Fidelity is a full-featured discount brokerage service that includes virtually every investment and banking service you need. The mobile app is also one of the best for trading on the go. However, the service is slow to roll out new features.
- Active traders
- Smartphone users
- Options traders
- IRA investors
- Local branches
Review of: Fidelity Investments
Reviewed by: Kat Peach
Last modified: September 13, 2018
The Internet Age has brought us a large selection of discount online stock brokers, but sometimes the best products are tried and true. With a long history of helping people trade stocks that stretches back more than 70 years, Fidelity certainly knows what it’s doing. And with a brand spankin’ new pricing model, the broker is poised to bring its platform to a whole new generation of investors.
So how does this long-established discount broker stack up, especially to the new online platforms that keep cropping up? We took a close look at Fidelity, and this is what we found.
Fidelity Investments Fees & Features
|Options Trades||$4.95/trade + $0.65/contract|
|Investment Types||Stocks, Options, ETFs, Mutual Funds, Bonds|
|Access||Website, iOS App, Apple Watch, Android App|
|Broker Assisted Trade|
|No Fee ETFs|
|Customer Service||Phone: 24/7; Live Chat: 24/7; Branch Office|
What Is Fidelity?
Fidelity first opened the doors of its Boston headquarters in 1946. In December 2017, the company reported assets under management (AUM) of $2.4 trillion. That made it the fourth-largest asset manager, behind BlackRock ($6.3 trillion), Vanguard ($5.1 trillion), and Charles Schwab ($3.4 trillion).
But despite Fidelity’s size and age, don’t classify it as a dinosaur just yet. The company has a history of staying on trend, offering its first 401(k) products in 1982 and computerized stock trading in 1984.
Unlike many of the brand-new stock broker platforms, Fidelity exists off-screen too. The company offers nearly 150 brick-and-mortar investor centers throughout the U.S.
Mention must also be made of Fidelity’s wide range of mutual funds. Granting investors exposure to everything from U.S. large-cap stocks to real estate to specialized sectors, Fidelity funds offer variety for your portfolio for no minimum entry fee. And many of them are commission-free, too.
How Does Fidelity Work?
Signing up for a new Fidelity account is simple and should take only a few minutes. Transferring is easy too – in fact, Investor Junkie founder Larry Ludwig transferred his account from E*TRADE by visiting his local Fidelity branch. Larry reports that the entire process took less than a week.
One of Fidelity’s most popular features is Full View. This feature allows you to monitor all of your online financial accounts – including those outside Fidelity – in one place. You can create a budget, track your spending, view your bill-pay accounts and view all of your transactions in a monthly calendar display.
Available to all Fidelity customers, Full View is similar to what you get with Mint.com. But while Fidelity has made improvements to this feature over the years, it still isn’t quite as seamless as Mint.
If you’re a research nerd like me, you’ll be pleased with Fidelity’s unparalleled resources. The platform offers comprehensive tools and analysis from the likes of Thomson Reuters and McLean Capital Management, along with many more. You can also set up monitoring so that you’ll receive an alert when there’s an update to one of the securities on your watch lists.
Equity Summary Score
Here’s another helpful tool: Fidelity assigns individual stocks their own Equity Summary Score. These scores consolidate the ratings granted by the platform’s independent analyst and research partners. So rather than spending hours sifting through many research webpages, you’ll reach a consensus in one spot (it’s sort of like the Rotten Tomatoes of the stock market). You’ll also find a Morningstar rating for each mutual fund listed.
Active Trader Pro
Then there’s Active Trader Pro. Once installed, this customizable desktop platform offers many of the features an active trader would want:
- Real-time streaming market data
- Advanced charting
- Real-time profit and loss estimates from hypothetical selling
- One-click trading
Fidelity also offers Android and Apple apps with features such as:
- Real-time market quotes for logged-in customers. All other investors receive 15-minute delayed quotes.
- Up-to-the-minute news stories
- Top stock % gainers, top % losers and most actives
- Monitor your money: positions, balances and intraday changes
- Trade stocks, mutual funds, ETFs and options all from your iPad!
- View account history
- Compare stocks within their chart view
Fidelity’s Updated Pricing
OK, this is where Fidelity really stands out.
Likely thanks to the pressure from Millennial-driven broker platforms such as Robinhood, which offers practically “free everything,” Fidelity recently revamped its pricing structure. Here’s what you’ll find.
Zero Minimums and Fees
No matter how much – or how little – you have to invest, Fidelity will welcome you. The platform now requires across-the-board zero investment minimums to open a retail brokerage account. But Fidelity also went a step beyond and eliminated account and domestic money movement fees on its accounts as well. So you won’t get nickel-and-dimed for stop payments, bank wires, etc.
Fidelity ZERO Index Funds
The brokerage rolled out four new index funds with zero expense ratios. That means, no matter how much they invest in either fund, investors will pay ZERO fees. And none of these funds requires a minimum investment. Compared to competing funds, these ZERO products could save you a ton of money.
|Index Fund Name||Ticker||Function|
|ZERO Total Market Index Fund||FZROX||Corresponds to the total return of a broad range of U.S. publicly traded companies|
|ZERO International Index Fund||FZILX||Corresponds to the total return of foreign developed and emerging market stocks|
|ZERO Large Cap Index Fund||FNILX||Corresponds to the total return of a broad range of large-cap U.S. companies|
|ZERO Extended Market Index Fund||FZIPX||Corresponds to the total return of a broad range of mid- to small-cap U.S. companies|
Reduced Pricing on Existing Index Mutual Funds
And for the mutual funds already offered by Fidelity, the platform has slashed its prices. On average, the asset-weighted annual expense across Fidelity’s index fund portfolio will decrease by 35%. Some funds will cost as low as 0.015% in fees. Fidelity estimates that these changes will save investors about $47 million annually.
Zero Minimums on Mutual Funds and 529 Plans
Whether you’re investing toward your retirement or saving for your kid’s college education, you will no longer need to invest a minimum for Fidelity-branded mutual funds or 529 plans.
Pros and Cons
- Cheap Trades — Great pricing on trades and free trades on select ETFs. The free trades are great when you are dollar cost averaging.
- Commission-Free ETFs — Large selection of its own funds are available commission free and with no minimums.
- Large Selection of Investment Options — Can purchase brokered CDs, Treasury bonds and corporate bonds through Fidelity.
- Credit Options Plus Cashback — If you own a Fidelity Visa credit card, your cash back is directly deposited into an account.
- Bill Payment — You can pay bills using your trading account or Fidelity's banking service.
- No Minimums — Fidelity has slashed its investment minimums for personal trading accounts to $0.
- Lacks Functionality — If you are an active trader (I am not), the Active Trader Pro platform may not be best suited for you.
- High Margin Rates — While Fidelity states its margin rates are low, other brokerage houses like Interactive Brokers have much lower rates.
Fidelity has certainly made some changes that should entice investors of all experience levels and with a huge amount of cash to invest.
Unlike Robinhood, Fidelity still isn’t totally free – you’ll need to pay the low price of $4.95 per U.S. equity trade. But Fidelity offers a plethora of research products and tools that you simply won’t find from its fee-free competitors. We think Fidelity is certainly worth the (albeit small) price.
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