https://en.wikipedia.org/wiki/Rope

On an investment manager company level, out of the majors Vanguard index funds are almost always the right way to go. Unlike their rivals (BlackRock, Fidelity etc ...) they are fully owned by their investors rather than listed companies.

Listed companies have the conflicting interest of needing to manage their share price and pay dividends, whereas they do not. This and their scale is what allows them to often have the lowest fees*.

*nsfw for cussing.

This video has been flagged as being Not Suitable For Work - declared nsfw by ant.

Sweet knowledge and piggy pictures.

I never paid much attention to my employer's 401k administrative fees until they recently changed 401k providers. I was blown away that our new CFO with the company for the last year, not only fought to introduce Vanguard funds as investment choices, which offered significant cost savings, changed our 401k provider. When I looked into the paperwork to try to figure out why, it became abundantly clear - he saved 1% in annual administrative fees on the plan.

Kudos to him! I sent him an email immediately thanking him for doing an awesome thankless job hardly anyone will likely appreciate.

In fairness, Vanguard funds are not almost always the lowest. I'd say they often are, but Fidelity beats them enough of the time that it's close between them.

With that said, I am in agreement with you that I would prefer Vanguard because of their ownership model. But as I accrue assets in my IRA's, I may open IRAs with Fidelity as well, as each of your retirement accounts' balances are ensured per account for up to $250,000. I would trust Fidelity as well, so I might diversify my index funds between fidelity and Vanguard for the insurance and other reasons.

Good point. I admit I'm mostly quoting The Economist's recent article on it, since I haven't compared them myself:

"Meanwhile, fees as a percentage of assets under management have dropped from 0.68% in 1983 to 0.12% today (see chart). This compares with an industry average of 0.61% (or 0.77%, when excluding Vanguard itself). Fees on its passive products, at 0.08% a year, are less than half the average for the industry of 0.18%. Its actively managed products are even more keenly priced, at 0.17% compared with an average of 0.78%."

http://www.economist.com/news/finance-and-economics/21700401-vanguard-has-radically-changed-money-management-being-boring-and-cheap-index-we

Also: http://www.economist.com/news/leaders/21700390-rise-low-cost-managers-vanguard-should-be-celebrated-slow-motion-revolution

Totally agree with you on diversifying across index funds (as safe as fund managers are in theory compared to other financial institutions, I would never assume any financial company is 'safe') and of course staying under $250K FDIC insurance level.