review of order fulfillment. In 2020, Vanguard’s net price improvement per share for orders 1-1,999 is $0.0192. Also, more than 95% of marketable orders for Vanguard ETFs up to 2,000 shares (26% of Vanguard’s trade flow) have been executed at the midpoint of the spread or better in 2020. Vanguard does not receive payment for order flow. 

In contrast, T. Rowe Price clears through Pershing, whose website only speaks about their obligation to provide the most favorable terms for their clients, without specific information on order improvement and execution. Pershing routes orders and receives payment for order flow. 

We feel Vanguard is stronger in this category because they don’t accept payment for order flow and are more transparent about cost savings.

Costs

Although T. Rowe Price and Vanguard both offer free online trading of equities and ETFs, they are both priced at the high end of online brokers we have reviewed. There are some differences in cost between Vanguard and T. Rowe Price. Options trading is more expensive at T. Rowe Price, as Vanguard charges $1 per options contract, while T. Rowe Price charges $9.95 + $1 per contract for account with at least $250,000 in the account, and $19.95 + $1 per contract for smaller accounts. So a trade for fifty options would cost $50 at Vanguard and $59.95 or $69.95 at T. Rowe Price depending on account size. 

In fixed income, Vanguard charges $1 per $1,000 face amount with a maximum of $250 for CDs, U.S. agency issues, corporate, and municipal bonds, with a $35 per trade cost for mortgage-backed securities and unit investment trusts. T. Rowe Price charges $1 per $1,000 bond for US Treasury and Agency issues, but $5 per $1,000 bond for corporate and municipal bonds, subject to a $35 minimum and $250 maximum.

Vanguard’s margin rates range from 8.5% for accounts with $10,000 balances to 7% for accounts with balances in excess of $100,000.  T. Rowe Price charges 7.875% for a $10,000 account and 6.375% for accounts above $50,000 with no further break points. T. Rowe Price charges a $30 account maintenance fee for accounts with less than $50,000, while Vanguard charges $20 for accounts with less than $10,000. Overall Vanguard has the edge when it comes to costs.

Account and Research Amenities

With their focus on long-term investing, neither Vanguard nor T. Rowe Price has strong account amenities. That said, T. Rowe Price customers do gain access to T. Rowe Price research. Vanguard offers daily market reports and third-party research from Argus and Market Grader. Vanguard’s stock screeners do not allow screening on technical indicators, while the T. Rowe Price stock screener does. Both platforms have ETF/mutual fund and fixed income screeners, and neither have an options screener. 

Both Vanguard and T. Rowe Price’s tools and calculators were sparse on the brokerage side, but there are a number of helpful tools on the mutual fund side, including calculators for retirement planning and college savings as well as risk profile questionnaires that recommend a model mutual fund portfolio.

While both platforms have charts, they are not impressive on either platform as they lack drawing tools. T. Rowe Price offers functional news and marketing information, but there are no search capabilities. Vanguard does not offer real-time streaming news, but news from MT Newswires and Associated Press is available. 

Overall, T. Rowe Price has a small edge over Vanguard for their overall account and research amenities offerings.

Portfolio Analysis

T. Rowe Price does not offer much portfolio analysis for brokerage accounts, and there were no analytical reports. The T. Rowe Price portfolio page shows composition, realized and unrealized gains, and projected cash flows, but no additional analysis. Vanguard provides reports and analysis in real time on the website, and this is customizable and allows aggregation of holdings from outside accounts. Because of this wider account integration with its portfolio tools, Vanguard gets our nod for better portfolio analysis.

Education

Vanguard and T. Rowe Price have long provided educational tools for their long-term investor clients, so the focus of their content is setting financial goals and creating a plan of action for reaching them. Both platforms also have a glossary of investing terms. Neither platform goes deeper into educational tools because their focus is on customers with a long time horizon that are not as likely to use complex options and other trading strategies compared to some of the online brokerage platforms catering to more active traders. We found Vanguard to have a bit more to offer, so it has a small edge over T. Rowe Price. 

Customer Service

Customer support is comparable at T. Rowe Price and Vanguard, with both companies offering customer service from 8 a.m. to 8 p.m. EST, and neither offering live chat or chat bots. Neither platform holds any edge on customer service.

Security

Vanguard and T. Rowe Price both offer multi factor authentication and neither has suffered a recent platform outage or significant data breach. The two brokers carry excess Securities Investor Protection Corporation (SIPC) insurance through Lloyds of London. Once again, we find the two platforms to be comparable, with neither having an edge over the other.

Our Verdict

Vanguard and T. Rowe are both companies that compete for long-term investors. If you are looking for anything beyond buy-and-hold, like day trading or frequent options, neither broker is set up to serve you. As T. Rowe Price and Vanguard are both pursuing the same investors, this naturally means their brokerage platforms are very similar, from product offerings to technology platforms to cost. Overall, however, we give a very small edge to Vanguard over T. Rowe Price because their platform was a bit easier to use, their pricing was slightly more competitive, and their analytics and education offerings were also better than T. Rowe Price.

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Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.

In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.

Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.



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