Vanguard vs. Mercer: what’s the difference?

1 min readLast updated June 18, 2024by Unbiased team

Vanguard is an investor-owned firm that is appreciated for its low fees and extensive range of financial services, while Mercer is recognized for its comprehensive financial advisory services and global presence.

Summary 

  • Mercer is one of four operating subsidiaries of Marsh McLennan. 

  • It's the world's largest investment advisory, with US$15 trillion under advisement. 

  • Vanguard's Digital Advisor was awarded "Best Robo-Advisor for Low-Cost Investing" in 2023 by NerdWallet. 

  • Vanguard strongly emphasizes sustainability, accountability, and putting investors first. 

Mercer vs. Vanguard: what’s the difference?  

Mercer and Vanguard are prominent firms in the financial services industry. Vanguard was founded in 1975 in Pennsylvania and is a renowned investor-owned management company known for its low-cost index funds and ETFs. It remains a favorite among individual investors because it emphasizes minimizing fees and investment stewardship. Their offerings include:

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  • Advice 

  • Enduring investments 

  • Retirement 

  • Intellectual capital 

On the other hand, Mercer, established in 1945 and headquartered in New York City, specializes in providing consulting, investment management, and retirement services to institutional clients and corporations worldwide. The consulting firm is represented in 180 cities across 43 countries and offers a few distinct lines of business: 

  • Health and benefits 

  • Investments and retirement 

  • Workforce and careers 

  • M&A advisory services 

What are Mercer and Vanguard’s specific investment strategies?  

Vanguard's investment strategy is to "focus on the things you can control." The firm is widely recognized for its passive investment strategy, offering a range of low-cost index funds and ETFs to track various market indexes' performance. Vanguard’s financial planning focuses on diversification and long-term growth through broad market exposure. 

Conversely, Mercer adopts a more diversified and active investment strategy, leveraging its extensive research and expertise to provide tailored investment solutions for institutional clients. Their approach is one of active management, and their team of financial experts actively selects and manages investments to achieve their clients' specific financial goals. 

What fees can I expect from Mercer and Vanguard?  

Mercer and Vanguard charge fees for their services, as is common in the investment industry. Vanguard typically charges fees known as expense ratios, a percentage of assets under management that cover operating expenses. These fees are relatively low compared to what many other investment firms charge. Vanguard's transparent fee structure even shows you how to avoid unnecessary costs. 

Mercer's fee structure varies according to the specific services provided, including advisory fees based on assets under management, performance-based fees, and possibly other charges such as account maintenance or transaction fees.  

Is Vanguard or Mercer better? 

Deciding between Vanguard and Mercer depends on investor needs and focus. For instance, Vanguard’s financial planning is more suited to individual investors, while Mercer financial advisors work more with institutional clients and corporations. However, both companies have their strengths and weaknesses: 

Pros of Mercer 

  • Extensive expertise in financial consulting and advisory services. 

  • Customized investment solutions tailored to institutional clients' needs. 

  • Global presence (43 countries) and access to various investment opportunities. 

Cons of Mercer 

  • Higher fees compared to Vanguard, especially for personalized financial advisory services. 

  • Possibly less accessible to individual investors due to the focus on institutional clients. 

  • Potential for higher minimum investment requirements compared to Vanguard.

Pros of Vanguard 

  • Low fees and expense ratios. 

  • A broad range of low-cost index funds and ETFs. 

  • A strong emphasis on investor education and long-term wealth accumulation. 

Cons of Vanguard 

  • Limited access to personalized financial advice for individual investors. 

  • Relatively basic customer service. 

  • A smaller range of investment options compared to Mercer. 

Mercer or Vanguard: which should I choose? 

Depending on your circumstances, Vanguard might be preferable for individual investors seeking low-cost, diversified investment options. However, if you're an institutional client requiring tailored investment solutions, Mercer's financial advisor's expertise, comprehensive services, and resources might be more suitable. 

While considering fees, investment strategy, and various pros and cons can help you decide, here are some questions you should ask yourself when choosing between Vanguard and Mercer: 

How do Mercer and Vanguard remain competitive and adapt to changing market conditions? 

Mercer and Vanguard remain competitive by continuously innovating their product offerings and services. Both companies adapt to market trends and leverage technology to enhance customer service. They also prioritize research and development to stay competitive in the dynamic financial landscape. 

Which platform provides better customer service and support? 

Vanguard customer service is often praised for its efficient and responsive nature and for offering support through various channels. Also, since their focus is more on individual investors, Vanguard's customer support is typically more accessible than Mercer's. 

Can I access my Vanguard or Mercer accounts through their websites and mobile apps? 

Vanguard and Mercer offer online platforms and mobile apps for clients to access their accounts conveniently. The Mercer app is Mercer Money, while the Vanguard app goes by the firm's name. 

These platforms allow clients to monitor their investments, transact, and access relevant information anytime, anywhere. 

Get expert financial advice  

Mercer and Vanguard are two prominent financial firms in the US. Vanguard excels in low-cost index funds, while Mercer offers comprehensive advisory services geared more toward corporate clients. Both firms adapt to market changes and provide online platforms for their clients' convenience and accessibility. 

Choosing between firms depends on investor needs, with Vanguard suited to individual investors and Mercer targeting institutional clients.  

For personalized financial advice and customer service, let Unbiased match you with a professional SEC-regulated financial advisor that best suits your circumstances and goals. 

Writers

Unbiased team

Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.

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