Fidelity Go Review 2021: Pros, Cons and How It Compares

Fidelity Go, the robo-advisor from online broker Fidelity Investments, brings a different pricing model to the market. The platform charges no management fee for accounts with balances of less than $10,000, and a flat $3 monthly fee for accounts with balances between $10,000 and $49,999. Users with higher account balances are charged the all-in fee of 0.35% with no added investment expenses.

Fidelity Go uses its own Fidelity Flex mutual funds to build portfolios that a human investment management team monitors and rebalances. Investors are not charged expense ratios by those funds. The service has a $0 minimum for opening an account, but requires $10 to begin investing.

Fidelity Go is best for:

• Current Fidelity customers.

• Hands-off investors.

• Low-cost investment management.

• Human portfolio oversight.

Where Fidelity Go shines

Low cost: As noted above, Fidelity Go charges no fees for accounts below $10,000, and a flat monthly fee of $3 for account balances between $10,000 and $49,999.  Fidelity charges a 0.35% management fee, with no additional investment expenses, for accounts $50,000 and higher. Portfolios use Fidelity Flex funds, which cover seven asset classes and are generally well-diversified.

This means you know exactly what you’re paying when you sign up for this service — and in many cases, the cost is lower than you'd pay at other robo-advisors when you consider both management fees and fund expenses.

Fidelity integration: Fidelity Go customers are integrated in the company's existing retail managed business. Customers who already have an IRA or taxable account with Fidelity can easily take advantage of the company's robo offering. Fidelity Go is not available for 401(k)s held at the company, but you can roll over your old 401(k) into a Fidelity Go account.

Online advisory clients also get access to Fidelity’s financial planning tools and apps, as well as the company’s customer support and educational resources, both of which are strong. And investors can fund their accounts with the 2% cash-back rewards earned from the Fidelity Rewards Visa Signature card.

Human portfolio oversight: It’s common among broker-launched online advisors to pair computer algorithms with dedicated financial advisors. Fidelity Go takes a different approach: The day‐to‐day investment and trading decisions for portfolios are handled by a team of humans from Strategic Advisors, a registered investment advisor and Fidelity company. The advisors also rebalance portfolios when a customer’s portfolio moves outside of the asset allocation or risk tolerance preferences they specified.

Like other advisors, Fidelity Go uses a questionnaire — designed to gauge your risk tolerance and financial goals — and computer algorithms to match investors to a portfolio. We especially like that without signing up or sharing any personal information, users can take that questionnaire and view a portfolio recommendation and sample investments.

Account minimum: Fidelity requires no minimum deposit to open an account, though you must have at least $10 in your account to begin investing.

Higher interest rate on cash: Idle cash in Fidelity Go portfolios is automatically swept into the Fidelity Government Cash Reserves fund, so customers can benefit from higher rates since many competitors sweep into bank deposits instead.

Where Fidelity Go falls short

Tax strategy: The company does not offer tax-loss harvesting, one of the features that makes robo-advisors stand out for taxable accounts. In taxable accounts, tax-loss harvesting involves selling losing investments to offset the gains from winners. Fidelity does use tax-advantaged municipal bond funds in taxable accounts, which can help minimize your taxes.

No human advisor guidance: As mentioned above, though Fidelity Go has investment advisors managing and rebalancing portfolios, these advisors do not give financial planning guidance or answer other investment questions. For those customers who desire additional human advice, look toward Fidelity's Personalized Planning & Advice (PPA) platform, which has a $25,000 account minimum and 0.50% management fee. With PPA, trained advisors coach customers by producing financial plans and outlining concrete steps to reach their goals.

Cash funding only: The company doesn't allow transfers of securities in kind, even by existing Fidelity customers. Only Fidelity Flex funds can be held in Fidelity Go portfolios, and since they are unique to managed solutions like Fidelity Go, you must sell securities equaling the desired transfer amount and use the cash generated to enroll in the service.

Is Fidelity Go right for you?

If you’ve been wanting to test the robo-advisor waters but you feel more comfortable with an established broker, Fidelity Go has a lot to offer. The fees are competitive, and the portfolios are well-diversified and closely monitored by real live humans. There’s also a low account minimum to help you get in the door, especially compared with other broker-owned online advisors.

Investors with taxable accounts, however, will miss the tax-loss harvesting offered by other robo-advisors. Although use of municipal bonds in taxable accounts can help reduce your tax burden.

Anna-Louise Jackson and Tiffany Lam-Balfour contributed to this review.