Robo-Adviser: Fidelity Investments' Automated Investment Strategy

Fidelity Go is Fidelity's robo-advisor service. It is a digital financial service that makes investing quick, easy, and affordable. It uses technology to manage investments on your behalf, based on your goals and preferences. Fidelity Go is a good option for beginners as it has a low minimum account balance of $10 and no advisory fee for balances under $25,000. For balances of $25,000 or more, there is an advisory fee of 0.35% per year and access to unlimited coaching calls with trained advisors.

What is a robo-advisor?

A robo-advisor is a digital platform that provides automated, algorithm-driven financial planning and investment services with little to no human supervision. It is an affordable digital financial service that uses technology to help automate investing, based on information provided by the investor about themselves, including their risk tolerance and financial situation.

Robo-advisors typically start by asking the investor a series of questions—online or through an app—about their current financial situation, goals, and tolerance for investment risk. The robo-advisor then uses this information to suggest a mix of investments to support the investor's goals and objectives. It creates and maintains a portfolio that aligns with the suggested investment strategy.

Robo-advisors also monitor the markets and automatically rebalance the investor's portfolio by buying and selling investments to keep it in line with the chosen strategy and market conditions. This helps the investor stay on track towards their financial goals.

Robo-advisors are often inexpensive, with low opening balance requirements, making them accessible to retail investors. They are best suited for traditional investing and may not be the best option for more complex issues, such as estate planning.

Fidelity's robo-advisor, Fidelity Go®, is an example of a hybrid robo-advisor, combining digital investment advice with access to live, personalized financial coaching via telephone for clients with balances of $25,000 or more.

How does a robo-advisor work?

A robo-advisor is a digital platform that provides automated, algorithm-driven financial planning and investment services with little to no human supervision. They are designed to deliver advice digitally based on inputs received from the investor.

Robo-advisors use algorithms to understand and predict investor preferences, risks, and goals. They do this by asking a set of psychographic and demographic questions, which leads to a model portfolio. The most basic profile questionnaire will include queries on gender, income, liabilities, willingness to take on risk, and current asset allocation.

Robo-advisors then use that information to suggest an investment strategy. Investment strategies can include a mix of different types of investments, and many robo-advisors include account rebalancing services to help investments stay in line with financial goals and preferences.

Robo-advisors are often inexpensive and require low opening balances, making them available to retail investors. They are best suited for traditional investing and aren't the best options for more complex issues, such as estate planning.

Fidelity's robo-advisor, Fidelity Go®, is a hybrid robo-advisor, which combines a robo-advisor with live, personalized financial coaching. This means investors will have the chance to ask questions, exchange ideas, and discuss their goals with a real person.

Fidelity Go®: Fidelity's robo-advisor

Fidelity Go® is a robo-advisor service provided by Fidelity that offers a digital financial service to make investing quick, easy, and affordable. It is a low-cost and easy-to-use platform aimed at new investors.

Fidelity Go® works by first asking you a few questions about yourself and your individual financial goals. It then suggests an investment strategy for your account and manages your money in accordance with your goal, helping you track your progress. You can add money to your account at any time, and once your account balance reaches $10, Fidelity Go® will start investing for you. You can also set up or modify recurring monthly, bi-weekly, or weekly transfers.

Fidelity Go® offers tiered pricing based on your account balance. There is no advisory fee for balances under $25,000, and a 0.35% annual fee for balances of $25,000 or more. There are no trading fees, transaction fees, or rebalancing fees.

Fidelity Go® handles all day-to-day investing decisions for your account and will suggest an initial investment strategy based on information you provide, such as your financial goals, time horizon, and comfort with risk. It will then buy and sell investments in your account to maintain this investment strategy, a process known as "rebalancing". It will also invest any contributions you make over time according to the chosen investment strategy and keep you informed about how your investments are doing.

Fidelity Go® also offers financial coaching sessions with trained advisors once your account reaches $25,000. These advisors can help with creating a budget, paying down debt, retirement planning, and investing for your future.

Overall, Fidelity Go® is a strong, low-cost choice for investors who want an all-digital robo-advisor, especially for those who are already Fidelity customers or who want human portfolio oversight. However, it does not offer tax-loss harvesting, which may be a drawback for investors with taxable accounts.

How does Fidelity Go® work?

Fidelity Go® is a robo-advisor service that makes investing quick, easy, and affordable. It is a digital financial service that uses technology to automate investing based on information provided by the investor.

To get started with Fidelity Go®, you answer a few questions about yourself and your individual financial goals. This information is used to suggest an investment strategy for your account. Once your account is open, you can add money to it. When your account balance reaches $10, Fidelity Go® will start investing for you. You can set up or modify recurring monthly, bi-weekly, or weekly transfers at any time.

Fidelity Go® will manage your money in accordance with your goals, helping you track your progress. It will suggest an initial investment strategy or mix of stocks and bonds in your account, according to the information you provide, such as your goal, time horizon, and comfort with risk. It will then buy and sell investments in your account to maintain this investment strategy, a process known as "rebalancing". Any contributions you make over time will be invested according to the investment strategy you've chosen.

Fidelity Go® will also keep you informed about how your investments are doing and remind you each year to review and update the information you've provided. Once your account reaches a balance of $25,000, you will have access to unlimited coaching sessions with trained advisors. These sessions can cover budgeting, managing debt, retirement planning, and investing for your future.

Fidelity Go® offers tiered pricing based on your account balance. There is no advisory fee for a balance under $25,000, and a 0.35% annual fee for balances of $25,000 or above. There are no trading fees, transaction fees, or rebalancing fees. Your account will hold a combination of Fidelity Flex® mutual funds, which generally hold domestic stocks, foreign stocks, bonds, or short-term investments.

How much does Fidelity Go® cost?

Fidelity Go® offers a tiered pricing system based on your account balance. If your balance is under $25,000, you pay no advisory fee. For balances of $25,000 and above, you will be charged an advisory fee of 0.35% per year. There are no trading, transaction, or rebalancing fees.

Fidelity Go® does not charge any account fees or require a minimum initial investment to open an account. However, to start investing, your account balance must be at least $10. The minimum account balance to access financial coaching with trained advisors is $25,000.

Fidelity Go® customers have access to Fidelity Flex® Funds, which are Fidelity mutual funds that do not charge management fees.

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