2019 Best Online Brokers Awards
Fidelity takes the top spot on our 2019 broker roundup with a combination of services, tools, and value. Most of the changes the firm made in the last year were invisible to the naked eye as Fidelity focused on improving its infrastructure and reliability so it could avoid some of the crashes that plagued them in 2018. Another improvement was making their Active Trader Pro platform available to all customers rather than requiring a certain number of trades.
Excellent trade executions
Exchange-traded fund (ETF) research is detailed
Access to Active Trader Pro for all customers
Fees are on the low side and are easy to understand
Finding a tool can be difficult
Customers may have to use multiple platforms to utilize preferred tools
Non U.S. citizens or residents cannot open an account
Fidelity has improved its entry interface and removed a couple of ways that clients could make a mistake when placing an order. For example, in the last year, Fidelity removed the “All or None” choice from a transaction for less than 100 shares of a stock or ETF because that’s not a condition you can use for such a small order. They also added a quantity calculator to the order ticket to help customers avoid exceeding their buying power. They are planning some major changes to the entire order entry process over the next year, which should improve the user experience considerably.
The way a broker routes your order determines whether you are likely to receive the best possible price at the time your trade is placed. This is called price improvement, which is, in essence, a sale above the bid price, or a buy below the offer. Fidelity’s trade execution engine gives clients a high rate of price improvement. Through the middle of 2018, for example, investors executing a 1,000 share marketable order would receive an average of $17.60 in price improvement versus the industry average of $2.92. In addition, your orders are not routed to generate payment for order flow, so that $4.95 transaction fee is a good deal.
Data streams in real time on Active Trader Pro, but on Fidelity.com you have to refresh the page to get an updated quote.
You can easily open a new account on the website or on a mobile app. There’s an order ticket available anywhere on the website by clicking on the “Trade” link, while in Active Trader Pro you always have an order entry window open. We find that the multitude of drop-down menus required to navigate around the site are clumsy and outdated, however.
Mobile and Emerging Tech
The mobile apps are much fresher and easier to use than the website, which is reflected in the 50% increase in trades placed on mobile devices between 2017 and 2018. The startup screen can be customized, and contextual help has been added to the trade ticket. Watchlists you generate on the website can be viewed on mobile devices as well, and the full range of offerings can be traded on your phone or tablet.
Range of Offerings
Fidelity offers its customers a wide range of assets to trade, including fixed income and international stocks. There are 265 ETFs you can trade for no fee, and a huge number of mutual funds from a variety of fund families. You cannot trade futures or futures options, however.
News and Research
Fidelity’s screening tools can be used to narrow down your investment choices across a wide array of asset classes, including stocks, ETFs, options, mutual funds and fixed income. Their proprietary charting packing is augmented by Recognia’s technical patterns and events. On Active Trader Pro, you can set up streaming news feeds and video from Bloomberg TV. The stock snapshot pages include environmental, social and governance (ESG) ratings from MSCI.
The planning and guidance tools can help you build a long-term plan before you open an account, giving you a good look at what Fidelity has to offer.
Portfolio Analysis and Reports
You can pull your non-Fidelity accounts into FullView for analysis of all of your assets, which also lets you give limited access to your investments to an advisor. FullView is somewhat slow to load and a little difficult to customize once you’ve added several non-Fidelity accounts to it. The reports give you a good picture of your asset allocation and where the changes in asset value come from.
The portfolio performance reports built into the website can be customized and compared to a variety of benchmarks.
Customer Service and Help
Besides the online help available, Fidelity has almost 200 investor centers around the United States. They are servicing customers on a variety of other platforms, such as iMessage, Facebook Messenger, Google Assistant, and Amazon Alexa, and are building a cognitive computing platform for conversational experiences.
Fidelity also offers full banking capabilities, along with a variety of insurance products. Fidelity carries enough SIPC and excess SIPC insurance that there is no per account limit on coverage of securities held by its clients. There are two money market funds available for excess cash that pay 1.82-1.83% interest. The main reason that Fidelity doesn’t score higher in this area is that they have had outages in the last year due to market surges, and the firm does not disclose how many of its customers can be logged on simultaneously.
Education and Security
Fidelity’s online Learning Center contains articles, videos, webinars and infographics that offer education for many investing-related topics such as options trading, fixed income selection, fundamental and technical analysis, and retirement planning. The firm offers webinars frequently, and online coaching sessions for more advanced topics. There are learning programs aimed at beginning investors in the mobile apps.
Fidelity conducts a risk assessment when a client logs in, and based on certain criteria the login may challenge the client with a two-factor authentication process or with a security question.
Fidelity’s commissions are in the middle of the pack, for the most part, and their margin rates are slightly higher than average. For mutual funds that are not on the no transaction fee list, there is a $49.95 charge for an initial purchase, which is higher than average. Their bond transaction fees are just $1 per bond, and they do not mark up the secondary market bonds, which lowers the yield. Very frequent traders can work out their own commission schedule.
What You Need to Know
Fidelity offers terrific value to every investing experience level. Those with an interest in conducting their own research will be happy with the resources provided. The website continues to undergo some necessary ease-of-use updates, while the Active Trader Pro platform has most of the bells and whistles that a day trader can use. Fidelity's execution quality is terrific at most trade sizes.
Fidelity’s development outlook is focused on improving the user experience. We look forward to the website overhaul, but in the meantime, there’s a lot of value for investors and traders here.
Compare Fidelity Investments
As the top spot in our Best Overall Online Brokers category, Fidelity Investments is a great solution for a wide range of investing styles. See how they compare against other online brokers we reviewed.
Fidelity Investments Broker Review 2019
Investopedia’s mission is to provide investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.
In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.
Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.