Fidelity Investments Review 2017

Brokers, Investing

FidelityMost investors know Fidelity Investments for its extensive lineup of mutual funds and as a workplace retirement plan administrator. That may be why the company’s brokerage arm is less well-known among regular traders. That said, they should take a closer look. What they’ll find at Fidelity are low commissions, a wide investment selection and an impressive amount of research. The biggest knock on Fidelity’s brokerage side is the trade minimum on its active trader platform.


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Quick Facts

  • Commissions: $4.95 per trade
  • Account minimum: $0 for IRAs, $2,500 for brokerage
  • Promotion: 300 commission-free trades with deposit of $50,000 or more
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Fidelity Investments is best for:

  • Retirement investors
  • Active traders
  • Premium research
  • Low fees
  • No-transaction-fee mutual funds

Fidelity Investments at a glance

Overall

Stock trading costs$4.95
Options trades$4.95 + $0.65 per contract
Account minimum$2,500 for brokerage accounts; $0 for IRAs
Account fees (annual, transfer, closing, inactivity)No annual or inactivity fee; $50 account closing fee
Trading platformOnline trading platform; Active Trader Pro for desktop and browser is available to customers who trade at least 36 times in a rolling 12-month period
Mobile appAdvanced features mimic a desktop trading platform
Mutual fundsMore than 3,600 no-transaction-fee mutual funds
Commission-free ETFs91 commission-free ETFs
Research and dataFree and extensive
Tradeable securities• Stocks
• Bonds
• Mutual funds
• ETFs
• Options
Forex
Customer support/branchesPhone support 24/7; live chat and email support; more than 180 local branches
Promotion Fund an account with $50,000 and get 300 commission-free trades, plus access to Active Trader Pro platform.

Where Fidelity Investments shines

Commissions: Fidelity lowered its commissions in February 2017, dropping from $7.95 per trade to $4.95. That’s rock-bottom among online brokers, especially for the level of service the company provides.

Research: Fidelity is simply unmatched here. The company offers research from more than 20 providers, including Recognia, Ned Davis, S&P Capital IQ and McLean Capital Management.

Stock quote pages show an Equity Summary Score, which is a consolidation of the ratings from these research providers. It gives an “aggregate, accuracy-weighted indication of the independent research firms’ stock sentiment,” according to the Fidelity website.

screen-shot-2016-12-19-at-5-04-23-pm
ETF snapshot pages also show an impressive number of analyst ratings and reports, and mutual fund fact sheets include both Morningstar and Lipper ratings.

Twenty or more research firm offerings might seem like too much to wade through, but investors can take a short quiz to identify providers that match their investment style. A research firm scorecard evaluates the accuracy of the provider’s recommendations.screen-shot-2016-12-19-at-5-02-42-pm

Customer service and educational support: Fidelity has long scored points for customer service, and the company offers in-person guidance and free investor seminars at branch locations throughout the country. Seminars cover such topics as how to navigate the company’s website, when to take Social Security and the basics of technical analysis. Online, Fidelity’s learning center offers guides and webinars on a similar range of issues.

Customers who qualify for the company’s Active Trader Services also get 24/7 access to dedicated trading specialists. To qualify, investors must place 120 or more trades in a rolling 12-month period and maintain at least a $25,000 balance in their eligible Fidelity accounts.

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

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

Active traders who qualify for it will prefer the company’s Active Trader Pro platform, which includes both a downloadable desktop version and a web alternative at ActiveTraderPro.com. Investors can toggle seamlessly between the two. The customizable platform includes intuitive shortcuts; pre-built market, technical and options filters; advanced options tools; and a multi-trade ticket that can store orders for later and place up to 50 at a time.

Finally, the company’s Wealth-Lab Pro, also a premium tool, is desktop-strategy-testing software that allows investors to customize strategies and access up to 20 years of daily historical data.

Where Fidelity Investments falls short

Trading platform restrictions: The downside to Fidelity’s trading platforms and tools is that, as mentioned, certain offerings are restricted to high-volume traders. Active Trader Pro requires that customers trade at least 36 times in a rolling 12-month period; some advanced tools on that platform, like charting with Recognia, are available only to traders who place at least 120 trades per year. Wealth-Lab Pro access requires 36 trades per year and a minimum of $25,000 in assets.

Investment minimum: Fidelity’s minimum investment for brokerage accounts is $2,500; that’s fairly high compared with other brokers. The company’s minimum for IRAs is a much more reasonable $0, but that will get you only as far as the core position — in other words, cash.

If you want to invest in mutual funds, most Fidelity and non-Fidelity funds carry a $2,500 minimum. That’s a fairly high bar to clear. The good news: You can avoid that mutual fund minimum by signing up for automatic investments of at least $200 a month or $600 a quarter.

» MORE: See our head-to-head comparison of Fidelity vs. Vanguard.

The bottom line
Fidelity’s lineup of services for investors goes well beyond retirement accounts. Investors interested in venturing outside of the land of mutual funds should take note of the company’s low commissions, advanced trading capabilities — including a very strong mobile app — and breadth of research. Fidelity is best for traders who qualify to use its advanced platform, tools and active trader support.

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Arielle O’Shea is a staff writer at NerdWallet, a personal finance website. Email: aoshea@nerdwallet.com. Twitter: @arioshea.

Updated Feb. 28, 2017.

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