I'm not the person you asked, but since you invoked Bogle, you should know that Vanguard (a) uses wholesalers and (b) has publicly and repeatedly claimed that high-speed electronic market-makers have improved outcomes for their investors.
As a regular investor who is making his way through "A Random Walk Down Wallstreet," it is hard to look at how Wallstreet has behaved over the years and not feel paranoid that I'm being taken advantage of at every turn. Right now I like the Bogleheads approach to investing, and the logic behind it, but am interested in how even that approach is potentially being taken advantage of, and what those real risks are to investors of that philosophy. Or...is that even something to be worth getting concerned over and is there a bigger threat I should be focused on learning about?
Wholesalers make things even better for the retail buy and hold guy by filling them inside the bid/ask spread. The kickbacks they pay to brokers mostly translate into very low brokerage fees. Now you can trade stocks for a few dollars at a penny spread but it was $50 or $100 in commission years ago, with spreads of eighths or quarters, which can really eat into your savings when you're investing a small amount.
The main things I'd say to be wary of are:
a.) Trying to compete with professional intraday traders. Even if you have a good feel for the market, someone faster and smarter is going to beat you to the punch most of the time. The markets are much, much tougher for day traders, and the complex structure makes it easier for sophisticated automated traders to take advantage of them. It's just a waste of time and money.
b.) Trading when the markets are in a crisis mode. Automated market makers don't have as much capital as the big banks did because there's simply less "juice" in the business, so they won't be there buying forever in a falling market. No market maker ever would, but when they were earning quarters instead of pennies, there was more incentive to take on risk because the market had a built-in edge. Computers also have a lot of safety logic that can make them leave the market due to bad data during extreme events. You should always set a reasonable limit price on your orders, avoid trading around volatile times like the open or economic releases, and avoid market stops or other order types that can make you trade in an illiquid market at the worst time.
c.) Putting your money into things that are either risky like individual "hot" companies where you're competing with the best hedge fund analysts or products that are inherently bad to buy and hold (leveraged ETFs, commodity/volatility ETFs often have time decay or lose money rolling futures).
So if I'm largely a buy-and-hold kind of guy with my investments, there's not much to worry about from these practices then it sounds like. I do still worry what the risk is for buy-and-hold investors flocking to index funds as that seems like it is ripe for a problem of some sort, but given the nature of what an index fund is, I'm having trouble identifying how that could be a big issue.