T. Rowe Price vs. Vanguard

T. Rowe Price and Vanguard are similar in that they both focus on long-term investing through their own funds. In addition to their funds, however, you can also have a linked brokerage account. Because of this focus on their own financial products, neither brokerage platform is particularly strong compared to some of the leading online brokers, but they do provide the ability to trade stocks, ETFs, mutual funds, and fixed income. We’ll look at some of the key differences between these brokers to help you determine which one is the right fit for your investment needs.

Usability

The account opening process was slow at Vanguard and requires several days of waiting. T. Rowe Price allows you to open an account and start trading in 10 minutes. While Vanguard’s platform is dated and could benefit from improved navigation, it can also be customized for investors’ interests. T. Rowe Price’s platform has an awkward two-tiered process that initially brings you to a homepage showing balances for mutual funds and the brokerage account, with an additional link to the brokerage platform powered by Pershing LLC. While neither broker’s platform was best in class, Vanguard’s was a bit more intuitive and flexible, and had more consistent menus between online and mobile platforms. This gives Vanguard the edge on usability.

Trade Experience

Desktop Trade Experience

Vanguard and T. Rowe Price both have web platforms while lacking separate desktop applications. Neither broker’s website normally operates in streaming real-time (except for trading/order entry pages), although the static updates are quick. T. Rowe Price sometimes has real time balances though. While Vanguard’s website is built in-house, T. Rowe Price uses Pershing to clear and provide their online brokerage platform. T. Rowe Price only allows for basic orders such as market, limit, stop, and stop limit orders, and only has limited options trading capabilities. Vanguard essentially mirrors this, but reportedly does not have a limit on options legs. However, its platform is not the greatest for complex options trading. Neither Vanguard nor T. Rowe Price allow for conditional orders, trailing stops, or multiple order entry. Both platforms are designed for long-term buy and hold investors, so their platforms obviously fall short for active/frequent traders. The desktop trading experience on both platforms is a tie, with neither system impressing.

Mobile Trade Experience

Consistent with platforms not designed to cater to active traders, we continue the trend of not impressing with mobile trading. On Vanguard, quotes are again delayed quotes until order entry, and there is no other data, such as the day’s change. Further, Vanguard does not offer any charting on its mobile app. Vanguard does allow users to customize their “My Feed,” which displays account information, news, blogs, transaction history, and performance. Asset classes available on the mobile may be limited. T. Rowe Price provides basic charting on their mobile app, which works fine for basic orders. Otherwise the app suffers from the same limitations of only handling basic orders without the ability to handle contingent orders, trailing stops, or complex options strategies. Because T. Rowe Price’s mobile platform provides basic charting, we give it a slight edge over Vanguard’s mobile app.

Range of Offerings

T. Rowe Price and Vanguard offer the same products, including equities, ETFs, equity options, and fixed income. T. Rowe Price allows the trading of OTC and pink sheet stocks while Vanguard suspended this in the spring of 2022. Neither brokerage company offers futures, options on futures, foreign exchange, or crypto-currencies. The range of offerings for Vanguard and T. Rowe Price are just about equal.

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.