Fidelity is a household name for those who are well versed in the investing game. They enjoy stellar reviews from their peers and clients alike. But what is it about this broker that sets them apart from their competitors? It’s more than just the decades of experience since they first opened their doors to their clients in 1946.
There is a cool confidence the group displays in their range of products and service offerings. Despite being considered one of the older brokerages, the products are modernized to suit a discerning investor’s needs. Their trading platform is hard to beat and for mobile users, the transition between platforms is effortless.
- $2 Trillion in client assets
- Mobile app top of the range
- $4.95 fee for stock trades
Advantages and Disadvantages of Dealing With Fidelity
While the broker shows that it’s one to beat in the market, there are a few drawbacks too.
- Traders have access to over 500 commission-free ETFs
- There is no minimum deposit requirement to open an account with Fidelity
- Trades cost a flat fee of $4.95 per trade, which is relatively low in the market
- International traders have access to the accounts and multiple currencies are supported
- A number of the transactions that competitors levy against their customers, are free with Fidelity
- Day Trader may find it hard to stick to their trading schedules as there is no ladder-trading tool
- Customers don’t have access to futures or forex trading
- The mutual fund trade fee seems a little steep at $49.95
- Customers do not have bonus incentives to join Fidelity
Facts At A Glance
|US regulation||Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA)|
|Webinars, introduction||Site-specific, a great training platform|
|Demo account||Yes, Active Trader Pro|
|Key features products||Stocks, Mutual Funds, ETFs, Fixed Income, Options, Retirement, and more|
|Deposit bonus||None, only commission-free trades with qualifying deposits|
|Commission||$4.95 per trade plus an additional $0.65 per contract for options|
|Platform/Mobile Trading||Fully supports mobile|
|Miscellaneous||No exit fee|
What Fidelity Has To Offer
Fidelity offers more than just experience in the financial markets, it also happens to know a thing or two about promoting products that will help their customers expand their wealth portfolios. Dealing with Fidelity can happen on a number of platforms, including smartphones and tablets. While there isn’t an option to trade futures or forex on the trading platform, there is a long list of other products that fit the medium to the longer-term investment needs quite well.
The products range from tax-effective IRAs to fixed income products and CDs. Investors also have their pick of ETFs, and those who meet the minimum investment threshold can look forward to 500 commission-free ETFs.
The Active Trader Pro platform is right up there with industry leaders and consumers will be pleased with all the add-ons that enrich the experience. Charting tools and customizable dashboards are all part of the process. Pricing is another part of the trading offer that sweetens the deal, as investors know right from the start what they’re getting into. Set pricing allows investors to budget more effectively and the transparency of the fees helps a great deal. The final part of their offering is the obvious effort they put into their service delivery, cementing their client-first approach.
Costs You Should Be Aware Of With Fidelity
Fidelity is fully transparent with their fees and for investors, this is refreshing as there are no hidden costs. There are no account fees and no minimum deposits required for the accounts, including the IRAs.
Stocks and Options
Investors pay $4.95 per stock or option trade, and there is a $0.65 fee per contract on options.
Investors have access to a wide range of no-fee trades on select Fidelity and iShares ETFs. There is a $4.95 fee on all other ETFs.
Bonds and CDs
Investors can save up to $14 per bond, as the cost is $1 per bond or CD in secondary trading. It’s free for US Treasuries traded online.
Fidelity offers zero expense ratio index mutual funds. Investors don’t have to have to maintain minimum investments in these mutual funds. There is no cost on the Fidelity funds and there are hundreds of funds that carry no transaction fees.
There are a number of services that Fidelity provide their investors at no cost. These include:
- Mutual fund low balance fee
- Account service fee
- IRA closeout fee
- Reorganization fee
- Late settlement fee
- Bank wire
- Insufficient funds
- Stop payment
- Bill payment
- Account ATM fee, and more
Fidelity charges commissions on certain investor packages:
- Fidelity Go has a charge of 0.35% and there is no minimum eligibility
- Fidelity Personalized Planning and Advice levies a fee of 0.50% the minimum eligibility is $25,000.
