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

Fidelity is one of the most well-rounded brokerages available today, with no commissions on stock, ETF or options trades and a selection of no-expense-ratio index funds.

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Our Take

5.0

NerdWallet rating 

The bottom line: Fidelity offers $0 trading commissions, a selection of more than 3,700 no-transaction-fee mutual funds and top-notch research tools and trading platform. Its zero-fee index funds and strong customer service reputation are just icing on the cake.

Fidelity

on Fidelity's website

on Fidelity's website

Fees

$0

per trade for online U.S. stocks and ETFs

Account Minimum

$0

Promotion

Get $100

when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply.

Pros & Cons

Pros

  • Commission-free stock, ETF and options trades.
  • Large selection of research providers.
  • Strong customer service.
  • Expense-ratio-free index funds.
  • Highly rated mobile app.

Cons

  • Relatively high broker-assisted trade fee.

Compare to Similar Brokers

Fidelity
SoFi Active Investing
E*TRADE
NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Fees

$0

per trade for online U.S. stocks and ETFs

Fees

$0

per trade

Fees

$0

per trade

Account Minimum

$0

Account Minimum

$0

Account Minimum

$0

Promotion

Get $100

when you open a new, eligible Fidelity account with $50 or more. Use code FIDELITY100. Limited time offer. Terms apply.

Promotion

$5 to $1,000

in free stock for users who sign up via mobile app

Promotion

Get $600 or more

when you open and fund an E*TRADE account with code: BONUS21

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Become a NerdWallet member, and we’ll send you tailored articles we think you’ll love.

Full Review

Where Fidelity shines

Well-rounded offering: Fidelity Investments offers $0 trading commissions, no account fees that can erode returns, a swath of research offerings and an easy-to-use platform that also can be customized for more advanced traders

Mutual funds: Fidelity has a strong reputation for its mutual funds: The broker scores well across every funds category with a large selection of no-transaction-fee funds, including its Fidelity Zero index funds, which have no expense ratio and no minimum investment requirement. These investor-friendly practices save customers a lot of money.

Educational resources for all levels of investor: The educational resources and research options on offer from Fidelity are some of the strongest among the brokers we review with strong resources for both beginning retirement investors and active stock traders.

Where Fidelity falls short

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

Broker assisted trade fees: Fidelity's broker-assisted trade fee is higher than we like to see, at $32.95.

Fidelity is best for:

  • Frequent traders.

  • Beginner investors.

  • Research and data.

  • Retirement planning assistance.

Fidelity at a glance

Account minimum

$0.

Stock trading costs

$0.

Options trades

No base commission; $0.65 per contract.

Account fees (annual, transfer, closing, inactivity)

None.

Number of no-transaction-fee mutual funds

More than 3,700 no-transaction-fee mutual funds.

Tradable securities

• Stocks.

• Fractional shares.

• Bonds.

• Mutual funds.

• ETFs.

• Options.

Crypto offering

Crypto-based products are available, but not cryptocurrencies themselves.

Trading platform

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

Mobile app

Available for iOS and Android; advanced features.

Research and data

Free and extensive.

Customer support options (includes how easy it is to find key details on the website)

Phone, email and live chat 24/7; 203 local branches.

More detail about Fidelity's ratings

Account minimum: 5 out of 5 stars

Fidelity's account minimum is $0, which has become the industry standard for brokers we review, as many no longer have a required minimum to open or maintain your account. Some investment choices, such as mutual funds, may require a minimum initial investment.

Stock trading costs: 5 out of 5 stars

Fidelity was already a leader for low-cost commissions, but the company eliminated commissions in 2019 for U.S. stock, ETFs and options trades.

Options trades: 4 out of 5 stars

Options trades are commission-free, but they still carry a contract charge, which is $0.65. Fidelity doesn’t offer volume discounts on options.

Account fees: 5 out of 5 stars

Fidelity has done away with nearly all account fees, including the transfer and account closure fees that are commonly charged by brokers.

Number of no-transaction-fee mutual funds: 4 out of 5 stars

The war among brokers to cut mutual fund fees has brought good changes to Fidelity: The company was the first broker to bring to market index funds with absolutely no 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 the Fidelity index funds that do charge an expense ratio undercut much of the competition on price.

Fidelity offers more than 3,700 mutual funds that carry no transaction fee and over 800 mutual funds and index funds with expense ratios of 0.50% or less. Those funds come from Fidelity and other mutual fund companies. Mutual funds that charge transaction fees will cost $49.95 to buy, $0 to sell.

Tradable securities available: 3 out of 5 stars

Fidelity allows investors to trade stocks, bonds, mutual funds, ETFs and options. The company also allows traders to purchase fractional shares, which gives investors an option to diversify into higher-cost stocks by purchasing a slice of a share rather than the full amount.

The company does not offer futures, forex trading or cryptocurrency trading. While lack of those features would not dissuade most retirement investors, they are options that active stock traders would like to have in their investing toolkit.

