Fidelity Broker Review
  • Commissions & Fees
  • Trading Platforms
  • Mobile Platforms
  • Research Tools
  • Customer Service
  • Executions & Routes
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Summary

Fidelity Investments is well-established, having been around since 1946. They offer a diverse range of financial services, including their brokerage firm, investment advice, and life insurance. We’ve conducted an in-depth review of their brokerage services in this article.

About Fidelity

Fidelity Investments was founded in 1946 as Fidelity Management & Research by Edward C. Johnson II. It’s largest business is their suite of mutual funds, the largest of which is their Fidelity Contrafund, posturing over $107 billion in assets. Beyond mutual funds, Fidelity has a diverse range of financial services, including their brokerage firm, investment advice, life insurance to name just a few.

Type of Broker

Fidelity is part of the “big five” brokerage firms, operating as a discount brokerage firm for the mass of individual investors, as well as providing brokerage services to a range of institutional clients including other broker-dealers, financial services firms, and institutional funds. Fidelity’s brokerage branch handles of $443 billion in assets, as of 2010.

Account Minimums

Fidelity’s standard investment account, “The Fidelity Account” has a minimum initial deposit of $2,500 in cash or securities. Fidelity requires no minimum account balance once you have made your initial deposit.

Commissions & Fees

Commission Prices (Stocks)

All online U.S. equity trades are charged at a flat rate of $4.95 per trade, with no progressive fee reduction or per-share fees.

Commission Prices (ETFs)

Like many of the top brokerages nowadays, Fidelity offers a series of commission-free ETFs. Below is a table outlining Fidelity’s ETF fee structure.

Purchase 70 iShares ETFs online

$0

Purchase 11 Fidelity sector ETFs online

$0

Purchase 3 Fidelity active fixed income ETFs

$0

Purchase 6 Fidelity factor ETFs online

$0

All other ETFs

$0

Commission Prices (Options)

All online options trades

$4.95 per trade, plus $0.65 per contract

Buy to close orders of $0.65 to $0.11

$4.95 flat

Buy to close orders of $0.10 or less

$0

Software Fees

While Fidelity charges no fees for any of its software offerings, they do require a minimum of 36 trades placed in a year to qualify for their premium trading software Active Trader Pro. Their mobile app and website interface are free to all clients.

Account Fees

Like most brokers, Fidelity charges a range of fees for different account activities. Often times, these “hidden” fees can make a break a trader’s use of a broker. The table below outlines various account fees charged by Fidelity.

Selling a commission-free ETF within 30 days of initial purchase

$4.95

Mutual fund low balance fee

$12 per year

Bank wire

$10 per transaction

Foreign currency wires

Up to 3% of principal (charged when converting USD to wire funds in a foreign currency

Foreign dividends/reorganizations

1% of principal

Voluntary reorganizations

$38 per transaction

Returned or stopped checks

$15 per transaction

Late Settlement

$15 per transaction

Transfer Limited Partnership Positions

$75 per partnership

Transfer and Ship Certificates

$100 per certificate

Cashier’s Check

$10 per transaction

The account fees are unlikely to make or break any investor. These are standard in the industry and most can be avoided by funding an account online.

Margin Rates

Fidelity claims to have the the most competitive margin rates in the industry.

Debit balance

Margin rate

Effective rate

$1M+

Base – 3.075%

4.500%

$500,000-$999,999

Base – 2.825%

4.750%

$250,000–$499,999

Base – 0.500%

7.075%

$100,000–$249,999

Base – 0.250%

7.325%

$50,000–$99,999

Base – 0.200%

7.375%

$25,000–$49,999

Base + 0.750%

8.325%

$0–$24,999

Base + 1.250%

8.825%

Platforms & Tools

Fidelity offers three different platforms from which to manage your account. One advanced, one basic web, and one basic mobile platform.

Active Trader Pro

Active Trader Pro is Fidelity’s premium trading platform offering. In order to get access to the platform, you must make 36 trades per year.

Active Trader Pro is Fidelity’s trading platform to compete with the other advanced platforms of the top brokers like TD Ameritrade’s ThinkOrSwim or Schwab’s StreetSmart Pro. Because of this, it offers very similar features such as:

  • Real time streaming market data
  • Real time analytics
  • Proprietary trading tools like Strategy Ideas and Trade Armor
  • Advanced charting
  • Advanced options analytics
  • Time & Sales with historical data
  • Place up to 20 orders at once
  • Advanced conditional orders

fidelity platform

activetraderpro

Fidelity.com Web Platform

Free to all clients, Fidelity’s web platform is basic and similar to most of their competitor’s web platforms, however, while not lacking in functionality, the user interface looks visibly dated.

Any basic investing function like quotes/price charts, news, analyst reports, etc. is easily accessible on Fidelity’s web platform.

market research

Fidelity Investments Mobile

Fidelity has a very well-supported and well-received mobile app. Using five simple tabs, it’s easy to navigate and has a well designed, user-friendly interface. It looks as if the designers got some inspiration from the minimalism of the Robinhood app.

Any basic feature expected of a mobile investment app is included. Price charts, quotes, watch lists, and simple market summaries, just to name a few.

mobilewatchlist fidelitymarketsview fidelitymobileapp

 

Research Tools

One of Fidelity’s strongest points is their research offerings, not only do they offer the most equity research options in the industry, they also have unique methods of visualizing their data into a quick, digestible format.

Fidelity offers research from top firms like Ned Davis, Reuters, and Recognia. With research from over 20 firms, it can seem overwhelming, almost useless to house that many providers, but each provider has their own unique style and biases. Clients can take a quiz to find which research provider matches their trading/investing style the most.

These research tools are best for investors who incorporate fundamental analysis into their trading decisions.

Customer Service

Fidelity offers 24 hour customer service via phone, and live chat customer service for 14 hours of the day. Additionally, clients can go to Fidelity’s local Investor Centers and talk to an account advisor in person.

Executions & Routes

A Fidelity client cannot get direct market access without being a client of their institutional service, Fidelity Capital Markets. This is to be expected for a discount broker, as most will not offer advanced routing options.

Type of Trader Fidelity is Best For

While Fidelity has a diverse array of offerings, it is not the best broker for the active trader. There are better options in terms of executions with the same commissions. Furthermore, brokers like ETRADE and TD Ameritrade continue to lead the market with their advanced platforms. While some of the distinctions between discount brokers can come down to preference, we believe that Fidelity doesn’t provide much of a competitive edge when compared to its peers.

However,  Fidelity is an excellent broker for the position or longer term investor. The vast amount of research offered is of huge benefit to an investor. While traders may not get the same benefit from this type of research, it can be very beneficial for investors.

Pros & Cons

Pros

  • Best research offering in the industry
  • Competitive commission rates
  • Excellent mobile app

Cons

  • Least amount of commission-free ETFs in industry
  • Advanced trading platform requires a minimum amount of trades
  • High minimum initial deposit ($2,500) relative to the industry