Fidelity Investments Review 2021: Pros, Cons and Comparison


Fidelity Investments has a strong reputation for its mutual funds, but its brokerage arm is no slouch either: it offers $ 0 trading commissions, an array of research offerings, and an easy-to-use platform that can be customized for more advanced traders as well.

The reputation of the funds is not bad either: the broker has received five stars from us in all fund categories with a wide selection of funds with no transaction fees, including its Fidelity Zero index funds, which have no transaction fees. no expense ratio and no minimum investment. requirement. These investor-friendly practices save clients a lot of money.

Fidelity Investments is ideal for:

  • Trading of stocks, ETFs and options without commission.

Fidelity Investments at a glance

No base commission; $ 0.65 per contract.

Account fees (annual, transfer, closing, inactivity)

Number of ETFs without commission

All ETFs trade commission-free.

Number of mutual funds without transaction fees

Over 3,400 mutual funds with no transaction fees.

Fidelity.com and Active Trader Pro. Both free for all customers.

Available for iOS and Android; advanced features.

Customer support options (including website transparency)

24/7 phone, email and live chat; 200 local branches.

Where Fidelity Investments shines

Commissions: Fidelity was already a leader in low-cost commissions, but the company phased out commissions in 2019 for stocks, ETFs, and options. Before that, the company removed almost all account fees, including account transfer and closure fees that are commonly charged by brokers.

Mutual fund : The war between brokers to reduce mutual fund fees brought good changes to Fidelity: the company was the first broker to market index funds without any expense ratio: the Fidelity Zero Total Market Index Fund , the Fidelity Zero International Index Fund, the Fidelity Zero Large Cap Index Fund and the Fidelity Zero Extended Market Index Fund.

Investors could build a balanced – and virtually free – retirement portfolio with these zero expense ratio funds alone, but even Fidelity index funds that charge an expense ratio undermine much of the price competition. In total, Fidelity investors have access to over 3,400 mutual funds with no transaction fees and over 700 mutual funds and index funds with expense ratios of 0.50% or less. These funds come from Fidelity and other mutual fund companies.

Fidelity also offers a wide selection of funds with little or no minimum – all Fidelity funds for retail investors do not require a minimum investment.

Research: Loyalty is strong here, with stock research from 20 third-party vendors including Recognia, Ned Davis Research, Thomson Reuters, and McLean Capital Management. The company offers ETF research from five providers and options strategy ideas from LiveVol options analysis software.

The stock quote pages display a stock summary score, which is a consolidation of ratings from these research providers. It gives a “precision-weighted sentiment derived from independent research vendor ratings on Fidelity.com,” according to the website.

This number of search firm offerings may seem too difficult to sift through, but investors can take a short questionnaire to identify vendors that match their investing style. A research firm dashboard assesses the accuracy of supplier recommendations.

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Customer service and educational support: Fidelity has long earned high marks for customer service, and the company offers free in-person advice and seminars for investors at its branches across the country. The seminars cover topics such as how to navigate the company’s website, when to take Social Security, and the basics of technical analysis. Online, the Fidelity Learning Center offers guides and webinars on a similar range of issues.

Platforms and tools: Like other brokers, Fidelity offers trading through its website and mobile apps, as well as a desktop platform for active traders.

The company’s online trading platform is easy to navigate and fairly comprehensive – highlights include advanced filters using the aforementioned strategy research and testing tools based on 10 years of historical data. Equally impressive is Fidelity’s mobile app, with real-time quotes, options trading, a consolidated version of the company’s research offerings, and a notepad in which you can save ideas and articles from your mobile browser.

Active traders will prefer the company’s Active Trader Pro platform, which is now available free to all investors. Active Trader Pro includes both a downloadable desktop version and a web alternative at ActiveTraderPro.com. Investors can seamlessly switch between the two. The customizable platform includes intuitive shortcuts, pre-defined market, technique and option filters, advanced options tools, and a multi-trade ticket that can store orders for later and place up to 50 orders to that time.

Cash management account: Fidelity offers an FDIC-insured cash management account that can be combined with a Fidelity brokerage account. The account offers many of the features of a bank account – including a large network of ATMs and no monthly or overdraft fees – but pays a lower interest rate than other cash management accounts. (Read our full review of Fidelity cash management account.)

Where Fidelity Investments fails

There’s not much we don’t like about Fidelity: The broker has always tested well in our reviews, and this year has been no different. This means that all the negatives are really quibbles, but we’ll list them here for transparency. Fidelity received the lowest marks from us for:

  • Although it offers fractional shares and trading options, the lack of futures or forex trading options only gives it a 3-star rating for tradable securities.

  • Higher broker-assisted transaction fees than we like to see, at $ 32.95.

The bottom line

Fidelity is the rare broker capable of serving both active traders and retired investors. The company brings it to all levels, starting with a selection of mutual funds that compare to any other broker and even include free offerings. But Fidelity also offers important features for stock traders, including solid trading platforms, no trading commissions, and a wide range of research offerings. We cannot think of an investor who will not be well served by Fidelity.

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