In this Fidelity Investments review, every aspect of Fidelity’s services have been researched to provide you with an unbiased account of a dominant and full-service broker-dealer serving all classes of investors.
Read more to find out if Fidelity is suitable for your investing requirements.
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Who is Fidelity?
The company was founded as Fidelity Management & Research (FMR) by Edward C. Johnson II in 1946.
Fidelity has more than 50,000 employees spread across the United States and 9 other countries.
Fidelity has a reputation for innovation in offering new financial products, for instance they are the first firm to offer a Bitcoin centered ETF which will give access to 40 million investors who probably did not have a way to buy Cryptocurrencies.
This is just another example of Fidelity innovating in financial products. In the 1980’s, they offered a commercial mutual funds. In 1984, they offered computerized stock trading. These investments have made Fidelity a leader in financial engineering and in revenues with more than $20 billion in 2019.
Fidelity has 40 million individual investors
- 11.8 AUM (Assets Under Management)
- 4.5 Trillion in Discretionary Assets
- 2.8 Million Trades per Day
Who owns Fidelity and Fidelity’s funds?
Fidelity was founded by the Johnson family, whom individually and through various trusts, owns stock representing a 49% voting interest in Fidelity. They have signed agreements pledging to vote all their shares as a bloc.
Abigail Johnson was once the largest single shareholder with about 25% ownership, but in October 2005, it was reported that she had sold a “significant” portion of her shares to family trusts, and that there were doubts as to whether she was still in line to succeed her father.
That doubt disappeared when Abigail was named CEO in 2014, and chairman in 2016.
- Who is Fidelity?
- Fidelity Investments Ratings
- Fidelity’s Investment Philosophy
- Fidelity Investments Product range
- Fidelity Investments Customer service
- Fidelity Investments Fees
- Fidelity Investments Special Offers
- Opening a Fidelity Investments account
- How easy is it to withdraw funds?
- Fidelity Investments Safety
- Fidelity Investments Education
- Common questions I get asked about Fidelity Investments
- Final verdict: is Fidelity Investments any good?
- Fidelity Investments Frequently Asked Questions (FAQs)
- Fidelity Investments Customer reviews
Fidelity Investments Ratings
Overall
Pros
- 322 mutual funds and ETFs with no transaction fee and no minimum requirements
- With “à la carte” pricing you only pay for the features you use.
- Excellent mobile apps, research and educational resources.
Cons
- High broker-assisted trading fees
- Options fees are higher than competitors
- No access to futures, commodities, or crypto trading
Fidelity’s Investment Philosophy
Fidelity offers brokerage accounts and services to retail investors, including for personal and retirement investing, and cash management services (such as bill pay, checkwriting, and margin lending).
Fidelity accounts allow you to invest in mutual funds, exchange-traded funds (“ETFs”), stocks, bonds, college savings plans and insurance products, among others. There is no minimum investment to open an account; there are minimums to purchase some types of investments.
Fidelity does have an incentive to direct you to use Fidelity products, as they earn commissions on certain products when those are used. It is important to understand this bias as you trade with Fidelity. Fidelity is registered with FINRA and the New York Stock Exchange (NYSE) as a broker-dealer. FINRA provides protection of $250,000 if the firm that holds your assets goes bankrupt.
Fidelity Investments Product range
The core product offerings of Fidelity are comprehensive with a powerful set of assets and research offerings available. The extensive range of asset classes provided
Stocks and ETF’s
$0 transaction fees for equity trades and ETFs
They also pay an “additional” assessment of .01 cents to .03 cents per $1,000 for certain regulatory costs
New Equity Issuance
Securities
- 3% to 4.2% percent of selling new issuance
- 5% to 7% of new issuance fee
Follow-ons
- 1.8% to 2.4% of investment amount
- 3% to 4% of new issuance fee
Options
$0 per options trades plus .65 per “leg” of the option trade
Additional fee when selling an option of $.01 to $.03 to cover certain reporting requirements of the ORF (Options Regulatory Fee)
Investment advice
Bonds
Securities Range of Fees from Participation in Selling Group for Fixed income investors:
Range of Fees from Underwriting
- Agency/GSE 0.05% to 1.00% of the investment amount
- Corporate Notes 0.01% to 2.5% of the investment amount
- Corporate Bonds 0.01% to 3.0% of the investment amount
- 0.05% to 3.0% of the investment amount
- Municipal Bonds and Taxable 0.1% to 2% of the investment amount
- Structured Products (Registered Notes) 0.05% to 5.0% of the investment amount
- Fidelity index funds – Please refer to the applicable pricing supplement or other offering document for the exact percentage sales concession or underwriting discount.
