E*TRADE Core Portfolios and Fidelity Go are very competitive offerings in the robo-advisory space. On the surface, there are many similarities. Both firms have similar account setup processes and populate a portfolio made up of low-cost funds. Neither is particularly strong in terms of goal planning, but they have a wealth of resources and tools available through their wider product offerings. There are, however, some key differences that matter when choosing between E*TRADE Core Portfolios and Fidelity Go to manage your money.
- Account Minimum: $500
- Fee: 0.30%
- Aimed at investors who want an easy way to get their cash working in the markets
- Easy for those who were customers of the standard E*TRADE platform to create a Core Portfolios account
- Clients can select socially responsible or smart beta investments
- Account Minimum: $0 to open an account, $10 to be invested
- Fee: 0.35%
- Great for those who would like to get an investment account set up quickly and efficiently
- Low account minimum is great for people that aren't ready to invest a large sum
- Those worried about fees will appreciate Fidelity's transparency
As mentioned, neither Fidelity Go nor E*TRADE Core Portfolios are standouts in goal planning and tracking, but Fidelity Go has the edge overall.
E*TRADE’s robo-advisory service is not driven by goal planning. You create a single pot of money to fund all of your goals. According to E*TRADE officers, their clients felt that having a variety of separate goals just muddied the waters and made the experience more confusing. However, clients have access to all of E*TRADE’s research and education offerings, which include some planning tools, but these functions are not built into the Core Portfolios experience. The reporting on your progress towards the single goal you have defined is well-designed, but you’re not given suggestions for shoring up the account if you’re falling behind. If you have other E*TRADE accounts, you can see how your overall holdings at the firm are performing, but you can’t import assets from other financial accounts for a complete picture.
You can only track a single goal per account using Fidelity Go, but you can open multiple accounts if you want to dedicate funds to separate goals. Once the account has been funded and invested, you can choose a dollar amount you're trying to reach along with your target date. Fidelity then estimates the likelihood of reaching your dollar goal by your target date, based on your initial deposit and planned monthly additions. If it looks like you may not reach your goal, Fidelity offers some suggestions of things you can do that could improve your likelihood of success. If you have other Fidelity accounts, you can see how they are all doing on a single screen. Selecting the Fidelity Go account from the list brings up an asset allocation graph and a performance summary.
Fidelity Go has a better goal-planning and tracking feature, and this carries over to retirement planning. While E*TRADE clients can use all of the broker's research and education offerings, which include retirement calculators, you cannot apply the investment account to a particular goal. Fidelity Go retirement accounts will help you keep on track by showing you the likelihood of reaching your retirement goal and how to increase it over time.
E*TRADE Core Portfolios has the edge in account types as it has all the same account types as Fidelity Go as well as custodial accounts in accordance with the Uniform Gift to Minors Act (UGMA) and Uniform Transfer to Minors Act (UTMA). E*TRADE Core Portfolios also offers a simplified employee pension (SEP) individual retirement account, and Fidelity Go does not.
E*TRADE account types:
- Individual taxable accounts
- Joint taxable accounts
- Traditional IRA accounts
- Roth IRA accounts
Fidelity account types:
- Individual taxable accounts
- Joint taxable accounts
- Traditional IRA accounts
- Roth IRA accounts
- Rollover IRA
Features and Accessibility
E*TRADE Core Portfolios and Fidelity Go have different types of features that may appeal to different kinds of investors. E*TRADE allows you to borrow against your account if the balance is above $50,000, for example, but Fidelity pays you interest on the uninvested cash in the account.
E*TRADE Core Portfolios:
- SRI and Smart Beta: Clients can select socially responsible or smart beta investments.
- Secured loans: You can borrow against the balance in your account with available funds of over $50,000, although interest rates are high.
- Easy-to-read dashboard: The digital dashboard on E*TRADE’s website or mobile app offers a clear view of portfolio performance and allocation.
- Personal help: Financial consultants are available by phone or at one of E*TRADE’s branch offices.
Fidelity Go Portfolios:
- Cash sweep: Any cash in the account is swept into a money market fund that is currently paying over 2%.
- Fidelity consolidation: If you hold multiple accounts at Fidelity, including brokerage, you can see all of your in-house holdings on one screen.
- Education resources: Once you have an account funded with Fidelity Go, all of the videos, articles, and classes published by the firm are available.
At first glance, it looks like E*TRADE Core Portfolios has the edge on Fidelity Go in fees, but the true answer is a bit more complex.
