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Fidelity is one of the largest financial services corporations in the world. Currently, it manages $3.3 trillion in assets for millions of customers across the globe through the various solutions they offer.
Although Fidelity is often known for its vast selection of mutual funds, the firm also offers a competitive brokerage service that features zero-commission trades for an ample number of instruments and asset classes. They also provide other services, including wealth management, insurance, and financial advisory.
In the following review, we will focus on Fidelity’s brokerage service. We cover the firm’s robo-advisor feature in a separate entry, as the list of solutions the company has made available to its clients is long enough to deserve an individual assessment.
Quick Summary: Fidelity is one of the largest brokerages in the United States. Individuals can trade a wide variety of instruments including stocks, exchange-traded funds (ETFs), bonds, mutual funds, and options. The company also offers competitive margin rates.
What Is Fidelity?
Fidelity is a US-based corporation headquartered in Boston, Massachusetts. The firm was founded in 1946 by Edward C. Johnson and it is currently headed by his daughter Abigail Johnson.
The company specializes in providing a wide range of financial services, including asset management, financial advisory, retirement planning, wealth management, and clearance and execution solutions.
Meanwhile, the firm also operates a vast portfolio of mutual funds and exchange-traded funds (ETF), managed by financial professionals while offering a top-notch brokerage service for individuals seeking to build their portfolios without professional assistance.
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How Does Fidelity Work?
Fidelity’s brokerage services provide zero-commission trades for multiple US and foreign-listed securities. The company is part of an industry-wide movement that effectively slashed trading fees to reduce the burden that retail investors faced when trying to manage their investments by themselves.
Through the company’s platform, individuals can trade a wide variety of instruments including stocks, exchange-traded funds (ETFs), bonds, mutual funds, and options. The company also offers a competitive margin rate.
Additionally, Fidelity has recently introduced fractional shares for more than 7,000 US-listed stocks and ETFs – known as SlicesSM – to help retail investors build diversified portfolios composed of multiple stocks regardless of their listing price.
By using the firm’s web-based, desktop, or mobile trading platform, investors can follow their investment strategies while enjoying high-speed order executions and tons of research and educational materials to enrich their trading and investment journey.
Investing Account Types
Fidelity is an all-in-one brokerage firm that offers virtually all the types of accounts available for both individuals and corporations in the United States and other countries.
The following is a list of the type of accounts currently supported by this provider:
- Taxable brokerage account (individual or joint)
- Taxable brokerage and cash management account
- Fidelity Account® for businesses
- Individual retirement accounts (IRAs): traditional, Roth, Roth for kids, rollover, and SEP-IRA
- Self-employed 401(k)
- 401(k) plan for small businesses
- Fidelity Go® account
- Fidelity® personalized planning & advice
- Portfolio Advisory Services account
- 529 account
- Custodial account
- Health savings account (HSA)
- Other more specialized types of accounts
Opening an Account
Opening an account with Fidelity is very easy and the process starts by clicking the “OPEN AN ACCOUNT” button at the top of the firm’s official website.
Once you click that link, you will be prompted to select the type of account you will be opening and this will direct you to a sign-up form where you will be asked to enter personal and financial information to complete the process.
Finally, the user will be prompted to make a deposit to the account. Although Fidelity does not require a minimum deposit to complete the process, some of its services such as Level 2, higher trading features, and access to marginable trades will only be granted once the user deposits $2,000 or more.
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Fidelity comes with some of the best features we could expect for a large broker, including options trading to managed portfolios.
|Stock & ETF Fees||$0|
|Options Fees||$0 per trade + ($0.65 per contract)|
|Mutual Funds Fees||$0 per trade (Fidelity funds) $49.95 per trade (Non-Fidelity funds)|
|Investment Types||Stocks, ETFs, Options, Mutual Funds, and Bonds|
|Account Types||Individual Taxable, Joint, Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, SIMPLE IRA, Solo 401(k), Custodial, Coverdell and Trust|
|Platform||Web-based, Mobile (iOS / Android) and WatchOS|
|Account Funding||Bank transfer|
|Support||Branch Office, Live Chat, Phone and Email|
Commission-Free Trading (ETFs and Stocks)
Similar to most US-based brokerage firms, Fidelity has slashed its commissions and fees for US-listed stocks and ETFs.
Interestingly, this scheme applies to the purchase of US Treasury auctions and secondary issues, Fidelity funds, and options – although a $0.65 per contract fee does apply for that particular instrument.
