Strong offering of third-party research; local branch offices; extra services for banking, retirement, etc.
Need to make 120-plus trades per year + $25K minimum account balance to utilize top Active Trader Pro platforms; tools for options traders limited.
Investors who prefer an emphasis on in-depth research versus trade platforms and tools.
|Commissions & Fees|
|Platform & Tools|
|Ease of Use|
2013 Review Star Ratings
N/A - Not Applicable
|10th||Commissions & Fees|
|10th||Platforms & Tools|
N/R - Not Ranked in Top 10
N/A - Not Applicable
Ask most investors if they have heard of Fidelity Investments, and the answer is almost always yes. Fidelity is a huge brand, perhaps the largest based on total assets alongside Charles Schwab, and one of the largest brokers as far as total clients goes along with TD Ameritrade and ETRADE.
As a full-service broker with millions of clients and ample service offerings, it is no surprise that providing top-notch research is the No. 1 priority. Investment guidance and retirement services are two other monster parts of Fidelity’s business, which this review will take a closer look at.
Commissions & Fees
Fidelity, like its closest competitors, uses a simple flat-fee trading commission structure. Stock trades are $7.95, and option trades run $7.95 + $.75 per contract, which are rates very similar to what would be found at TD Ameritrade, ETRADE, Charles Schwab and Scottrade.
One standout feature for Fidelity: Among the big online brokers, Fidelity has the lowest margin rates, with ETRADE not much further behind (full margin rate schedules can be viewed and compared using the Compare Tool).
|Fidelity||TD Ameritrade||Etrade||Charles Schwab||Scottrade|
|Mutual Funds ($)||$75.00||$49.99||$19.99||$76.00||$17.00|
Fidelity offers 30 commission-free ETFs from iShares, which is decent but lower than some of its peers. For example, TD Ameritrade offers more than 100.
Lastly, Fidelity offers checking accounts, savings accounts, credit cards and debit cards, but no home mortgages. Its credit cards in particular stand out in the area of rewards. Next to Capital One ShareBuilder, the offers are the best in the brokerage space.
Research, Ease of Use
Fidelity’s shining star is its research, and this should come as no surprise. We were extremely impressed with the overall depth and scope of what is available. Some could argue that, at times, the amount of research is over-done.
Take, for example, equities research. Pull up a quote of Apple (AAPL) and you will find an Equity Summary Score alongside 13 different third-party research reports to navigate through, the largest of any broker. ETFs are not left out either, as we found six total third-party research reports available for SPY.
The primary research provider for ETFs and mutual funds, as far as key data and ratings goes, is Morningstar. Morningstar is our favorite provider for fund research, and all the big brokers use them. We've found their screeners to be more thorough, the data to be more visually appealing and unique tools such as the fund StyleMaps to be great.
While the research areas are fairly straight-forward and easy-to-navigate, the rest of the site is a mess. Fidelity ranks lowest among its competitors for ease-of-use, mostly because of its outdated website and extremely small navigation menu.
Perhaps it is because of the vast amount of information that the broker feels it needs to make links small and difficult to find. Sadly enough, during our endless hours on the Fidelity website, we ended up figuring out that Googling the information we were looking for would lead us to the proper page on Fidelity faster than trying to navigate to it ourselves. It's that bad.
Customer Service, Education
When reviewing Fidelity customer service, we expected great results, and great results are what we ended up with. This year Fidelity ranked No. 3 overall in customer service, giving us consistently high-quality service, regardless if we were on the phone, emailing in or utilizing live chat. The only competitor to best Fidelity was TD Ameritrade, which placed No. 1 this year.
In the area of education, Fidelity does a great job of breaking up content into Courses, sorted by experience level and content type. There were only eight formally organized courses found in early January, and no advanced content was found. Lessons within each course can be marked as completed to make progress tracking simple. Despite the lack of depth, it was clear to see that a solid foundation was in place for the future.
Beyond courses, we would have liked to see archived investment education webinars. The broker provides webinars throughout the year, and hundreds of seminars through its network of local branch offices, which is great, but having access to on-demand quality education is important to round out the offering.
Fidelity does provide active trader services, including both a desktop- and web-based platform. Active Trader Pro, the destkop platform requires at least 36 or more qualified trades in a rolling 12-month period for access, and the browser-based requires 120 trades.