E*TRADE charges 0.30% of assets under management, assessed quarterly based on the average daily balance, deducted from available cash. Portfolios are designed to hold approximately 1% cash, mainly to cover these fees. There are no additional trading fees, but the underlying ETFs have management fees that range from 0.07% to 0.08% on average. This additional cost is subtle and actually closes the gap between E*TRADE Core Portfolios and Fidelity Go in terms of fees.
Fidelity's management fee is 0.35% of assets under management for portfolios of $50,000 or over.. There is no fee for accounts holding less than $10,000. For accounts between $10,000 -$49,999, Fidelity Go charges a subscription fee of $3 per month. The portfolios hold proprietary Fidelity no-fee mutual funds so there are really no additional fees. Many lower-fee robo-advisories, including E*TRADE, actually end up being more expensive than Fidelity Go when the average expense ratios of the underlying funds are added into the mix.
Fidelity Go has a clear advantage in terms of account minimums, with just $10 required to get started. E*TRADE Core Portfolios require a still-reasonable $500 minimum deposit, but that is fifty times more capital.
- E*TRADE's minimum deposit: $500
- Fidelity's minimum deposit: $10
E*TRADE Core Portfolios and Fidelity Go have very different portfolios, as one pulls from a proprietary list and the other from the market.
E*TRADE’s portfolios contain ETFs from iShares, Vanguard, and JP Morgan. Socially responsible portfolios include ETFs from iShares. Smart beta portfolios are designed to outperform index fund investing, and carry higher management fees. E*TRADE Core Portfolio accounts are rebalanced semi-annually, or whenever the portfolio shifts too far from its target asset allocation. The cash allocation target is 1%. The portfolio management display focuses on asset allocation and performance metrics. When you make a withdrawal, the algorithm takes out available cash first, and then sells off other investments to maintain the prescribed asset allocation. You’ll be shown a screen that indicates your potential tax bill after the sale, which is an unusual touch.
Fidelity's portfolios are invested in proprietary no-fee funds managed by Fidelity itself. Approximately 0.5% is held in cash. Portfolio rebalancing happens when cash in the account hits an internal limit (around 1%), drifts significantly from the target allocation, or semi-annually. Fidelity Go portfolios are continuously monitored, so if markets move significantly in either direction and the portfolio strays significantly from the selected investment strategy, a rebalance could be triggered.
Neither E*TRADE Core Portfolios nor Fidelity Go offer tax-loss harvesting for their account holders.
E*TRADE Core Portfolios and Fidelity Go both offer a high level of security.
E*TRADE's website and mobile apps carry a high level of encryption. Securities in accounts are insured by SIPC for up to $500,000, with excess SIPC insurance by London Insurance with an aggregate limit of $600,000,000.
Fidelity's website employs very high-security features. Mobile apps can be unlocked with a fingerprint or with facial recognition technology. Fidelity has a Customer Protection Guarantee, which reimburses you for losses from unauthorized activity in your accounts. The firm also participates in asset protection programs such as FDIC and SIPC to insure against losses should Fidelity have an unexpected financial catastrophe.
There is online chat available 24/7 on E*TRADE’s website and on mobile. Although the telephone representatives we spoke to were knowledgeable and helpful, it took an average of almost seven minutes on hold before a human was available. You can talk to a financial advisor on the phone, or walk into a brick-and-mortar location for help. Telephone service hours are weekdays from 8:30 a.m. to 8:30 p.m. Eastern time. The online FAQs are somewhat incomplete and would be easier to read if the questions were organized by topic.
Fidelity Go is a digital-only offering, so almost all support is online. You can use the chat function 24/7. The FAQs are somewhat brief, so if you have a question that requires more assistance to answer, you’ll end up in a long phone queue. Once an agent picks up the line, however, we found that our questions were answered in-depth by a knowledgeable representative.
As mentioned at the start, Fidelity Go and E*TRADE Core Portfolios are quite evenly matched as robo-advisors. Overall, however, Fidelity Go has the edge. Investors may initially balk at the proprietary funds, but this actually makes the service cheaper overall compared to E*TRADE Core Portfolios with its non-proprietary ETFs that charge modest management fees. In addition to this, the very low minimum deposit makes Fidelity Go an easy entry point for younger investors for whom an initial deposit of $500 may be a barrier. Both Fidelity Go and E*TRADE Core Portfolios are solid robo-advisors that can serve new and established investors alike, but Fidelity Go is the better choice of the two unless you are specifically looking for custodial accounts or a SEP IRA.
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