- Wealth Management carries a fee of 0.50% to 1.50% and the eligibility requirement is $250,000.
- Private Wealth Management has a fee of 0.50% to 1.05% and requires $2 million with Fidelity Wealth Services and $10 million total investable assets.
Fidelity Trading And Product Offering
High-end investors who want to get the most of their trades will have access to hundreds of free trades, depending on their deposits. Deposits between $50,000 to $99,999 will have access to 300 free trades. Deposits of $100,000 or more have access to 500 free trades, and both offers are available for up to 2 years.
Customers enjoy access to the following products:
- Mutual Funds
- Retirement and IRAs
- Fixed Income, Bonds & CDs
- Annuities, and more
Customers also have access to other products such as credit cards and insurances.
Demo Account On Active Trader Pro
Fidelity customers already have access to the Active Trader Pro Demo account and simply need to log in. Fidelity guests follow a short and simple process to start their demo experience. The demo account is designed to provide traders with access to a dummy platform that closely mirrors the trading experience they will have on the actual trading site.
Traders can look forward to a fully customizable trading platform that models trades and generates ideas which includes options analytics. While these aren’t designed to provide traders with actual advice or recommendations for trades, it encourages traders to stay abreast of market developments. Traders have access to technical filters and analysis that provide helpful insights into the strategies they might use to fulfil their trades.
Investors also have access to delayed streaming data that will give them an idea of what to expect when they actually start trading. The demo account doesn’t require any funding, and when traders are ready to move onto the real thing they can revert back to the trading account at any time.
Bonuses And Other
Fidelity doesn’t offer much in the way of bonuses, which can place a bit of a damper on the trading experience. There is, however, the offer of 500 free trades that can lure potential investors over, however, the offer is tiered and there is a minimum deposit requirement. Deposits between $50,000 and $99,999 enjoy access to 300 free trades and deposits over $100,000 can look forward to 500 free trades. While this may seem out of reach to many, the offer is valid for two years which gives them quite a bit of time to build up reserves.
While the lack of bells and whistles may put some traders off, it’s important to consider the number of account services these guys provide free of charge, where their competitors levy substantial fees. There is also free access to their demo account that allows traders insight into potential trading strategies, without paying a cent.
Investors have access to advisors and while this service comes at a price, those who need guidance in terms of their wealth portfolio may feel that this is money well spent. As a whole, the full offering from Fidelity more than makes up for lack of gimmicks.
Fidelity’s Active Trader Pro
Apart from offering traders access to one of the best trading demo accounts, Active Trader Pro is the ideal fit for those hoping to expand their wealth portfolio. Traders have access to a fully customizable dashboard, which provides them with insight into the various aspects of trading. The watch list tool is the perfect companion for traders and access to the various tools on the dashboard is effortless, allowing trades to happen seamlessly.
Perhaps one of the standout features of the Active Trader Pro platform are the drawing tools, all 22 of them. Some of Fidelity’s closest competitors don’t offer drawing tools to their traders, which adds a few unnecessary and extra steps to the trading process.
What is surprising about this platform, is that there is no ladder trading tool for day traders. They could also consider adding in some additional options for columns to compete more closely with other competitors.
The platform is designed to make the trading experience as effortless as possible, providing traders with endless streams of information, charts, tools, and hints. There is a wealth of information available in the library and forums help traders stay abreast of trends and strategies. Overall, this is a tough platform to beat.
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How To Open An Account
The entire account opening process takes place online and users simply have to work their way through a few quick tabs. Before the account opening process starts, users first need to select the type of account, and then confirm whether they’re opening the account as an individual or jointly.
This then leads them to a screen where they select whether they’re existing customers of Fidelity, or new to the brand. Once this is done, the account opening process starts.
This step details all the personal information of the account holder and will also be the first step in terms of client identification.
In this step, account holders choose their preferences in terms of the account, such as statement delivery, notifications, etc.
