I have been a Fidelity (formally known as Fidelity Investments) customer for over five years now and thought it’s time to give a review for my readers. Fidelity opened its doors in 1946, and it is literally a one-stop shopping for all of your financial services. Fidelity offers a large amount of mutual funds, provides fund distribution, discount brokerage services, retirement services, wealth management, securities execution and clearance, life insurance, investment advice services and a number of other services.
According to Wikipedia, Fidelity serves more than 23 million accounts through its retail investors and institutional investors, with more than 400 different funds, and is the second largest US mutual fund company after The Vanguard Group, with $1.24 trillion of assets under management as of July 2010. This review focuses on the retail investor side of their business since I’m not an institutional investor.
I originally had most of my accounts with E*TRADE (see E*TRADE review), and was a customer of theirs since 1997. While I was not unhappy with their service, I was concerned about their financial viability in 2007.
To start the transfer process I went down to my local Fidelity branch. One of their service representatives was more than happy to help me transfer my accounts. It was a simple process, and within a week all accounts were transferred. I, unfortunately, lost all of the financial history I had with E*TRADE (i.e. dates stocks were bought), but this isn’t an issue with Fidelity per se. Fortunately, I kept all of my financial records within Quicken 2016, and this wasn’t a concern of mine. For others though, make sure you record the purchase date of all equities before transferring to Fidelity (or to any other brokerage house for that matter).
Fidelity Investments Features
|Minimum Deposit||$2,500 (IRAs $0)|
|Options Trades||$7.95 + $0.75/contract|
|Mutual Funds||$0 – $79.95|
|Accounts Available||Traditional IRA, Roth IRA, SEP IRA, Solo 401(k), Simple IRA, 401(k) Plan, Custodial, Coverdell, 529, Trust, Estate, Individual, and Joint|
|Mobile App||Yes — Apple iOS and Google Android|
|Customer Service||Phone, Live Chat, and Branch Office|
|Promotions||See Fidelity Investments Promotions Page|
I picked Fidelity over the many other discount brokerage houses because:
- The $7.95 per trade for all equity trades.
- The 65 commission free ETFs.
- A broad range of investment choices, including stocks, ETFs, bonds, and options, more than 4,700 Fidelity and non-Fidelity mutual funds.
- The Fidelity Investment Rewards Visa Card. I’m able to deposit my cash back rewards directly into a brokerage account.
Fidelity has all of the major features the other investment houses offer. I’m only going to highlight the features unique to Fidelity.
Fidelity Full View®
This feature is available to all Fidelity customers. Similar to Intuit’s Mint.com, you can use their Full View® feature to include third party accounts within Fidelity. They currently support over 9,000 accounts and are using Yodlee to do the integration. For me, personally, I would rather use Quicken or Mint to do this feature. Fidelity’s user interface, while not bad, in my opinion, is somewhat clunky and unpolished in a few areas.
Fidelity Active Trader Pro™
I am an Apple Macintosh user, and their active trader platform isn’t directly compatible. To use their service on a Mac I must setup a VMWare Fusion instance. While this is to be expected, it is somewhat of a pain. Unfortunately, most financial applications are still marketed towards Microsoft Windows. Once installed, the application 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
For more information on the technical and financial requirements visit Fidelity’s web site.
Fidelity Mobile App for Apple iPad
Stay connected to the markets while on the go. The Apple iPad app is perfect to use with your Fidelity account. I’ve used the iPhone app before and did not consider it that useful for other than a quick glance at my portfolio. The iPad version offers more functionality and uses the larger screen effectively. The app has 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
For more information about Fidelity’s Mobile Apps for the iPhone® and iPod touch®, visit their web site.
- Cheap Trades - Great pricing on trades, and free trades on select ETFs. The free trades are great when you are dollar cost averaging.
- Mobile Access - Fidelity's iPad app is great and much better than the iPhone version
- Commission Free ETFs - Large selection of their own funds available commission free
- Large Selection of Investment Options - Can purchase brokered CDs and corporate bonds
- Credit Options Plus Cashback - If you own a Fidelity Visa credit card your cash back is directly deposited into an account.
- Lacks Functionality - If you are an active trader (I am not), their Active Trader Pro platform may not be best suited for you.
- High Margin Rates - While they state their margin rates are low (their lowest is 3.75%), other brokerage houses like Interactive Brokers have much lower rates (0.95% APY)
- Vanguard Funds Charge Fee - Vanguard purchases are charged at their regular commission rates
In the five years I’ve been a customer, I’ve had to contact their customer service line a few times. Every time I’ve called I’ve gotten quick responses and was able to resolve my issues quickly. Here is my summary of what I think of Fidelity:
The last issue isn’t a Fidelity issue as all other brokerage houses charge a commission when purchasing Vanguard funds. For the most part, the only way around this is opening an account directly with Vanguard. Bottom line with Fidelity, it’s hard to find a brokerage house that offers all of the features, decent customer service, and a great price.