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Fidelity Investments Review 2023: More Expensive But Worth It

While not the cheapest brokerage house you may find in the United States, Fidelity Investments excels at many points where others don't.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann’s areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann’s areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

Review & Fact Check: Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Financial Expert, The Smart Investor CEO

Experience

Baruch Mann (Silvermann) is a financial expert and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

Fidelity Investments

Fidelity Investments has millions of customers across the USA and overseas. The company has been around for fifty years and is considered one of the largest brokerage houses in the world. The majority of Fidelity operations are in the USA, and it operates various investor centers and regional offices across the country.

Fidelity investment products range from annuities, mutual funds, and options through to sector investing and managed accounts, catering to advisors, institutions, employers, and individual investors. However, Fidelity also offers its investment services to international clients, but this is only in a limited number of countries, and it is via a separate, dedicated site.

Although it is not the cheapest brokerage house, Fidelity does excel in many areas where other companies lack. So, if you are prepared to pay a premium for outstanding trading education and excellent customer service, Fidelity could be the broker for you.

According to Chart: Number of Accounts of the Largest Online U.S. Stock Brokers 2021 (in Million Accounts)

fidelity-logo

On Fidelity Secure Website

Account Options

– Retirement / Education
– Stocks / Options
– Bonds, CDs, MMAs
– ETFs / Mutual Funds

No Minimum Deposit

PROS

CONS

Like any other broker, there are pros & cons for investors/traders. Here are the main benefits and drawbacks you should know before applying:

Benefits

The overall trading education arm at Fidelity Investment is very strong.

It stands out from the crowd when compared with the competition, but the coaching sessions raise the bar even higher.

This is exactly what differentiates some brokerage houses from other ones, as the attention to educating the clients indicates the broker’s interests are aligned with those of its clients.

A free trial accounts for everyone to compare the broker's offering with the ones provided by some of the best brokerage houses, test the trading platform and the trading conditions, and check the research tools and other features offered by Fidelity Investments.

In general, a big plus to any broker is that it let's potential clients have a look at what they'll get for the buck – even if the free trial may not contain all the features of a live account.

The ETF screener provided by Fidelity Investments helps traders finding ideas that match their investment goals. With more than one hundred unique ETF criteria, the screener easily identifies investments of interest.

The decision to open a trading account with a broker is important.

Therefore, the simpler the process, the better. Fidelity Investments has a clear structure of its account types, leaving no room for misunderstanding of what an account offers. All info is presented on the same page, with clear guiding provided.

If not sure, there’s always a representative to chat with you to make sure everything is understood.

Drawbacks

The large number of trading products offered by Fidelity Investments is poorly presented.

Because of that, it creates confusion, and traders have a difficult time understanding what the broker has to offer.

For example, all products appear in the main menu called “Investment Products,” but then the same products appear in different categories and sub-categories (e.g., stocks, sector investing – seems like an extension of mutual funds and the ETFs offering).

Trading on margin with Fidelity Investment comes at a higher cost than its main competitors.

It lowers the margin rate to 5% only for balances exceeding $1 million, while for the rest charges over 8%, while its main competitors do not exceed an 8% margin rate. 

The pricing structure for all the products offered by Fidelity Investments seems to be designed with the purpose of misleading people.

On the one hand, the broker advertises commission-free stock trading, but then there’s a small mark leading to the bottom of the main page where the full pricing structure is detailed with very small characters.

It seems like the broker doesn’t want its prospective clients to know the true cost of using its services. 

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Fidelity Trading Products

Depending on the type of investor, Fidelity Investments has different products for each category. Either an institutional investor or individual, a money manager or a financial advisor, there's at least a product for everyone.

Product Description
StocksCommon stock, depository receipts, unit trust funds, REITS, IPOs and more, from 25 countries
Fixed-IncomeIndividual bonds, bond funds, bond ETFs, C.D.s, money market funds, deferred fixed annuities
OptionsOptions trading at $65c/contract
ETFsFidelity ETFs and iShares from the world’s leading ETF provider
Mutual FundsOver ten thousand funds from Fidelity and other companies
Managed AccountsDigital investing, portfolio advisory services and separately managed accounts for all risk profiles
  

Commissions and Fees

For a clear view and understanding of Fidelity Investments commissions and fees structure, one must scroll down at the bottom of the webpage, zoom in, and read the Terms of Use.

Instead of making it clear from the start what its charges are, Fidelity Investment decided it's best that its customers struggle a bit before finding out the true costs of doing business with it.

For this reason, this section is one of the main cons of doing business with this broker.

For trading online U.S. equities, Fidelity Investments charges $0. The same applies to trading ETFs. On the other hand, options trading comes at the cost of $0.65/contract.

Traders should also be aware of a so-called activity assessment fee charged on selling options, and it ranges from $0.1 to $0.03 per each $1000 of principal. On top of that, there's the options regulatory fee that applies to both buying and selling.

