Fidelity Investments: A Trusted Financial Partner?

Fidelity Investments is a well-known name in the world of investing, particularly in the US, and is considered a good choice for both beginner and advanced investors. With a long history dating back to 1946, the company offers a wide range of financial planning and investment services, including robo-advisor and advisor-led wealth management accounts.

Fidelity provides commission-free trading for US stocks, ETFs, and options, as well as a large selection of no-transaction-fee mutual funds. It also offers international stock trading in over 25 countries and 16 currencies, catering to investors looking to diversify their portfolios globally.

The company has a strong reputation for its mutual funds and is known for its investor-friendly practices, such as zero-expense-ratio index funds. In addition, Fidelity provides extensive research and educational resources suitable for all levels of investors, from retirement investors to active stock traders.

When it comes to trustworthiness and security, Fidelity has a long history of safeguarding customer data and offers various protection features, including encryption software, intrusion protection systems, and firewalls. The company also encourages users to enhance security with features like multi-factor authentication.

However, it's important to consider that some customers have expressed dissatisfaction with Fidelity, particularly regarding slow deposit and withdrawal processes, high fees for certain mutual funds, and issues with customer service.

Overall, Fidelity is a trusted and reputable investment broker that caters to a wide range of investors, offering comprehensive services and tools for those starting their investment journey or those looking for more advanced trading strategies.

Fidelity's reputation for trustworthiness and security

Fidelity is a well-known and trusted investment broker with a long history of providing reliable services to its clients. The company was founded in 1946 and has since built a reputation for offering a wide range of investment options, robust trading tools, and competitive pricing. Here is an overview of Fidelity's trustworthiness and security:

Trustworthiness

Fidelity is committed to transparency and trustworthiness in its dealings with clients. The company provides clear and easily accessible information about its fees, pricing, and trading technology. This transparency ensures that clients understand the costs associated with their investments and can make informed decisions.

Fidelity also has a strong reputation for its mutual funds. They offer a large selection of no-transaction-fee funds, including the Fidelity Zero index funds, which have no expense ratio and no minimum investment requirement. This approach saves customers a significant amount of money and makes Fidelity a trusted choice for mutual fund investors.

In addition, Fidelity offers extensive educational resources and research tools that cater to both beginner and advanced investors. The company's online learning centre utilises machine learning to provide customised educational materials that match each customer's investing behaviour. This personalised approach to investor education further enhances Fidelity's trustworthiness.

Security

Fidelity prioritises the security of its clients' information and investments. They employ various measures to protect sensitive data, including encryption software, intrusion protection systems, proxy servers, firewalls, and advanced anti-malware. The company also encourages users to enhance their security by enabling multi-factor authentication, money transfer lockdown, and biometrics.

Fidelity regularly trains its associates on the latest security policies and data protection practices to ensure that everyone is aware of and compliant with the most up-to-date security protocols. This ongoing training helps maintain the security of client information.

In terms of investor protection, Fidelity is regulated by top-tier financial authorities and offers a high level of investor protection. For US customers, Fidelity Brokerage Services LLC provides protection under the US investor protection scheme, the Securities Investor Protection Corporation (SIPC). The SIPC protects against the loss of cash and securities in the event that the broker fails, with a limit of $500,000 in coverage, including $250,000 for cash.

Fidelity also provides additional coverage beyond the SIPC limits. They offer an extra $1 billion in coverage at the company level, with no per-customer limit on securities. There is, however, a $1.9 million coverage limit on cash per account. Furthermore, Fidelity's Customer Protection Guarantee reimburses customers for losses resulting from unauthorised activity in their covered accounts, providing an additional layer of security.

While Fidelity has a strong reputation for security and trustworthiness, it is important to note that there have been some concerns and legal cases regarding data breaches and allegations of inadequate security measures. These issues are exceptions to Fidelity's otherwise positive track record in security and trust.

Fidelity's fees and commissions

Fidelity Investments offers a range of fee structures and commissions depending on the type of account and the nature of the investment.

Fidelity offers $0 trading commissions on US stock, ETF, and options trades. Options trades carry a $0.65 per-contract charge, which is considered high compared to other brokers. There are no account fees, and no minimum balance is required to open a retail brokerage account, including IRAs.

For bonds, there is a $0 fee for US Treasury bonds and a $1 per bond charge (with a $250 maximum) for other bonds.

Fidelity offers thousands of mutual funds with no transaction fees, and nearly 950 funds with expense ratios of 0.50% or less. There is no fee to buy Fidelity mutual funds, but there is a charge of between $49.95 and $75 to buy other funds, and a $49.95 fee on redemption if held for less than 60 days.

