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Fidelity Investments Review

About Fidelity Investments

Fidelity Investments is one of the largest diversified financial services firm in the world. Established in the year 1963, it offers wide range of solutions like retirement planning, portfolio management, brokerage services and many other financial products. Fidelity is the winner of Kiplinger’s best brokers in the industry.

Fidelity Investments Offerings

Considering multifaceted needs of varying customers, Fidelity investments offers plethora of services, namely:

  • Mobile Trading
  • Trading on foreign exchanges
  • Futures and Options trading
  • Mutual Funds, stocks, fixed income, ETFs, etc. investments
  • Dividend Reinvestments
  • Broker assisted trades
  • Services especially for Active traders like advanced trading tools, low brokerages, etc.

Advantages of being associated with Fidelity Investments

Fidelity Investments is a virtually one-stop shop for a customer, serving his/her various financial investment needs. Moreover, it offers best-of-breed services for almost all types of customers — active traders, passive investors, savvy investors as well as naïve investors. However, its most prominent services are:

  • One-on-one guidance that facilitates a customer to develop investment portfolio specific to his/her needs.
  • Free, 24/7 access to experienced investment professionals
  • Seamless and easy-to-use trading portal
  • Free independent research, planning tools and calculators
  • One of lowest commissions and fees
  • Free mobile apps for phone, iPad and others
  • 24/7 help online and over the phone
  • Automated trading
  • Advanced tools, dedicated representative for active traders
  • No-fee rewards American Express card
  • Instant messaging
  • Mobile trading
  • Option paring summary view

Challenges with Fidelity

Primary disadvantages of Fidelity Investments are:

  • Minimum account balance of $ 2500 is too high
  • Commission rate is too high
  • Doesn’t offer FOREX trading or virtual trading tools
  • More than 36 trades per year are required to utilize top platform
  • Tools for options traders are limited
  • Website goes slow to respond with increase in traffic

How to set up an account with Fidelity

The Investing and Trading accounts can be opened online. It can be an individual or a joint account. An online form requiring information about personal details, Account details has to be filled. Assistance is available online. All you need is SSN number, Employers name and address and a Bank Account, Brokerage Account Number.

Fidelity fees and commissions structure

Fidelity Investment doesn’t stipulate any minimum deposit to open an account. And it charges $75 flat fee per order for investment greater than $2500 in mutual funds.

For Margin Trading – $5000, the rate varies from as high as 8.75 % for the lowest bracket ($0-9999) to as low as 3.75 % for the highest bracket ($500,000+).

Fidelity has a three tiered commission structure categorizing customers into gold, silver and bronze. Gold clients pay $7.95 per order, silver clients pay $10.95 per order and bronze clients pay $19.95 per order. Option trades carries normal commission rate plus $.75 per contract.

Trade in the US Treasury bills, Notes and Bonds is free, whereas trade in other debt instruments like GSE (Agency Securities), secondary CDs, Municipals, Corporate (BBB- or higher), CATS/TIGRS, Corporates (BB+ or lower) costs $1 per bond.

Tools offered:

1.      Portfolio review:

This tool provides the user with the Target Asset mix based on his risk appetite, current portfolio, age and time to retirement.  Based on these input parameters it provides a plan for future investments. The investor needs to compare the Target mix with the current mix and modify his portfolio accordingly .This tool is one of best available with fidelity.

2.      Hypothetical Trade Tool:

This provides a mechanism to view the impact on the current portfolio (change in asset allocation, asset concentration, stock style, and bond style) once a transaction is performed. In this way an investor can get a better picture of various scenarios and can take an informed decision reducing the guessing part.

3.      Portfolio Analysis:

This tool provides graphical information of the investor’s portfolio and its performance vis-à-vis the market indices such as Dow Jones, S&P etc.

4.      ETF Portfolio Builder:

Fidelity has given this tool which enables one to research and develop an Exchange Traded Fund (ETF) portfolio. These ETF consists of basket of securities whose behavior is similar to the broad market index. Thus an investor can create his own ETF portfolio and can trade in it.

5.      Mutual Fund Evaluator:

This is mutual fund picking tool which selects mutual funds based on their performance to its peers in a given asset class and asset category. One such criteria being an asset class of equity and category of Mid Cap-value. It also considers factors like term of investment and rate of return.

6.      Bond Ladder:

This is a sophisticated tool which allows one to build a consistent flow of income from a set of bonds with different maturities. There is no required minimum investment to create a bond ladder and hence it is very advantageous.

Trading platform:

Fidelity Investments has given us a sophisticated trading platform with four tabs namely research, Trading Tools, Advanced Trading and Monitoring.  In the research area the analysts are ranked according to their historical prediction accuracies, giving the investor access to most trustful analysts. The Stock Screeners filter the stocks based on about 140 criteria right from fundamentals, technical measures, volume data, environmental and social ratings. The third party research provided is quite exhaustive and best of the breed with information from firms like S&P equity research, Barclay’s capital and so on.

Coming to the trading tools area, there are margin calculators for each security which avoid manual calculation and save time for the investors. Also various trade tools discussed in the above section are present in this location.

Additionally, Fidelity Investments provides options pairing tool or strategy evaluator in Advanced Trading that enables an options trader to test and calibrate his/her options trading strategy thereby minimizing his/her trading losses and maximizing the profit.

Customer Care

Fidelity Investments provides world class customer care services. There is 24/7 online and on phone support available. The executives are highly trained and apart from that there are specialist services available for complex needs.

The final word

Fidelity Investment is one of the best brokerage houses if a customer is looking for professional advice along with the trading facility. Its third party research is best of the breed and very exhaustive. However if a person(e.g. a newbie trader) is looking for low commissions and trades intermittently, Fidelity Investment is not the most appropriate brokerage house for him as he would not prefer flat rates, he would opt for commission charges based on the transaction amounts instead.

Fidelity Investments offers a great range of products and services that enables you to develop investment portfolio based on your investment philosophy.


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