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Don’t miss an episode of our podcast, Personal Finance for Long-Term Investors. Available on all podcast players. Here’s the latest episode: Reader Doug wrote to me this week: Any thoughts on using one of the ‘Big Three’ as a financial advisor.  Fidelity, Schwab and Vanguard have different programs at different price points (shown below).   For some background…it’s vital to remember that these companies swim in various lanes at the same time. They are custodians – places where you can open and keep accounts. They are fund managers – organizations that offer ETFs, mutual funds, etc. that you can pay to invest in. They also offer advisory services. These organizations can be great custodians and excellent fund managers, yet have different standards for their advisory services. I’ve got some thoughts for you, Doug. There’s a Spectrum I’m biased here. It’s important I disclose that. Though I’d like to think my bias is “pro-client.” Here are some great questions to help you discern between good, bad, and ugly advisors. And definitions about how fees are charged. I’d also recommend this podcast episode too: The broader point is that: Some advisors provide detailed planning. Others don’t. Some advisors sell commissioned products (insurance, annuities, etc) and others are fee-only. Some advisors charge high fees, others low fees. Some advisors intentionally work with 40, 60, 80 clients. Other advisors work with 200+. All else being equal, you’d probably prefer an advisor who provides detailed planning, is fee-only, spends plenty of time with you, and charges reasonable fees. So – is that what the “Big Three” provide? Service Tiers We should be looking at the “dedicated advisor tier” in the table below. The robo-only and hybrid tiers provide very little human expertise. They are essentially “investing-only” services. That’s fine – if that’s what you want. But if you are looking for true financial planning, we want to look at the “Dedicated Advisor” tier. Fees Vanguard is the clear winner here at 0.30%. Fidelity and Schwab charge fees much closer to what small, independent financial planners charge. Fidelity’s fees start very high. Well above 1.0% on the first $1M in a client’s portfolio. Schwab’s fees are more reasonable. Client Service and Planning Client service and in-depth planning are where the rubber meets the road. I’ve had a ~dozen prospective clients (and a handful of actual clients) talk to me after working with one of these Big Three. I also regularly read online communities – both of individual investors (customers of the Big Three) and of other financial advisors (including many who work for the Big Three). The commentary always sounds the same. Advisors at the Big Three are overworked. They have too many clients to serve each client well.