Additionally, fractional shares can also be bought and sold for free, which saves retail investors with a small account balance from the impact of fees and commissions.
Fidelity account holders can actively trade options, which are an instrument that gives you the right, without obliging you, to buy or sell securities at a certain price once the expiration date of the instrument is reached.
These instruments can be traded without incurring a commission, although a $0.65 fee per contract applies both when the contract is opened and closed.
Fidelity offers multiple features that support option traders, including a Strategy Guide, a tool known as OptionsPlay® 9through which traders can receive tips and insights about potential opportunities on the options market), and many powerful educational tools to help those who are just getting started in trading these complex instruments.
Mutual Funds Investing
Mutual funds are perhaps one of Fidelity’s specialties as the company is known as a titan in this particular segment of the financial services industry, having spent more than 70 years in the space.
Fidelity clients can trade and invest in these instruments without incurring a commission and the company currently offers more than 10,000 different funds – provided by the firm and third-parties – covering a wide range of themes, sectors, and indexes.
Fixed-Income Securities (Bonds and CDs)
Fixed-income securities such as bonds, preferred stocks, and certificates of deposit (CDs) can be traded with this provider either by buying a fund that holds a basket of these instruments or by purchasing individual securities.
The selection of available instruments includes individual bonds, bond funds, bond ETFs, certificates of deposits (CDs), money market funds, deferred annuities, and structured products.
Fidelity’s inventory of fixed-income securities is quite extensive, which makes the firm a great provider for conservative investors seeking to build income portfolios.
Retirement & IRA Accounts
Fidelity’s retirement solutions include both self-directed retirement portfolios and managed portfolios built by a robo-advisor or one of the firm’s financial professionals through its advisory programs.
Individuals have the possibility of either opening a new individual retirement account with the firm or rolling over their existing one.
Fidelity supports a wide selection of retirement accounts going from traditional ones to others that aim to fulfill a specific need such as a Roth IRA for kids.
Additionally, Fidelity has designed a couple of programs that aim to help businesses in designing their retirement solutions for employees as is the case with the firm’s 401(k) for small businesses.
Fractional shares entitle the holder to a portion of a stock and they aim to facilitate the process of building a broadly-diversified portfolio for retail investors with a small budget.
Fidelity’s fractional shares are known as Stocks by the Slice™ and they are available for more than 7,000 US-listed stocks and exchange-traded funds (ETFs). These instruments can be traded for free and investors can buy as little as $1 of any of the stocks supported by Fidelity’s platform.
Sector investing is possible through the vast selection of exchange-traded funds (ETFs) and mutual funds that users can buy through Fidelity’s platform, which allow them to expose their portfolio sectors like communications services, materials, utilities, real estate, and many others, in line with the Global Industry Classification Standard (GICS).
This feature is a particularly attractive one for investors seeking to diversify their portfolios by following advanced investment methodologies such as those that track the different phases of the economic cycle.
For this purpose, Fidelity provides research materials and tools to help investors in assessing the performance and prospects of each sector while allowing them to invest in each through the firm’s funds or others provided by third parties.
Fidelity Managed Accounts
Although this review primarily focuses on Fidelity’s brokerage services for self-directed investors and traders, in this section, we will provide a summary of the investment management solutions provided by the company to those who prefer to hand over their investments to seasoned professionals.
Fidelity Go is the firm’s automated investing solution, which relies on algorithms and time-tested investment methodologies to build portfolios quickly based on the investor’s financial goals, risk tolerance, and other factors.
No minimum investment is required to enjoy the benefits of this program and users can rely on it to build a portfolio for one single financial goal. In this case, the minimum fee to be paid will be $0 for accounts with less than $10,000 in balance while the amount paid goes up to $36 per year for accounts between $10,000 and $49,999 and 0.35% per year for accounts with more than $50,000.
Meanwhile, for those who enroll in Fidelity’s hybrid digital advisory solution – which combines the robo-advisor with human advice – investors will be charged a 0.5% annual advisory fee on the funds held within the portfolio and a minimum investment of $25,000 will be required.
Fidelity Wealth Services
Fidelity Wealth Services is an advanced financial advisory program designed to help individuals who are pursuing multiple financial goals at once. It provides them with a digital platform to keep track of their progress while also giving them access to assistance from a team of qualified financial planning professionals.
To be eligible for this program, investors are required to commit a minimum investment of $50,000.
The cost of this program goes from 0.5% to 1.5% of the portfolio’s balance for accounts with less than $2 million while the fees are slashed to a lower range of 0.2% to 1.04% once the portfolio goes above that threshold.
