Fidelity Investments Review – A Well-Rounded Brokerage
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Fast Facts
Availability:
In nine North American, Europe, Asia, and Australian countries.
Minimum balance:
$0
Account fees:
$0
Stock trade commission
$0
Investment products:
Wide range of investment options
USP:
Human customer service
Choosing a brokerage can be an overwhelming task because of the variety of choices available, but if you're looking to trade stocks, you'll need to sign up with online brokers. Investing is a tried-and-tested method to accumulate wealth if you have a long investment horizon. While most brokerages have moved to a zero-commission model, each has different usability and features. Still, some of the best brokerages are hallmarks of helpful resources, easy-to-navigate platforms, and automated portfolio services.
One such firm is Fidelity Investments.
Related: Best Brokerages for Beginners
Jump To
What is Fidelity Investments?
Even if you have minuscule financial industry knowledge, chances are you've likely heard of Fidelity. Based in Massachusetts, it provides financial planning, advice, and educational resources investors need, such as retirement planning, wealth management, brokerage services, college savings, and much more. There aren't any pesky account fees or minimums to open a retail brokerage account.
And Fidelity is big ... like really big! About 50 million individual investors use its services, with $13.7 trillion in assets under administration. The company's footprint is spread across nine North American, Europe, Asia, and Australian countries.
The company also has a robo-advisor called Fidelity Go. Depending on how you answer a few questions, the robo-advisor will present you with strategies after digesting all the information you've provided, like your investment goals and risk tolerance. After you've selected, the robo-advisor keeps track of how your investment is performing and makes adjustments accordingly.
Fidelity is also known for its zero-fee Fidelity index funds. It has a solid section of mutual funds that carry no transaction fees, in addition to Fidelity funds and funds from other large providers. The company doesn't have a minimum investment requirement either.
Its mobile app is available for Android and Apple devices.
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Fidelity Investments features
Something for everyone
Fidelity has a wide range of account types. In addition to the typical joint and individual taxable brokerage accounts and tax-advantaged retirement accounts, Fidelity offers all sorts of accounts for individuals, families, businesses, and managed accounts. Its investment products include:
- Mutual funds
- Retirement and IRAs (rollover, traditional, Roth, inherited, SIMPLE, SEP)
- Trading
- Fixed-income bonds and CDs
- ETFs
- Options
- Sector investing
- Cash management account and credit cards
- Managed accounts
- 529 college savings
- Health savings account (HSA)
- Annuities
- Life insurance and long-term care
Fidelity also has every account type under the sun, including individual and joint accounts, business accounts, health savings accounts, and 529 education savings plans.
Fractional shares
Don't have enough to buy a whole share of a blue-chip company? You can buy a slice of the pie along with others. Fidelity's fractional share purchase program is called Stocks by the Slice, which lets you buy fractional shares for as little as $1. You can purchase fractional shares in thousands of stocks and ETFs (without commissions) and reinvest any dividend into fractional shares. However, there's no batch order functionality, so you must enter each order separately.
Related: Best Fractional Share Brokerages
Powerful platforms
Active Trader Pro is Fidelity's desktop platform and is only offered to customers who trade at least 36 times within 12 months. The platform can trade stocks, bonds, mutual funds, forex, options, and ETFs and is a one-stop shop for new and experienced traders, featuring alerts, a portfolio builder, heat mapping, watch lists, screeners, and calculators. Real-time analytics and trading ideas are also packaged in.
Some research tools are offered exclusively to high-volume traders. Specific charting tools, for example, are restricted to people who place more than 120 trades per year. And the Wealth-Lab Pro feature is available only if you have at least $25,000 in assets and make at least 120 trades per year.
Resources
With a Fidelity account, you can access a vast library of interactive educational resources through webinars, articles, videos, and courses. Regardless of your learning style and how far you are into your investment journey, you will find the training you need to be a successful investor. In addition to this learning center, you'll also have investment research by more than 20 independent third-party firms covering thousands of stocks. You can also screen strategies for researching equities, options, and ETFs and filter results by third-party experts.
Customer support
Most businesses do not make a human customer support rep available, but that's not the case with Fidelity. You can talk to an actual human if you've run into a snag or have a question. And if you're using Fidelity Premium Services or Fidelity Private Client, you'll have a dedicated customer support line with even faster response times.
How much does Fidelity Investments cost?
Fidelity is very transparent with its fees. It doesn't charge account fees, and there are no minimums to open a retail brokerage account, including IRAs. That said, there are a few online trading fees to consider.
