Fidelity Investments, founded in 1946 and headquartered in Boston, has 27 million customers with $2.5 trillion in assets under management as of March 2018. If you’re thinking about placing your retirement assets with the brokerage firm, here’s what you need to know.

Product Offerings

For retirement savings, Fidelity offers traditional IRAs, Roth IRAs and rollover IRAs.  For small business owners, Fidelity has SEP IRAs, SIMPLE IRAs, independent 401(k)s, investment-only retirement accounts and 401(k) plans. Fidelity will help you transfer your IRA from another provider or roll over your 401(k) from a former employer.

For retirement income, Fidelity offers an individual retirement annuity, deferred fixed annuities, deferred income annuities and immediate fixed-income annuities.

Fidelity also has suggested portfolios based on risk tolerance that you can put together yourself. For example, if you’re a conservative investor, Fidelity suggests a list of its stock and bond funds and what percentage of your portfolio you should allocate to each. 

Investment Selection

Fidelity customers can invest in mutual funds, exchange-traded funds, stocks, bonds, certificates of deposit and options. The company offers its own mutual funds but also allows clients to purchase funds from other companies, resulting in more than 10,000 mutual fund offerings. Fidelity Freedom Funds are target-date funds designed to take the guesswork out of constructing a portfolio; the company selects each fund’s holdings based on an anticipated retirement date. Putting together a diversified portfolio is also easy with Asset Manager Funds, which offer considerable flexibility through asset allocation choices that are based on how conservative or aggressive you want to be. 

Personalized Advice

Fidelity offers managed accounts for customers who prefer that someone else handle their retirement portfolio. There are different levels of managed accounts, including the low-cost Digital Advisor, and Fidelity’s Portfolio Advisory Service and Separately Managed Accounts, which offer access to a registered investment advisor.  

Even if you don’t have a managed account and have a low account balance, you can get free guidance from Fidelity in person, online or by phone on matters including choosing investments and retirement planning.  Dedicated financial consultants are available to investors with large balances.

Account Minimums and Investment Minimums

In August 2018, Fidelity announced it would allow investors to open accounts with no minimum investments and require no investment minimums on a number of retail and advisor mutual funds.

If you want to use one of Fidelity’s managed accounts, you’ll need to invest at least $50,000 for the Fidelity Portfolio Advisory Service and at least $200,000 for a Separately Managed Account. To qualify for a dedicated financial consultant, you’ll need at least $250,000 in assets.

Fees

There is no annual fee or cost to open a traditional, Roth, SEP, SIMPLE or rollover IRA. The fee for Fidelity’s managed accounts ranges from 0.2% to 1.5% annually based on account type and total assets invested. 

Trading fees vary depending on the security. As of November 2018, online stock or option trades cost $4.95 each, and bond trades were $1. Some ETFs also cost $4.95 to trade, but Fidelity offers many commission-free ETFs. The firm also has hundreds of mutual funds that are free to trade. 

Expense Ratios

Expense ratios vary by product. Extremely low-cost funds are available, especially if you have at least $10,000 to invest. And Fidelity now offers zero expense ratio index mutual funds.

Reputation

J.D. Power’s 2018 Self-Directed Investor Satisfaction Study, which surveyed more than 5,500 investors who make investment decisions without help from a personal financial advisor, gave Fidelity an average rating. The brokerage received a 3-out-of-5 rating for overall satisfaction, account information, firm interaction, information resources and product offerings. It a 2 out of 5 for commissions and fees.

Safety

Any cash deposits you hold at Fidelity, up to $250,000 per account, are FDIC insured because Fidelity offers banking services in addition to brokerage services. Your brokerage account securities are covered by the Securities Investor Protection Corporation (SIPC), a nonprofit organization that covers up to $500,000 in securities losses and up to $250,000 in cash if the firm goes bankrupt and your assets go missing.

Fidelity also offers excess SIPC coverage, which provides $1 billion in additional coverage to Fidelity customers as a whole, without per-customer limits. Additionally, because any mutual fund shares you own are held by a third-party custodian, neither Fidelity nor its creditors can take ownership of them if Fidelity runs into financial problems. Lastly, Fidelity is registered with the Securities and Exchange Commission and is a member of the Financial Industry Regulatory Authority (FINRA).

If your account loses money because the market declines or you make poor investment decisions, you’re out of luck—there’s no insurance for that, no matter which brokerage holds your money. (For more, see Are My Investments Insured Against Loss?)

The Bottom Line

Fidelity has a solid reputation for retirement services and good customer reviews. Most people planning for retirement will find what they need at this brokerage. 

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