“Fidelity Go”
A diversified portfolio of Fidelity stock and bond funds, seeking to track the market and managed over time. It offers stock and ETF trades, international stock trading, These investment strategies, asset class, and trading platforms make Fidelity Go an attractive investment strategy and can support reduced expense ratios.
- Personalized to your retirement or savings goal
- No minimum account amount required
- $10,000 to $49,999 thousand charges $3 months per month
- $50,000 and up charges 0.35% of the account balance
Single Retirement Fund
A target dated fund that adjusts asset allocation over time based on the retirement year
No account minimum needed
0.12%-.075% annual expense ratio
Fidelity Investments Customer service
Fidelity has a “virtual chatbot” that isn’t very useful unless you have a specific question that it can answer.
Live chat agents are available online Monday through Friday 8 a.m. – 10 p.m. as well as Saturday and Sunday 9 a.m. – 4 p.m.
Phone representatives are available 24 hours a day, 7 days a week.
Fidelity representatives will respond to your secure email.
The chat and especially 24/7 phone support definitely gives an advantage to Fidelity compared to other brokers that are usually limited to business hours.
Customer service can help put you in touch with advisory or brokerage services, fidelity personalized planning, and a fidelity investments review.
Fidelity Investments Fees
Fidfolios
- 0.40% with a $5,000 balance
Fidelity Personalized Advice and Planning
- 1.1% annual fee with a $50,000 balance
Fidelity Wealth Management
- .2% fee with minimum account of $250,000
- $2 million dollar account balance and fees of .2% to 1.04$
Fidelity Investments Special Offers
Fidelity Youth Pack gives an extra $50 for any amount over $100 deposited for an investor under 18 entering the online brokerage space for the first time.
The Fidelity Starting Pack offers $50 for any new account opened with more than $100 in the account.
Opening a Fidelity Investments account
How easy is it to do? Are there any restrictions?
Opening an account to trade mutual funds, stocks, ETFs or options bank account to the app is not difficult. However, after I opened my main Fidelity account it gave me an error when trying to open a brokerage account.
Some Fidelity funds do require a settlement procedure to buy after you open an account.
How easy is it to withdraw funds?
It is simple to sell Fidelity mutual funds, ETFs, and most Fidelity mutual funds with no transaction fee. After you sell, the Fidelity mutual funds, ETFs, bonds or options should be ready to transfer within five to ten minutes.
Some Fidelity and non-Fidelity accounts do have a settlement procedure so make sure you read the prospectus on all mutual funds you purchase to understand whether you have an immediate withdrawal period or 2-5 business days of settlement period.
Fidelity Investments Safety
How safe is the Fidelity Investments platform? What security measures are there and what protection levels do they have?
Fidelity has 4.8 trillion dollars AUM (Assets Under Management) and is an extremely safe broker. If the company did go under, you are protected by the SIPC up to $250,000 and $250,000 is protected by FINRA for a total of $500,000.
Fidelity was conned in 2015 for $529,000 which does raise some questions about internal controls, but it is very unlikely a security failure of that magnitude would harm investors.
Fidelity Safety Policies
Fidelity also uses certain technologies to help protect your account:
Our website employs various security features—visible and invisible—to help keep you safe.
- Fidelity SimpliSpeak biometric login
- Fidelity MyVoice biometric login
- Internal controls
- Customer verification
- Restricted customer data access
- Fraud detection
- Employee security trainings
- Encrypted communications
Fidelity Investments Education
Does the broker have any help guides, or further educational sections on the site to help users better understand the broker and investing in general?
Fidelity offers excellent educational resources, starting from absolute investing beginners active investors a sophisticated trading platform Fidelity also offers a 4-week trading course as a webinar which can help absolute beginning investors get a basic understanding of the markets
Fidelity also offers a large amount of macroeconomic, microeconomic, and industry-specific research that is invaluable for active traders and financial advisors.