In this step, customers are required to double-check and confirm their selection to ensure that they have the right product and also that the personal information provided is correct. This step also allows users to read through the terms and conditions, and accept these terms.
The final step is optional and is the part where account holders fund their accounts. Once the funds reflect, traders are able to start their trading journey.
Fidelity Service Offering
While Fidelity might not offer all the bells and whistles their competitors do, there is a special card in their arsenal that makes it hard to resist the offer, and that is service delivery. Fidelity offers access to various service channels, including email and telephone. The site also offers a live chat option for those who may need immediate assistance.
Fidelity is respected by its peers and has received numerous nominations and awards from its peers, and also enjoys good reviews. While there are some areas that could do with improvement, service isn’t necessarily one of them. Well-trained staff and advisors make dealing with the brand easy.
For customers who are experiencing technical difficulties, Fidelity also provides the option for remote access. This is done with the account holder’s permission only, and is offered to provide speedy resolution of errors or faults.
Deposits And Withdrawals
Fidelity provides a simple guide that allows investors to transfer money into their investments, between their investments, and make withdrawals when needed.
Investors can fund their accounts through an electronic funds transfer, which should take 1 to 3 days to reflect. A mobile check deposit will take around 4 days, and these deposits can be done through the mobile app. Investors can also fund their accounts by transferring existing investments over. For those who want to make regular transfers into their investments, there is the option to set up an automatic deposit on a recurring schedule.
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Transfer Between Accounts
Investors can easily top up their IRAs and 529 college savings plans from their non-retirement accounts with Fidelity. They can also transfer their required minimum distribution from their retirement account to their non-retirement account with ease. Transfers between non-retirement accounts take place effortlessly and automatic transfers can also take place.
Investors who wish to withdraw from their accounts can request various methods to receive their funds. Electronic fund transfers take around 1 to 3 days to process, bank wires are immediate, and checks clear around 5 to 6 days later. Customers are also able to set up automatic withdrawals. Bill pay is another option on these accounts.
Security And Insurance
Fidelity is signed up under the Federal Deposit Insurance Corporation (FDIC) for their qualifying deposits. There are a number of deposits that don’t qualify, such as those that are already invested. The insurance is up to $250,000 per client and there are certain terms and conditions that apply.
Fidelity also enjoys cover from the Securities Investor Protection Corporation (SIPC) which is over stocks, bonds, and other securities. This cover is up to $500,000 for securities and up to $250,000 for funds held in a brokerage account. There are certain conditions and restrictions that investors would need to familiarise themselves with.
There are a number of other restrictions and regulations that further protect investor funds, however, even with this protection, investors need to ensure that they’re comfortable to take on the risk.
Customers can rest assured that Fidelity strives to protect their clients online. Apart from providing customers with handy safety tips, they also invest a lot in constantly upgrading their security protocols. Investors can look forward to two-factor authentication and a money transfer lockdown. Security text alerts will immediately let customers know of unauthorized access, and Fidelity MyVoice is an added layer of protection that uses voice recognition software to confirm transactions.
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Overall Experience With Fidelity
When you deal with an institution like Fidelity it’s hard to nitpick and find fault, as they are heavily invested in client experience. This means that their platform is world-class, their service delivery incomparable, and their support functions as it should.
The account opening process is fast and for those who are already on their platform, even faster. Their product range is designed to satisfy various investment needs that range from the medium to long-term options. Although there are a number of options, customers will still need to complement their portfolios with products from other institutions to fill the gaps.
For traders, the Active Trader Pro platform is simple and easy to use. It’s also fully customizable, which means that traders get to select exactly what they see on their dashboard. Charts, drawing tools, and technical analyses make trading a breeze.
Fidelity enjoys a high service ranking thanks to the ease with which customers can deal with them. Turnaround times are adhered to and the institution tries to make each and every avenue available to their customers to resolve issues, disputes, or complaints.
From a pricing perspective, Fidelity is priced well and pricing is also transparent, which makes it easier for investors to calculate costs. For investors, it will be hard to find an overall package that compares as well as Fidelity’s does.
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