Fidelity Investments: Assessing Financial Solvency And Performance

Fidelity Investments is one of the largest asset managers in the world, with $5.8 trillion in assets under management and $15 trillion in assets under administration as of September 2024. The company operates a major brokerage firm, manages mutual funds, provides investment advice, and offers retirement services, among other financial services. With a long history dating back to 1946, Fidelity has established itself as a trusted and reputable name in the industry. The company has consistently received high ratings from independent reviewers and is well-known for its commitment to providing straightforward pricing and strong customer service. In terms of solvency, Fidelity has a strong financial position, as evidenced by its significant assets under management and administration. The company has also demonstrated steady growth, with a 26% increase in assets under management in 2019, contributing to increased revenue and operating income.

Fidelity's fees and commissions

Fidelity Investments offers commission-free trading for US stocks, ETFs, and options. However, options trades carry a $0.65 per-contract charge, which is relatively high compared to other brokers. While there are no account fees or minimums to open a retail brokerage account, margin rates and fees for some mutual funds can be high. Fidelity's USD margin rate fees are calculated as follows: Base rate + tiered markup, with the markup being +1.25% for a balance of 0-25k.

Fidelity also offers a range of no-transaction-fee mutual funds, including its own Fidelity Zero index funds, which have no expense ratio and no minimum investment requirement. These funds include 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.

For non-Fidelity mutual funds, there is a $49.95 fee on redemption if held for less than 60 days, while transaction-fee non-Fidelity funds incur a $49.95 fee per purchase. Certain funds will have a transaction fee of up to $100.

Fidelity's current base margin rate, effective since December 20, 2024, is 11.325%. The 8.25% rate is available for debit balances over $1,000,000.

Fidelity also charges a small activity assessment fee of $0.01-$0.03 per $1,000 of principal on sell orders. Additionally, non-USD wire withdrawals incur a 3% fee.

Overall, Fidelity has average trading and low non-trading fees, with commission-free trading for US stocks and a range of no-expense-ratio index funds.

Investment options

Fidelity offers a wide range of investment options to its customers, making it a good choice for both beginner and advanced investors. Here are some of the investment options available:

• Stocks and ETFs: Fidelity offers commission-free trading on US stocks and ETFs, making it a cost-effective option for investors. International stock trade fees are, however, relatively high.
• Mutual Funds: Fidelity has a strong reputation for its mutual funds, offering a large selection of no-transaction-fee funds, including its Fidelity Zero index funds, which have no expense ratio and no minimum investment requirement.
• Options: Fidelity offers options trading, although there is a $0.65 per-contract charge, which is considered high compared to other brokers.
• Bonds: Fidelity offers a substantial selection of bonds, including FDIC-insured CDs and bond funds. Investors can also buy over 100,000 individual bonds, including corporate, municipal, and government bonds.
• Forex: Fidelity offers forex trading.
• Cryptocurrency: Fidelity launched a separate entity dedicated to institutional crypto-asset custody and cryptocurrency trading in 2018. It currently offers trading in three cryptocurrencies: Bitcoin, Ethereum, and Litecoin.
• Fractional Shares: Fidelity allows traders to purchase fractional shares, enabling investors to diversify into higher-cost stocks by buying a slice of a share.
• Retirement Accounts: Fidelity offers various retirement account options, including Roth and traditional IRAs, and several types of IRAs geared towards self-employed individuals.
• Cash Management: Fidelity offers cash management products to help individuals save and spend smarter, such as the Fidelity Cash Management Account, which is an alternative to a checking account.

Trading platforms

Fidelity offers a range of trading platforms to cater to different levels of trading experience, from beginners to advanced traders. Here is an overview of the different trading platforms provided by Fidelity:

Fidelity Mobile App

The Fidelity mobile trading app is available for both iOS and Android users. It provides real-time quotes, multi-leg options trading, and a consolidated version of the company's research offerings. The app also includes a notebook feature, allowing users to save ideas and articles from their mobile browser. The app has been streamlined and simplified to support better trading, portfolio monitoring, and research. It is highly rated by users and allows for customisation of newsfeeds and scheduling appointments with existing Fidelity advisors.

