Fidelity Review

Section 1: Web Site Functionality Rank

Navigation
If you are a beginner, the site may appear cluttered and navigation may be confusing because there are so many options. Fidelity doesn't expect to have a lot of first time online traders or starter portfolios, they cater to more experienced online investors. People tend to migrate here from the stripped down bargain sites. Experienced online traders will pick up the navigation pretty quickly and will probably appreciate all of the extras available at Fidelity that are not available anywhere else. That's actually why the site feels a bit cluttered at first, there are a ton of outstanding research and analysis tools available.

Dependability
Fidelity is extremely dependable, the last record we could find of any site crash or service interruption was a short outage last year in February 2007. You don't have to worry about lag, site crashes or glitches at Fidelity, they're very rare.

Customization
We were amazed by the customization options for anyone that can meet the 36 trade per year minimum to qualify for the active trader platform. It will take browsers a while to familiarize themselves with the site, but once they master navigation and begin exploring the customization options they won't be disappointed. Setting up Active Trader feels more like designing a Yahoo or Google homepage than setting up an online trading platform, there are many great modules to choose from. Sites that have similar products usually have higher volume or net worth requirements to gain access. More about this platform below.

Those that don't make 36+ trades per year will be using the web based platform. While you won't have the ability to design a personalized trading page, you will still have access to most of Fidelity's high quality research and analysis tools. All of these tools are customizable. Most have a vast array of options and settings to choose from so that they can be tailored to match your personal preferences and strategy.

Trade Execution
Fidelity is the industry leader, they offer an astounding 1 second trade guarantee.

Section 2: Trading Costs and Fees Rank

Intuitive Commission Structure?
A little bit complicated until you understand their Gold, Silver and Bronze levels. We'll save you the trouble.

Gold = 120+ trades per year or > $1,000,000 in your account
Silver = 36+ trades per year or > $50,000 in your account
Bronze = Everyone else
Minimum to Open an Account $2,500 minimum to open a new account.

Stocks
Gold Level: If you make 120+ Trades per year or have > $1,000,000 in your account
Internet Trades = $8.00 per trade. Add $0.005 per share on trades > 1,000 shares.
Interactive Voice System = $20.00 per trade. Add $0.02 per share on trades > 1,000 shares.
Broker Assisted = $35.00 per trade. Add $0.035 per share on trades > 1,000 shares.

Silver Level: If you make 36+ Trades per year or have > $50,000 in your account
Internet Trades = $10.95 per trade. Add $0.015 per share on trades > 1,000 shares.
Interactive Voice System = $25.00 per trade. Add $0.025 per share on trades > 1,000 shares.
Broker Assisted = $45.00 per trade. Add $0.045 per share on trades > 500 shares.

Bronze Level: Basic service, available to all customers
Internet Trades = $19.95 per trade. Add $0.015 per share on trades > 1,000 shares.
Interactive Voice System = $45.00 per trade. Add $0.045 per share on trades > 500 shares.
Broker Assisted = $55.00 per trade. Add $0.14 per share on trades > 100 shares.

Options
Gold Level: If you make 120+ Trades per year or have > $1,000,000 in your account
Internet Trades = $8.00 per trade + $0.75 per contract.
Interactive Voice System = $20.00 per trade + $1.75 per contract.
Broker Assisted = $35.00 per trade + $1.75 per contract.

Silver Level: If you make 36+ Trades per year or have > $50,000 in your account
Internet Trades = $10.95 per trade + $0.75 per contract.
Interactive Voice System = $25.00 per trade + $1.75 per contract.
Broker Assisted = $45.00 per trade + $1.75 per contract.

Bronze Level: Basic service, available to all customers
Internet Trades = $19.95 per trade + $0.75 per contract.
Interactive Voice System = $45.00 per trade + $2.25 per contract.
Broker Assisted = $55.00 per trade + 2.25 per contract.

Mutual Funds
No-Load No-Fee Funds = $0.00 Free, No commissions or transaction frees charged by the Mutual Fund or Fidelity as long as you hold 180+ days. (1,850 available)
No-Load Funds = $75.00 transaction fee charged for online trades < $13,333. After $13,333 you are charged 0.75% of the total trade up to $250. The minimum for a broker assisted transaction is $100 regardless of trade size.
Load and Fee Funds = Fees charged by mutual fund and possibly by Fidelity as well

Tip: Avoid any funds with loads or fees. With the vast selection of no-load no-fee funds offered by many of today's online brokerages, there's no reason to ever pay them!

Treasuries & Bonds
All US Treasuries = Free
Bonds = $1.00 per bond, $250 maximum fee

Rates & Fees
Margin Rates:
Balance Effective Rate
$500,000+ 4.000%
$100,000 - 499,999 6.825%
$50,000 - 99,999 7.325%
$25,000 - 49,999 7.825%
$10,000 - 24,999 8.325%
$0 - 9,999 8.825%

Interest Paid on Cash (Sweep): 2.68% on IRAs and Roth IRAs, 2.28% on taxable accounts.
Paper Statements: Free
Checking Available? Yes
Electronic Statements: Free
Wires: $15

Section 3: Customer Service Rank

Phone Reps
Fidelity wins awards for customer service every year. Wait times are short, reps are friendly and knowledgeable, and they are available 24 hours a day. The only complaint that seems to crop up consistently is from customers who happen to have an unusual problem that reps aren't trained to answer. They were bounced around to many departments and sometimes dropped. Customers that have experienced this recommend that you push for your ticket to be labeled priority and then the matter is usually resolved quickly.