Crypto offering: 2 out of 5 stars

Fidelity does not offer access to cryptocurrencies. However, investors can explore crypto-related products that trade over-the-counter.

Trading platform: 5 out of 5 stars

Fidelity has two trading platforms, Fidelity.com and Active Trader Pro. Both are free for all customers. Highlights include advanced screeners using research and strategy-testing tools based on 10 years of historical data.

Active Trader Pro platform 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 orders at a time.

Mobile app: 5 out of 5 stars

Our star rating here is based on how iOS and Android users score the broker's mobile apps. Fidelity’s highly rated apps includes 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.

The company recently updated its apps to streamline and simplify trading, portfolio monitoring and research, including a customizable newsfeed. You can use the app to schedule an appointment with your existing Fidelity advisor.

Not rated here, but worth noting: Fidelity also launched a new mobile app, Fidelity Spire, designed for young adults. The app includes the ability to trade with more contextual explainers on trading topics and terms, like "bid price” and “dividends.”

Research and data: 5 out of 5 stars

Fidelity is strong here, with stock research from more than 30 third-party providers, including Recognia, Ned Davis Research, Thomson Reuters and McLean Capital Management. The company offers ETF research from five providers and options strategy ideas from options analysis software LiveVol.

Stock quote pages show an Equity Summary Score, which is a consolidation of the ratings from these research providers. It gives an “accuracy-weighted sentiment derived from the ratings of independent research providers on Fidelity.com."

This number of 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.

Customer support options: 4.5 out of 5 stars

Fidelity earns strong marks for educational tools and customer service options, including a network of more than 200 branches for in-person advice and educational options, and 24/7 phone, chat and email support.  Fidelity’s Online Learning Center was overhauled to include a more customized experience, using machine learning to surface educational materials that match the customer’s investing behavior.

Is Fidelity right for you?

Fidelity is the rare broker that's able to serve both active traders and retirement investors alike. The company brings it on every level, starting with a mutual fund selection that stacks up to any other broker and even includes free offerings. But Fidelity also offers features that matter to stock traders, including strong trading platforms, zero trade commissions and a wide range of research offerings. We can't think of an investor who won't be well-served by Fidelity.

How do we review brokers?

NerdWallet’s comprehensive review process evaluates and ranks the largest U.S. brokers by assets under management, along with emerging industry players, using a multifaceted and iterative approach. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs.

DATA COLLECTION AND REVIEW PROCESS

We collect data directly from providers, and conduct first-hand testing and observation through provider demonstrations. Our process starts by sending detailed questionnaires to providers to complete. The questionnaires are structured to equally elicit both favorable and unfavorable responses from providers. They are not designed or prepared to produce any predetermined results. The questionnaire answers, combined with product demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across more than 20 factors. The final output produces star ratings from poor (one star) to excellent (five stars). Ratings are rounded to the nearest half-star.

RATING FACTORS

Evaluations vary by provider type, but in each case are based upon the weighted averages of factors that include but are not limited to: advisory and account fees, account minimums and types, investment selection, investment expense ratios, trading costs, access to human financial advisors, educational resources and tools, rebalancing and tax minimization options, and customer support including branch access, user-facing technology and mobile platforms.

Each factor can involve evaluating various sub-factors. For instance, when gauging the investment selections offered by robo-advisors, 80% of the score is based on the potential for diversification (how well-diversified a resulting portfolio of investments could be) combined with the availability of specialty portfolios and level of customization for investors. Expense ratios form an additional 10% of the score, and low or no management fee the remaining 10%.

FACTOR WEIGHTINGS

The weighting of each factor is based on our team’s assessment of which features are the most important to consumers and which ones impact the consumer experience in the most meaningful way. The factors considered, and how those factors are weighted, change depending upon the category of providers reviewed.

INFORMATION UPDATES

Writers and editors conduct our broker reviews on an annual basis but continually make updates throughout the year. We maintain frequent contact with providers and highlight any changes in offerings.

THE REVIEW TEAM

The review team comprises seasoned writers, researchers and editors who cover stocks, bonds, mutual funds, index funds, exchange-traded funds, alternative investments, socially responsible investing, financial advisors, retirement and investment strategy on a daily basis. In addition to NerdWallet, the work of our team members has been published in The New York Times, The Washington Post, Forbes, USA Today, Bloomberg News, Nasdaq, MSN, MarketWatch, Yahoo! Finance and other national and regional media outlets.

The combined expertise of our Investing team is infused into our review process to ensure thoughtful evaluations of provider products and services from the customer perspective. Our writers and editors combine to have more than 70 years of deep experience in finance, ranging from a former Wall Street Journal reporter to a former senior financial advisor at Merrill Lynch.

CONFLICTS OF INTEREST

While NerdWallet does have partnerships with many of the reviewed providers, we manage potential conflicts of interest by maintaining a wall between our content and business operations. This wall is designed to prevent our writers and the review process from being influenced or impacted by our business partnerships. This way, all reviews can provide an unbiased review that serves the interests of our users. For more information, see NerdWallet’s editorial guidelines.

on Fidelity's website

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