It is important to note that to have access to a dedicated financial advisor the investor’s account must have a minimum balance of $250,000. Otherwise, the client will be served by different advisors depending on their availability.
Fidelity Strategic Disciplines
This program focuses on building portfolios composed of a single asset class – i.e. stocks or bonds – as a complement to the user’s main portfolio.
A trained financial advisor will assist the investor in building the portfolio and the design will often follow a particular goal or strategy such as generating dividend income or capital gains over time.
The minimum investment required to be eligible for this program is $100,000.
Fidelity Spire App
Fidelity Spire™ is the name of Fidelity’s mobile investing and trading app through which investors can easily manage their portfolios on the go.
The app is available for both iOS and Android devices and the company has designed a demo account consisting of a simulated trading account with $100,000 in virtual cash that lets the user test drive the app before installing it.
Spire’s Android version has a 3-star rating on Google’s Play Store and a 3.9-star rating on Apple’s App Store.
Fidelity Active Trading Pro
Active Trading Pro® is the desktop trading platform offered by Fidelity, designed to provide a wide range of technical tools for both beginner and experienced traders.
This desktop version is available for both Windows and Mac devices and it features an incredible charting tool, research materials on the securities offered by the firm, and real-time analytics and alerts that can help you in staying on top of what is happening in the financial markets.
Users can employ multiple filters to identify potential investing or trading opportunities based on the current status of certain indicators. They can also quickly execute their trades during the live session or extended hours.
Additionally, investors can browse through multiple account reports to keep track of their investment and portfolio performance. They can also customize the platform’s workspace to accommodate it to their specific needs.
Education & Research Tools
Fidelity’s platform comes with the added bonus of granting users access to a vast universe of research materials, analyst reports, and insightful articles from top professionals across multiple industries to help investors and traders in making informed decisions.
Among the most notorious tools, investors can find stock and ETF screeners through which they can short-list available instruments based on different criteria. The firm also offers a feature called the “Stock Dashboard”, which summarizes multiple data for a single instrument including charts, social media trends, a Social Sentiment Score, and independent research materials.
Aside from that, Fidelity rates the different instruments offered within its platform by using data from Refinitiv, generating a score that qualifies the instrument based on its potential (Bearish, Bullish, or Neutral).
Finally, for those seeking to enrich their knowledge in the investing field, Fidelity has a Learning Center where investors can find an ample selection of materials including blogs, articles, webinars (both live and recorded), and videos explaining a multitude of topics related to personal finance, retirement, taxation, estate planning, and college planning, among others.
Fidelity Pricing & Fees
Fidelity does not charge any fees for trading US-listed stocks or exchange-traded funds (ETFs).
Meanwhile, for other instruments such as options, Fidelity charges no commissions either. However, a $0.65 fee per options contract applies both when the position is opened and closed.
On the other hand, the cost of trading fixed-income securities such as bonds and CDs with this provider is $1 per instrument while US treasures can be traded for free as long as the trade is placed online.
Interestingly, Fidelity’s index mutual funds are available with a zero expense ratio as is the case of the Fidelity® ZERO Total Market Index Fund and the Fidelity® ZERO Large Cap Index Fund.
No minimum amount is required to open a brokerage account with Fidelity or to invest in one of these funds.
As for other funds, Fidelity does not charge trading fees if the fund is held for longer than 60 days. Meanwhile, if the holding period is shorter than that, the user will have to pay a $49.95 charge per transaction.
Fidelity Investments is a heavily regulated US-based financial services company. The firm’s bank accounts are covered by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per account. Its investment accounts are covered by the Securities Investor Protection Corporation (SIPC) for up to $500,000 in securities including $250,000 in cash.
Additionally, the company uses multiple security features such as two-factor authentication, instant money transfer lock, SMS security alerts, and secured calls to verify the identity of the user when transactions are made while also protecting the account from any kind of unauthorized access.
Finally, Fidelity offers a free feature called FidSafe® for storing important financial and legal documents securely in the cloud.
- Well-reputed brokerage firm with nearly 75 years of positive track record in the global financial industry.
- Over $3.3 trillion in assets under management and millions of customers in the United States and abroad.
- The firm is heavily regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA)
- Fidelity provides zero-commission trades on US-listed stocks and exchange-traded funds (ETFs) along with the possibility of trading options cheaply.
- The firm offers a wide range of services for both self-directed and passive investors as is the case of its Fidelity Go® robo-advisor.
