Fidelity Investments Review: How it Fares in Comparison to Others

Dec 30, 2020 09:30 PM ET
Fidelity Investments Review: How it Fares in Comparison to Others

Fidelity keeps evolving as a force to be reckoned with in the online brokerage industry. Over the years, it has made some improvements to the vital components of its platform and also concentrated on reducing the investment cost for traders. In October 2019, the firm jumped the bandwagon to reduce base options and equity commissions to zero, but it's committed to offering high-quality education and research material to its customers. 

Fidelity Investments offers $0 trades and serves more than 32 million clients worldwide. It provides sophisticated trading tools and a mobile app with a simple user interface. Furthermore, it carries out some of the best research in the industry and offers retirement services as well. 

What is Fidelity Investments best for?

Fidelity Investments has a functional platform that can be navigated quite easily and manages to achieve the perfect balance between ease of usage for beginners as well as advanced tools. It offers several account types and products, thus addressing all kinds of traders, institutional or independent clients, and managers.

No matter what kind of investment services you need, the account types cover all of them. The fees you need to pay are quite reasonable considering the services you get. The education section of this platform is one of the best things about it and it gives other brokers a run for their money in this department.

If you are an active trader, Fidelity investments is a good brokerage firm for you. You can find abundant resources in the training center that will help you learn about options trading, technical analysis, and financial markets in general. 

The mobile app for this online brokerage firm is optimized for users and includes all the features of the desktop software. The research and education options available let you save time while finding out about the market and assets.

Where does Fidelity Investments excel over others?

There are four large areas where Fidelity Investments excels over its competitors. Let us look at each one and see why this company excels in these spheres.

Account Fees

In case you wish to keep your brokerage fee to a minimum, Fidelity is the best option for you. You won’t get charged with any transfer-out, activity, or account fees. Some of the uncommon categories like reorganization and IRA closeout require no fees either. 

If you are paying bills using your account, you don’t need to pay the usual bank fees, which include charges for ATM and stop-payment. This makes this firm a pocket-friendly option for all investors. Moreover, there is no account minimum so you can easily start trading all kinds of financial securities on this platform.

Mutual Funds

With Fidelity, you get access to 3500 mutual funds without having to pay a fee for the transaction. So, you can enter and exit the fund without paying a penny, although you still have to bear the costs for the fund's expense ratio. It is up there with the best brokerage firms when it comes to the sheer number of funds offered.

Furthermore, Fidelity Investments offers you mutual funds where you don’t need to pay for the expense ratio. The brokerage firm is unique in this aspect, and you can get mutual funds for free without being one of their customers. This is a great advantage as you can own a mutual fund without the yearly expense ratio and transaction fee.

Research

Fidelity shines in the research department and provides stock research information for some of the top providers in the market. It also offers ideas for trading in options as well as ETF research from reliable sources.

At first, you might find the sheer number of research firms to be a bit overwhelming, but you can select one based on your style of investing after taking a small quiz. There is also a scorecard that tells you how accurate the recommendations from the service providers are. 

Fidelity Investments Research

Customer Service

With Fidelity, you can get access to seminars and personal guidance at various branch locations. The company has a virtual assistant that you can use to contact the customer service representatives. It is even easier with a mobile app that connects you to customer service with the touch of a single button.

Where does it disappoint?

The disadvantages of Fidelity Investments are as follows:

  • Complicated Product Structure: Some of the company products are not structured properly and this creates some uncertainty because traders face difficulties comprehending what the firm is offering. 

  • Opaque Pricing Information: Although Fidelity Investments doesn't charge any account fees, the pricing details are mentioned in a small font, which is somewhat inconvenient. It is almost as if an effort has been made to hide the prices.

Costs and fees

There are no charges for trading in ETFs and online equities. The per-contract fee for options trading is $0.65. For every principal amount of $1000, there is a fee for selling options, ranging from $0.1 to $0.03. 

If your balance is more than a million dollars, you can get a low margin rate of 5%, but otherwise, it is more than 8%, which is a bit high compared to others.

Who Fidelity Investments is for?

Fidelity Investments is the perfect online brokerage for people who wish to gain knowledge by accessing research data. If you have been an investor for many years and plan on trading in high volumes, this online brokerage would be good for you.

Investment centers of the company are spread throughout the USA and if you live near one of these places, then Fidelity would be an excellent option for you. 

Fidelity Investments map

Final Words

Although Fidelity has something for all kinds of investors, you need to invest some time searching for the right feature required to make a certain decision regarding your trade. The user interface is quite terrific and even large-sized trades can be executed effortlessly through Fidelity.


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