Vanguard's online brokerage unit isn't the biggest broker but it has something some rivals don't have: its clients' trust.
Vanguard captured the highest trust rating among online brokers in Investor's Business Daily's Most Trusted Financial Companies survey. And it was third overall among all types of financial companies, with a trust rating of 89.8.
Charles Schwab was next among online brokers and was fourth overall among Most Trusted Financial Companies.
"We are both grateful for and humbled by the trust our clients place in us every day and we never rest in our efforts to improve our service to them," said Matt Benchener, managing director of Vanguard Retail Investor Group. "At Vanguard, client trust is more than a goal. It is fundamental to all that we do."
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- Read Our Full Special Report On Most Trusted Financial Companies
Vanguard Says Trust Is Fundamental
"I trust Vanguard because of their reputation," said Joe Petersimes, 66, a retired engineer from St. Peters, Mo. That's even though he hasn't been happy about Vanguard's website, which he says is "not even close to what other companies like Charles Schwab have to offer." He even called Vanguard to complain. "They said they would look into it. They are changing their website to make it more robust."
Regardless, he said, "I want to keep my money there." He has no plans to leave Vanguard.
Schwab also says trust is "fundamental to the values of our firm, and we are honored by this recognition," said Jonathan Craig, managing director, head of Investor Services & Marketing at Schwab. "Schwab was built around a simple idea: put the client first. Lots of companies say that, but our dedicated teams go above and beyond what's expected every day to earn and maintain our clients' trust."
Chuck Hoch, an octogenarian from Charlotte, N.C., says the people at Schwab help him gain trust. "I use Charles Schwab for my broker, mostly because they opened an office near my home, and I like the people there. Plus, I feel that they are on the up and up."
3 Most Trusted Online Brokers
| Company | Overall Trust Rating | Privacy | Quality | Ethics | Price | Customer Service |
|---|---|---|---|---|---|---|
| Vanguard Brokerage | 89.8 | 91.5 | 89.2 | 90.8 | 87.8 | 89.1 |
| Charles Schwab | 88.6 | 90.0 | 88.1 | 89.1 | 86.4 | 88.8 |
| Fidelity | 86.8 | 89.1 | 88.7 | 87.1 | 82.6 | 85.5 |
Schwab, Fidelity Also Win Honors In Most Trusted Online Brokers
Schwab's trust rating was 88.6. Fidelity nabbed third place among online brokers, with an overall trust rating of 86.8.
Vanguard also earned the highest trust rating among ETF and mutual fund companies.
On some other measures, Vanguard brokerage does not rank as highly. In this year's IBD Best Online Brokers survey, Vanguard was not among the top five. In terms of size, Vanguard's revenue from its brokerage business pales next to online brokers like Fidelity and Schwab.
Vanguard's Benchener said, "Vanguard is mission-driven and client-owned. We seek to earn clients' trust by giving them a distinct connection to a broader purpose, helping them achieve their investment goals and providing them with unmatched long-term outcomes."
Investor's Business Daily conducted a survey with polling partner TechnoMetrica Market Intelligence to find out which are the Most Trusted Financial Companies. We asked 6,578 consumers in July and August 2021 to rate financial companies they do business with on five trust attributes: data privacy and security, quality of products and services, ethical business practices, prices and fees, and treatment of customers. See our story on the methodology behind this survey.
Analysis of the IBD survey revealed which are the most trusted online brokers based on trust ratings by their own customers. We recognize the top three as the most trusted in their business category.
Nine online brokers made the cut to be included in our survey. The others were: TD Ameritrade, Ally Invest, BofA Securities-owned Merrill Edge, E*TRADE/Capital One Investing/ShareBuilder, Interactive Brokers and Robinhood.
Follow Michael Molinski on Twitter @IMmolinski