- Users can open virtually all types of accounts available on the US market for both individuals and businesses.
- The company’s desktop trading platform is fairly advanced and incorporates most of the features that an experienced trader or investor will need to conduct his or her operations.
- Fidelity has introduced fractional shares to respond to the need of retail investors with a small account balance, allowing them to purchase a fraction of more than 7,000 different stocks and ETFs without paying a commission.
- Fidelity’s index funds offer a zero expense ratio. The amount saved on these expenses can add up over time while increasing the percentage of return obtained by long-term investors.
- The firm’s mobile app has not received very good comments from its users.
- Trading third-party mutual funds can be quite expensive ($49.95 if held for less than 60 days).
- Trading international stocks can also be expensive compared to other providers. For example, trading stocks in the United Kingdom generates a £9 commission if the trade is executed online while buying securities in Australia can generate an AUD 32 fee per trade aside from certain country-specific charges.
Make sure you check out other brokers before you make your financial decision. It all comes down to your personal needs.
Robinhood offers virtually the same services as Fidelity when it comes to self-directed trading but the firm charges a lower margin rate of 5%. Meanwhile, Robinhood offers certain competitive features such as instant deposits, which clears any money deposited into the account immediately for investors.
That said, Robinhood lacks an automated passive investing feature such as the Fidelity Go® program.
Additionally, Fidelity’s Active Trader Pro platform is much more advanced in terms of the research materials it provides and the charting tools supported by the system.
Check out our full Robinhood review to learn more.
TD Ameritrade offers almost the same services as Fidelity as well, including a robo-advisor called the Essential Portfolio. That said, TD Ameritrade lags behind Fidelity in catering for small-budget investors as the firm has not yet introduced fractional shares to its portfolio of available solutions.
However, this competitor does allow traders to make transactions with forex pairs and futures, both of which are instruments that Fidelity doesn’t currently support.
Read our full TD Ameritrade review to learn more.
Who Should Sign up for Fidelity Investments and Who Should Skip It?
Fidelity Investments is a one-stop-shop for all things investing. Users can enjoy the firm’s brokerage solutions along with its financial advisory features; the latter is for investors that prefer to hand over the wheels to seasoned professionals.
This broker, however, is a more suitable choice for people who would like to stick with US-listed securities, as buying and selling foreign instruments can be quite expensive.
Additionally, Fidelity doesn’t currently support certain instruments such as futures, cryptocurrencies, and commodities.
Fidelity Investment FAQ
Here are some of the most frequently asked questions about Fidelity Investments on the internet.
Is Fidelity a Good Company?
Fidelity is a highly-reputed financial services provider based in the United States with more than 75 years in the industry.
The company oversees more than $3 trillion in assets for its clients and it is heavily regulated by top-tier institutions in the United States and other latitudes, which makes the firm a top-notch broker.
Is Fidelity Good for Beginners?
Fidelity’s zero-commission trading service for US-listed instruments is very attractive for retail investors as they can build a portfolio cheaply.
Additionally, the introduction of fractional shares has increased Fidelity’s appeal to this growing audience of small-budget investors as they can now incorporate high-priced stocks without committing a big portion of their funds to maintain a proper level of portfolio diversification.
Is Fidelity Safe?
Fidelity Investments is regulated by the SEC and FINRA and its bank and investment accounts enjoy coverage from the FDIC and SIPC in the United States.
Additionally, the firm has introduced multiple features to protect users’ accounts from being accessed by third parties without their authorization.
Does Fidelity Have a Monthly Fee?
There are no monthly fees that investors have to pay for enjoying the firm’s brokerage services. On the other hand, certain monthly fees apply to Fidelity’s investment management solutions such as Fidelity Go® and others.
In A Nutshell
- Account Minimum: $0
- Fees: Zero-commission stock, ETF and per-leg options trading (+$0.65 per contract)
- Promotion: None at this time
Fidelity Investments is an incredible provider of brokerage and financial advisory services in the United States, as the firm covers virtually all of investors’ needs through its wide range of solutions.
Despite the small limitations of its platform – which doesn’t currently support forex or futures trading – its complete set of features and solutions should be enough to serve the needs of most retail investors while certain features like fractional shares and zero-expense index funds are very attractive for long-term investors regardless of their budget.
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Alejandro is a financial writer with 7 years of experience in financial management and financial analysis. He writes technical content about economics, finance, investments, and real estate and has also assisted financial businesses in building their digital marketing strategy. His favorite topics are value investing and financial analysis.