Investing » Fidelity Investments Review 2024: More Expensive But Worth It
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Fidelity Investments Review 2024: 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.  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.
Interest Rates Last Update: June 3, 2024
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  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.
Interest Rates Last Update: June 3, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

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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.

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

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.

Account Options

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

Our Rating

4.5
4.5/5

PROS

CONS

Fidelity Pros And Cons

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

Pros
Cons
Coaching Sessions
Higher Costs
Varied Account Types
Complex Product Structure
Powerful ETF Screener
Account Minimums
30-Day Free Guest Access
Limited Availability of Physical Branches

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.

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.

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.

Fidelity CDs are available with terms of three months up to 5 years, so you can lock in a rate according to your requirements and investment strategy.

Generally, longer-term CDs offer higher yields, but there are some exceptions. Similar to other broker CDs, Fidelity CD rates offer competitive APY of 4.65% – 5.40%. Also, Fidelity offers excellent options for CD laddering.

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.

Fidelity's fees and commissions, although justified by the services provided, may be relatively higher compared to some low-cost brokerage alternatives, which could impact investors seeking the lowest possible costs.

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).

Fidelity's physical branch network is not as extensive as some traditional banks or larger brokerage firms, which might be a drawback for those who prefer in-person assistance.

Some of Fidelity's managed portfolio services or premium features may have minimum investment requirements that could exclude smaller investors.

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

Fidelity 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.

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

Fidelity Account Types

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

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, and 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.

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

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.

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.

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.

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.

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.”

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

Who Should Consider Fidelity?

Fidelity Investments is a brokerage firm that offers an extensive array of products and account options, catering to a diverse range of investors, including those who prefer active or passive management, as well as individual and institutional clients.

The variety of account types available comprehensively addresses various investment needs, and the associated commissions and fees are well-justified in relation to the high-quality services provided.

Furthermore, Fidelity's trading education division surpasses many of its competitors, and its trading platform effectively competes with other prominent players in the industry.

Fidelity Investments is particularly suitable for individuals interested in actively managing their accounts. The educational resources available through its learning center are abundant, covering everything from technical analysis to options trading, making it possible to attain a solid grasp of financial markets.

While not the most budget-friendly brokerage option in the United States, Fidelity Investments excels in areas where others may fall short. For those who are willing to invest a bit more in exchange for exceptional customer service and top-notch trading education, this broker presents an ideal choice.

In summary, Fidelity Investments stands as a reputable brokerage firm that has earned its status as one of the largest and most dependable brokers in the United States.

FAQs

Fidelity's trading education division is strong and often surpasses competitors, offering valuable resources for improving trading skills and understanding financial markets.

Yes, beginners can benefit from Fidelity's educational resources and user-friendly platform, which help them understand and navigate the world of investing. However, fees may be a bit high for beginners.

Yes, Fidelity is known for its excellent customer service, offering prompt assistance and guidance to investors, which can be especially valuable during market fluctuations.

Fidelity stands out for its exceptional customer service, comprehensive trading education, and a diverse array of investment products.

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Picture of Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  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.
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