Fidelity.com

Fidelity's online trading platform offers an intuitive and easy-to-use interface, allowing users to quickly explore investment offerings and compare investments. It provides real-time market data, research ideas, and the ability to execute trades. Fidelity's online platform is suitable for both advanced traders and beginners looking for a comprehensive view of their finances.

Active Trader Pro

Active Trader Pro is a downloadable desktop platform for active traders and experienced investors. It offers advanced features such as intuitive shortcuts, pre-built market and technical filters, advanced options tools, and a multi-trade ticket that can store orders for later execution. The platform also enables users to trade over-the-counter securities and access IPOs. While it provides robust functionality, the platform can be slow to load when opening new windows or cross-linking to the web-based platform.

Trading Dashboard

The Trading Dashboard is a single-screen platform that provides real-time market data, custom watchlists, and trade execution capabilities. It works on any browser and is recommended for intermediate to advanced traders.

Customer service

Fidelity Investments offers a range of customer service options to its clients. The company provides a Virtual Assistant, a natural language search engine, designed to help customers with their requests 24/7. This can be used to find information on the Fidelity website, but it is important to note that it should not be used for inputting or storing personal or account information.

Fidelity also offers live chat with its team, providing specialised support for accounts or technical issues. This is available Monday to Friday from 8 am to 10 pm Eastern Time, and on weekends from 9 am to 4 pm Eastern Time. The company also provides a phone service, with different numbers for different departments, which is available 24/7.

For those with specific crypto queries, there is a Crypto Help Desk, which provides answers to questions, resources, and information on how crypto trading works at Fidelity. Additionally, the company has a presence on various social media platforms, including Reddit, Facebook, Twitter, Instagram, Discord, and YouTube, where customers can ask questions and interact with Fidelity associates.

Fidelity also offers an Online Learning Centre, which provides educational articles and videos on a range of financial topics. The company's website also features a comprehensive FAQ section, with answers to common queries on various topics, including technical support, account management, and tax forms.

For those who prefer in-person support, Fidelity has a network of over 200 branches where customers can receive advice and educational support. The company also provides a mailing address for customers to send forms or documents.

Fidelity's customer service extends to its mobile app, which includes features such as real-time quotes, multi-leg options trading, and a consolidated version of the company's research offerings. The app also allows customers to schedule appointments with their Fidelity advisor.

The company's commitment to customer support is further demonstrated by its Customer Protection Guarantee, which offers reimbursement for any financial losses resulting from unauthorised activity on customer accounts. This guarantee is in addition to the Securities Investor Protection Corporation (SPIC) insurance and Federal Deposit Insurance Corporation (FDIC) insurance that cover brokerage accounts and uninvested cash balances, respectively.

Security and insurance

Fidelity Investments is committed to high-level security and is transparent about its fees and pricing. The company regularly monitors accounts for unusual activity and has updated its security protocols to require that third-party websites and apps connect through a secure connection. Through the Security Centre, users can manage multi-factor authentication, manage Symantec VIP Access, report security issues, receive security text alerts, manage access granted to third parties, set up trusted devices, block electronic money transfers from their accounts, and sign up for account activity alerts.

Fidelity is insured through the Securities Investor Protection Corporation (SPIC) up to $500,000 in securities, with a $250,000 limit for cash held in a brokerage account. The company also holds additional insurance for assets up to $1 billion. This insurance protects your money in the event that Fidelity fails or goes bankrupt, but not against losses in the investment markets. Cash accounts are also insured through the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account.

Fidelity's assets under management climbed 26% in 2019 to a record $3.2 trillion, which helped boost revenue to $20.9 billion and operating income to $6.9 billion. As of September 2024, Fidelity Investments had $5.8 trillion in assets under management and $15 trillion in assets under administration.

Frequently asked questions