Stocks and options | ETFs | Bonds and CDs | Mutual funds |
$0 per stock or options trade (plus $0 per contract on options trade) | $0 per trade for all ETFs | $1 per bond or CD in secondary trading and free for US Treasuries traded online | $0 for Fidelity funds and hundreds of other funds with no transaction fees |
The company offers commission-free trades for U.S. equity trades and exchange-traded funds (ETFs). An options trading regulatory fee of between $0.03 and $0.05 per contract applies to both buy and sell transactions. In addition, sell orders are subject to an activity assessment fee ranging from $0.01 to $0.03 per $1,000 of principal. The trading platform also provides this fee comparison on its website.
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- 30-Day Membership-Fee-Back Guarantee
- Joy Wallet Reader Deal: The Motley Fool is offering 50% off its top stock-picking service for new members (Limited Time)
Who should or shouldn't use Fidelity Investments
There's no reason for anyone not to use Fidelity. Fidelity offers plenty of options whether you're a beginner, intermediate, or experienced investor.
Still, a few shortcomings may be a deal breaker for some. For example, Fidelity doesn't offer futures, commodities, or crypto trading, and its web-based platform doesn't have streaming news or data. It also doesn't have the broadest selection of securities like a few of its rivals.
Pros and cons
Pros
- Suitable for fee-conscious investors.
- Robust research and screeners.
- Top-notch customer support.
Cons
- High broker-assisted trade fee.
- You can't trade crypto or futures.
- Simplistic portfolio analysis tool.
Fidelity Investments vs. its competitors
Brokerage | Minimum balance | Cost per stock trade | Account fees |
Fidelity Investments | $0 | $0 | None |
Vanguard | $0 | $0 | $25 account fee for accounts with less than $10,000 in Vanguard funds. Can be waived under certain conditions |
Charles Schwab | $0 | $0 | $50 full transfer out fee, $0 for partial |
Merrill Edge | $0 | $0 | $0 full transfer fee, $49.95 closeout fees on retirement accounts |
Vanguard
Vanguard lets you invest in stocks, commission-free ETFs, options, bonds, and more than 3,000 no-transaction-fee mutual funds. There isn't a minimum balance requirement, and the company doesn't charge a cost per stock trade. Vanguard's funds have low expense ratios, and fees that brokerages may charge that'll ultimately dent your returns. The company also has education and planning tools like articles, podcasts, and videos to help clients navigate the investing landscape. But if you're an active trader executing trades all the time, Vanguard may not be your broker.
Charles Schwab
Like Vanguard, Charles Schwab doesn't mandate a minimum balance, and it lets you invest in Stocks, commission-free ETFs, bonds, options, more than 4,000 no-fee mutual funds, and futures. But Schwab does charge $0.65 per contract for options. There are also several accounts on offer: individual, joint, IRAs, education savings accounts, and 529 education accounts, as well as business accounts like SEP IRA and solo 401(k). Its Stock Slices feature allows you to scoop up fractional shares in otherwise pricey companies for as little as $5. You'll also have access to Morningstar and Credit Suisse market commentary and earnings news from various credible sources.
Merrill Edge
Individual and joint accounts, traditional and Roth IRAs, SIMPLE IRA, SEP IRA, and solo 401(k) are some of the account types offered by Merrill Edge. It lets you invest in stocks, commission-free ETFs, options, and over 800 no-transaction-fee mutual funds and bonds. A feature called Portfolio Story provides insights into the performance of your portfolio. The stock broker also provides research on stocks, ETFs, and mutual funds, integrating research from Morningstar and Lipper. It also provides customer support round the clock.
FAQs
Does Fidelity charge account fees?
No, it doesn't.
Does Fidelity offer fractional shares?
Yes, you can buy fractional shares for as little as $1.
Does Fidelity have any bonus offers for new clients?
The company doesn't currently have any bonus offers.
How do I know which Fidelity account I should choose?
Fidelity groups accounts by your goal and provides a short description of the account type's purpose. This should help you make a decision.
Use Motley Fool's Stock Advisor To Invest
- Over 100 Stock Picks with 100%+ Returns
- Averaged Stock Pick Return over 593% (vs. 165% for the S&P)
- 2 New Stock Picks Every Month
- Investment Community With 700,000+ Loyal Members
- 30-Day Membership-Fee-Back Guarantee
- Joy Wallet Reader Deal: The Motley Fool is offering 50% off its top stock-picking service for new members (Limited Time)
Is Fidelity legit?
100%, yes. Fidelity has been in business for over 70 years and has a successful track record. It is suitable for investors with all levels of experience. It is investor-friendly, does everything at a high level, and offers fee-free mutual funds and a ton of research and educational resources. Whether you're a new investor or a pro, with fee-free mutual funds, the ability to buy fractional shares, and top-notch customer support, Fidelity makes a great choice as your broker.
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Writer
Jasir Jawaid is Joy Wallet's Assistant Editor. He has more than 13 years of experience as a journalist covering Wall Street, equities, financial policy and regulation, and cryptocurrency and blockchain.
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