While the platform offers some unique tools such as Recognia chart pattern recognition, overall, when compared to the rest of the competition, the platform is just okay. TD Ameritrade's thinkorswim, ETRADE Pro and Schwab's StreetSmart Edge all have Fidelity cleanly beat in this department.
When it comes to mobile, Fidelity fares better. We found the iPhone app to be easy-to-use and bug-free. The broker does an especially great job with integrating its banking services into its trading app, something that takes a lot of time and is difficult to do with success. Our favorite feature was the customizable "homescreen cards," allowing for a quick overview of all client products upon log-in.
Looking at ahead at 2013, we would love to see Fidelity continue to innovate and push forward with its mobile trading offering, as well as its interactive education capabilities. Also, a new website design would be huge and certainly welcomed by all of its clients.
Overall, Fidelity Investments is a very well respected broker, competing among the largest brands in the online broker space. The backbone of its success, specialty services and research, will certainly continue to be front and center for many years to come.
Compare Fidelity Investments to Key Competitors
Trade Commissions Breakdown
|$7.95||Flat-Fee Trade Plan*|
|N/A||Per-Share Trade Plan|
|$7.95||Options Base Trade Fee*|
|$7.95||Options Exercise Fee|
|$7.95||Options Assignment Fee|
|$75.00||Mutual Fund Trade Fee|
|$32.95||Broker Assisted Trade Fee|
|$1.00||Bond Trade Fee|
|$0.00||Treasury Trade Fee|
|$0.00||Certificate of Deposit (CD) Trade Fee|
|$12.95||Interactive Voice Response (IVR) Phone Trade Fee|
|$0.00||IRA Annual Fee|
|$50.00||IRA Closure Fee|
|$7.95||Forced-Margin Sellout Fee|
|$0.00||Returned ACH Fee|
|$0.00||Returned Wire Transfer Fee|
|$0.00||Stock Certificate Processing Fee|
|$100.00||Stock Certificate Delivery Fee|
|$0.00||Paper Statement Fee|
|$0.00||Paper Confirmation Fee|
|$15.00||Outgoing Domestic Wire Transfer Fee|
|$0.00||Outgoing International Wire Transfer Fee|
Fidelity requires no minimum deposit to open an account. To trade mutual funds a $2,500 minimum deposit is needed and for margin trading a $5,000 minimum deposit is required.
Stock Trades: Online trades are $7.95. Fidelity applies a very straight forward flat-fee based commissions structure without any catches or fine print notes. There are no limits on total trade size or price. Furthermore our research found no additional fees or charges for trading stocks under $1 or trading during pre and post market hours.
Fidelity offers 30 iShares ETFs commission free. There are no fees for selling one of these ETFs within 30 days of purchase.
Options Trades: Options trades cost $7.95 + $.75 per contract. Any exercise and assignment is $7.95.
Mutual Funds: Through the Fidelity FundsNetwork investors have access to over 4,900 mutual funds. While Fidelity does offer No Transaction Fee (NTF) funds, mutual fund transactions are otherwise pricey at $75 per order. Broker assisted funds purchases are also expense costing .75% of the total principal amount, $100 minimum up to $250 maximum.
2013 Review Results - Fidelity was awarded Best Retirement Services, Best iPad App, and rated 4.5 stars for Research and Offering of Investments. Read the 2013 Broker Review.
Misc. Account Information
|National Financial (Fidelity)||Clearing Firm|
|31||No. of Commission-Free ETFs|
|179||No. of Retail Locations|
|8212||No. of Mutual Funds (w/ Load)|
|1772||No. of Mutual Funds (No Load)|
|13||No. of 3rd Party Research Report Providers|
|4||Max. No. of Legs (Complex Options)|
|No Minimum Deposit|
|No Maintenance Fees|
|Online Trader Community|
|Live Chat Support|
|24/7 Customer Support|
|Long Term Trading|
|Credit Card Accounts|
|Debit Card Accounts|
Trading Platform Features
|Web Browser Platform|
|Windows Desktop Platform|
|Mac Desktop Platform|
Active Trading Features
|Direct routing offered to clients|
|Broker receives payments for order flow|
|Broker internalizes trades|
|Clients receive rebates for adding liquidity|