Fidelity Investment charges a 5% margin rate, but that's only for balances exceeding one million dollars. For the rest, the margin rate jumps to 8.075%, a tad higher than most of its competitors (Schwab – 7.825%, E-Trade – 7.25%, T.D. Ameritrade – 7.75%).

Mutual funds trading has underlying expenses and other commissions, interest charges, and expenses associated with holding or transacting.

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Fidelity Account Types

Fidelity Investment gives traders the possibility to open various account types:

Investing And Trading

Two account types fit this category: the Brokerage Account, also called the Fidelity Account and the Brokerage and Cash Management account.

The first one is a full-featured account giving access to the full products spectrum available to trade with Fidelity Investments: stocks, bonds, options, mutual funds, precious metals.

Advertised as a “checking account with extra benefits”, the Brokerage and Cash Management account is similar with the Broker Account, with the exception of a few features such as having connections with Apple Pay, Square Cash, PayPal, etc.

Put it simply: one account for spending and one account for investing.

Saving For Retirement

In this category, we can find the classic IRA accounts – Rollover IRA, Traditional IRA, Roth IRA.

Saving For Education

This is a college savings plan called 529 Account, that offers tax advantages, flexible use of funds, and many investment choices to help save more.

Managed Accounts

Fidelity Investments offers two main types of managed accounts: Fidelity Go and Fidelity Personalized Planning and Advice.

The beauty of these accounts is that the investor may choose the risk strategy based on the preferred risk approach.

For instance, Fidelity Investments built seven levels of risk, from more conservative to more aggressive. Next, depending on the level, it allocates different percentages to four main investment areas: domestic stock, foreign stock, short term, and bonds.

Moreover, Fidelity Investments builds also personalized, tailor-made investments for you. In both cases, the advisory fee depends on the invested amount.

  • Fidelity Trading Platforms

Fidelity Investment's trading platform, Active Trader Pro, has a bundle of features enabling the investor to closely monitor the account and easily find the desired products to trade.

It comes in all versions (desktop, web-based, and as an app for trading on-the-go).

It makes it easier to discover trading opportunities using various filters (e.g., social sentiment) and has an options trade builder feature that helps traders in the learning process of trading options.

The platform also enables simple and complex multi-leg option orders, which typically is a complex feature for options trading.

  • Fidelity Customer Service

Fidelity Investments puts customer service at the top of its agenda.

It may charge higher margin rates than competitors, but the customer service makes you feel it earns a higher commission with interest.

A 24/7 customer service rule applies, and there's a representative standing by to help, regardless of the time during the day or night. One can also use the live chat options within certain working hours, send a secure email or use the virtual assistant for the most common questions and answers.

How to Open a Brockerage Account With Fidelity?

Step 1:  

Visit the Fidelity Investments homepage and click “Open an account.”

1_Fidelity Investments_Homepage

Step 2:  

Next, indicate whether it is a joint or an individual account.

2_Fidelity Investments_Account type

Step 3: 

Create a new account, inserting your name and email address.

3_Fidelity Investments_Get started

Step 4:

The next page comes up, insert your security number, date of birth, and phone details.

4_Fidelity Investments_Personal Info

Step 5:  

Type in your residential address, and the city, state, and zip code of your location, then click “Next.”

6_Fidelity Investments_Result

Once your identity is verified, you are good to go.

Trading Education

Fidelity Investments built a state of the art learning center that focuses on five different areas: Active Trader Pro, options, technical analysis, trading basics, and volatility.

Literally, the broker offers virtual courses to learn about each individual area. All those with an active account at Fidelity Investments can register in advance and take part in the course.

What's interesting is that the courses address all types of investors and cover a wide range of topics, from beginner trading strategies to complex features of the trading platform, for example.

Fidelity Investments Best For…

A broker with a wide range of products and account types, Fidelity Investments addresses all types of investors – active or passive managers, individual or institutional clients.

The account types offered cover every need of investment services, while the commissions and fees are justified compared with the services provided.

Moreover, the trading education arm beats many competitors, and the trading platform competes successfully with others in the industry.

Fidelity Investments suits very well those willing to actively trade their accounts.

Its learning center provides enough material to learn all one needs to master financial markets, from technical analysis to options trading.

While not the cheapest brokerage house you may find in the United States, Fidelity Investments excels at many points where others don't. If you don't mind paying a bit more for excellent customer service and outstanding trading education than this broker is for you.

All in all, a good brokerage house that earns its name as one of the largest and reliable brokers in the United States.

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Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor, which helps consumers make better financial decisions.  Silvermann's areas of expertise include investing, banking, and credit cards. Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more. Aside from being a finance expert, his background includes working as a business and financial analyst. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.
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The product offers that appear on this site are from companies from which this website receives compensation.