Common questions I get asked about Fidelity Investments
Does Fidelity require an account minimum.
No, Fidelity have no account minimum. You may want to consider depositing more than $100 to take advantage of the $50 bonus Fidelity will add to your account.
How safe is Fidelity?
Fidelity is extremely safe, and offers multiple security options internally as well as 2 factor authentication for users to login.
Does Fidelity trade mutual funds for $0.00?
Yes, Fidelity trades most no-load mutual funds and mutual funds run by Fidelity for $0.00. They also trade stocks and ETFs for $0.00. Option legs are $.65 per leg.
How do I contact Fidelity?
You can call Customer Service at 1 (800) 343-3548 24 hours a day, 7 days a week. You can also send a chat, or email Fidelity.
Who is Fidelity for?
Fidelity is a full-service brokerage and offers options for every level of traders. The account generally has a lower percentage fees for larger portfolio balances.
Does Fidelity provide research?
Yes, Fidelity provides excellent research for every type of investor. They have a four week class for beginners. For intermediate investors they have news and clearly written macro and micro economic information. For advanced traders, they have targeted research on stocks and other assets.
Is Fidelity a Good Way to Make Money?
Fidelity has an excellent reputation, and it’s one of the best low-cost platforms for day traders. The company focuses on providing traders with better order execution, cash management, and investing tools to help traders meet their investment objectives.
Fidelity makes money by charging for automated investment management, research tools, stock research, retirement accounts, managed accounts, and fidelity margin rates.
Crucially, they do not make money by selling your order flow to other brokers (Payment for Order Flow) PFOF, like most other brokers including Charles Schwab, TD Ameritrade, and Robinhood.
Does Fidelity have hidden fees?
Fidelity offers a Zero Fee Total Market and Zero Fee International fund that have no account fees or trading fees which could be good for retirement investors. Fidelity also does not sell your data to other brokers. For these products, Fidelity does not have hidden fees.
Does Fidelity let you trade pre-market?
Extended Hours trading are offerings Fidelity offers to brokerage customers, investment advisor, and market makers to trade certain stocks on Fidelity.com before and after the standard hours of the major U.S. stock exchanges and Nasdaq. Fidelity accepts premarket orders from 7:00 – 9:28 a.m. ET, and after hours orders from 4:00 – 8:00 p.m. ET.
Are Fidelity trading platform good for fee free mutual funds, money market funds, and online brokers?
Fidelity provides a suite of robust research tools and asset screeners to help you find your next trade. Several pre-built and customizable screeners are available for stocks, ETFs, options, and fixed income.
The stock screener has more than 140 criteria and about 20 themes such as artificial intelligence, drones, and cloud computing. The ETF-focused research is extensive and includes analyst ratings, themes, and the option to search funds by a specific stock.
Final verdict: is Fidelity Investments any good?
Fidelity presents an excellent selection of nearly all tradeable assets. For long-term, passive investors Fidelity is a great option to buy passive mutual funds, bonds, ETFs, individual stocks, options, and foreign exchange.
Fidelity does not trade futures or commodities, so if those are important to you look elsewhere for a broker. The ActiveTraderPro runs directly on your computer and is a very capable.
It has technical indicators, a live news flow, and an options screen with Option Greeks (numbers that describe the current state of an option).
Fidelity Investments Frequently Asked Questions (FAQs)
Should I buy TIPS (Treasury Inflation Protected securities)?
With the highest inflation in forty years, TIPS could be a good option for your portfolio. TIPS protect your portfolio against inflation by adjusting the principal every 6 months. The principal amount is adjusted by the real rate of inflation.
There also “STRIPS” which stands for Separated Treasury Inflation Protected Security which allows traders to trade the bonds as “zero” interest bonds.
Can I buy bonds in non-dollar denominations?
The short answer is yes you can buy bonds in non-dollar denominations. However, they are more expensive:
– Less than < $1MM is a .30% fee to sell the bond
– Less than <$5MM is a .20% fee to sell the bond
– Greater than $5MM is a negotiated rate
Fidelity Investments Customer reviews
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