Margin rates are competitive and vary according to the market interest rates and debit amount, currently ranging from 8.25% for a $1 million or more debit balance to 12.575% for borrowing up to $24,999.

Fidelity also offers commission-free trading of cryptocurrencies Bitcoin and Ethereum through a separate crypto account. These trades have a 1% spread built-in, and no additional trading fees.

There are no charges for most account services such as statements, confirmations, and IRA withdrawals. Cash management services are also free, including bill pay, returned check, and stop payment. There are a few fees for less common activities, such as $100 for a stock certificate transfer, a $50 foreign settlement fee per trade, and a $19.95 transaction fee for representative-assisted treasury auction orders.

Fidelity also offers a range of managed account services with advisory fees depending on the level of service and the balance of the account.

Fidelity's investment accounts and services

Fidelity offers a wide range of investment accounts and services, with no fees or minimums to open a retail brokerage account. Here is an overview of the different types of accounts and services they provide:

Brokerage Accounts

The Fidelity Account® is a multi-feature trading and investing account that allows you to select from a broad range of investment choices, including stocks, bonds, ETFs, options, and mutual funds. You can invest with as little as $1 and there are no account fees or minimums to open an account.

Retirement Accounts

Fidelity offers various retirement accounts, including Traditional IRA, Roth IRA, Rollover IRA, and Inherited IRA. These accounts offer potential tax-free growth and withdrawals, and there are no account fees or minimums required to open them. You can also consolidate your old 401(k) and workplace accounts into a centralized account without taxes or penalties.

Cash Management Accounts

The Fidelity Cash Management Account offers all the features of a traditional checking account but with more competitive rates on your cash. There are no account fees or minimums, and you get global reimbursement on ATM withdrawals, a free debit card, check writing, and Bill Pay.

Health Savings Accounts (HSA)

Fidelity offers HSAs that allow you to invest your health savings for potential tax-free growth. There is no investment minimum, and there may be no fees depending on the investments you choose.

Custodial Accounts

The Fidelity Youth® Account is designed for teens aged 13 to 17, who can learn to save and invest with as little as $1. There are no account or subscription fees for this service.

Robo-Advisor Accounts

Fidelity Go® is a robo-advisor service that handles your investments for you. There is no minimum to open an account, and fees are $0 for under $25,000 and 0.35%/year for balances over $25,000.

Trust and Estate Accounts

Fidelity offers trust and estate accounts that allow you to invest and manage a brokerage account on behalf of an established trust or estate.

Annuities

Fidelity offers various annuity products, including deferred fixed annuities, immediate fixed income annuities, and variable annuities, which provide a guaranteed stream of income for a set period or for life.

Life Insurance

Fidelity offers term life insurance with coverage options ranging from $250,000 to $10 million.

Crypto Accounts

Fidelity Crypto® allows you to trade bitcoin and ethereum with a minimum investment of just $1.

Other Services

In addition to these accounts, Fidelity provides access to a wide range of investment choices, including stocks, options, mutual funds, and exchange-traded funds (ETFs). They also offer managed accounts, where professionals manage your investments for you, and basket portfolios, which allow you to create your own custom index of stocks and ETFs.

Fidelity also provides extensive educational resources, research tools, and trading platforms to help you make informed investment decisions.

Fidelity's trading platforms and tools

Fidelity offers a range of trading platforms and tools to cater to the needs of investors at all levels of experience. These include:

• Fidelity.com: A web-based platform that provides award-winning research, in-depth analytics, and idea generation tools, integrated with an easy-to-use trading ticket.
• Active Trader Pro: A downloadable desktop platform with advanced screeners, research and strategy-testing tools based on 10 years of historical data. It includes intuitive shortcuts, a 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 simultaneously.
• Fidelity Mobile: An easy-to-use, award-winning app that allows users to view, manage, and act on their investment portfolios 24/7. The app includes a customizable newsfeed and the ability to schedule appointments with a Fidelity advisor.

Fidelity's platforms provide access to a wide range of investment options, including stocks, bonds, mutual funds, ETFs, options, forex, and cryptocurrencies. The company also offers a comprehensive suite of research and educational tools, such as stock and ETF screeners, analyst ratings, and third-party research reports. In addition, Fidelity provides 24/7 customer support through various channels, including phone, email, chat, and in-person at over 200 branches.

Fidelity's customer service

Fidelity has over 200 investor centres across the US and a network of more than 200 branches for in-person advice. The company also provides educational tools and resources for investors, including its Online Learning Centre, which uses machine learning to provide customers with educational materials that match their investing behaviour.

Frequently asked questions