That being said, we didn't have any problems at all and can see why Fidelity wins consistent awards. The reps we talked to were experienced and knowledgeable brokers, we weren't able to trip them up. Granted, the list of questions we asked regular phone reps is pretty basic but we ask a LOT of questions on a wide variety of topics. Fidelity reps were the only ones able to answer every single question without putting us on hold to research or transferring us to a specialist.

Online Support
Live Chat is an increasingly common feature and it is a wonderful perk and Fidelity was one of the first to offer it. Fidelity also offers the traditional email and FAQ support, and both are solid, but considering you have live chat and short wait times for phone reps, you'll probably never need either.

Advanced Support (Options, Funds, Bonds, etc.)
Unless you have very advanced trading or technical questions, the regular phone support will be able to help. All of the reps we spoke to were knowledgeable brokers and advisors. If you do have questions that can't be answered by regular support, Fidelity has specialists for Bonds, Treasuries, Mutual Funds, and Options. They also offer special support for specific account types such as IRAs or 529 College Savings Plans.

Fidelity shines in the specialist category, you don't even have to go through the regular phone lines. Most of the high-end online brokers offer specialists but they are either hard to reach or only available to high net worth or high trade volume clients. At Fidelity, anyone can dial specialists direct. In addition, if you qualify for the Premium Services membership (36+ trades per year and $50,000 in assets OR $500,000+ in assets), you will be assigned your own personal specialist. Fidelity is one of the industry leaders in this category.

Section 4: Research Tools & Investing Information Rank

Market Research
Fidelity is an industry leader in this category. Regardless of your investment style or strategy, Fidelity will have high quality research and analysis tools to help you search for investments and analyze their potential. Several of their tools, such as Wealth-Lab Pro and the Bond Ladder, provide features that aren't available at any other online brokerage.

Fidelity offers all of the typical independent research and opinions resources that have become standard at the higher end online brokerages but they also offer what they call Company Research Highlight Report. These reports are exclusive to Fidelity and there are over 8,000 available. There are no special account requirements, every client has access, you simply put in the stock ticker to pull them up as if you were getting a quote. The reports don't contain anything that you couldn't find on your own but it's well organized, clearly presented and contains a ton of information. This is a huge research time saver.

Level II Quotes & Streaming Data
Both are available

Trading Platforms

Web Platform: Fidelity's web platform doesn't allow you to design a personalized trading page, but you will be able to customize your portfolio page and the research and analysis tools to suit your personal preferences. Many of the research and analysis tools, such as Bond ladder, aren't available anywhere else but will still be available even to basic level Fidelity clients.

Active Trader Pro: This platform is launched right from your desktop. Everything is fully customizable, you'll be able to choose from a long list of high quality modules for your trading page. Active Trader also has a dedicated support team available during regular business hours. Access to this tool requires 36+ trades per year.

OptionTrader Pro: This platform is also launched from your desktop. Like Active Trader Pro, everything is customizable, you'll be able to choose from a long list of high quality modules. OptionTrader also offers full greeks and analytics. Access to this tool requires 20+ contracts per month.

Wealth-Lab Pro: This is another desktop application but it stands head and shoulders above Active Trader and OptionsTrader. Wealth-Lab Pro allows users to design, build, back-test, and execute trading strategies. Novices that aren't ready to design their own can select from many pre-built trading systems. This platform is incredibly robust and has flexible parameters and criteria, you can test any strategy that you can dream up. Unfortunately the system currently requires 120+ trades per year.
Mutual Fund Research

Fidelity has several Mutual Fund research tools. Our favorite is "Fund Picks". This tool selects the top 10 funds in nearly 30 different categories from the 1,850 no-fee no-load funds available at Fidelity. "Fund Evaluator" is Fidelity's screening tool but it is the least impressive among the mutual fund research tools, users have a very limited number of selection criteria to choose from. The last one worth mentioning is "Portfolio review" which can compare your current asset allocation to your investment strategy and help you make any necessary adjustments. This tool is nice to have since rebalancing can be a pain for the novice investor.

ETF Portfolio Builder
ETFs are a hot topic right now and Fidelity already has a very solid ETF portfolio analysis and management tool available. The ETF Portfolio Builder allows you to analyze and adjust your current portfolio or test sample portfolios before you actually trade. You'll also be able to compare your holdings to major index's to see how closely your allocation matches. Since Fidelity offers every ETF on the market, this is a comprehensive tool.

Section 5: Perks Rank

Wealth-Lab Pro & Simulator
Wealth-Lab Pro: This is the most amazing feature we saw at any of the online brokerages during our review. If this is ever available to every Fidelity client it would be hard to imagine any competitor taking 1st place in the Trading Platform category.

Wealth-Lab Pro allows users to design, build, back-test, and execute customized trading strategies. Novices that aren't ready to design their own strategy tests can select from one of Fidelity's pre-built trading systems. There are entire websites dedicated to creating and testing investing strategies using Wealth-Lab Pro, it's that good. Unfortunately the system currently requires 120+ trades per year.

Bond Ladder
The Bond ladder is a research and analysis tool but we included it in perks because we didn't see a similar product at any competitor. The Bond Ladder allows users to search for bonds that fit their criteria, make side-by-side comparisons of yields, call dates, and ratings, and create yield curve comparison graphs. Clients can also use the Bond Ranking System feature to do a risk analysis and decide which bonds are the best fit with their strategy and risk tolerance.

Premium Services
Requires 36+ trades per year and > $50,000 in assets OR > $500,000 in assets

Fidelity's criteria of 36+ trades and $50,000 in assets allows a wide range of clients to qualify for perks usually reserved for wealthy clients. Fidelity Premium Service members are assigned their own personal financial advisor for investing guidance and they also have a dedicated team of phone representatives to support general questions. Premium members also receive free professional portfolio, retirement, and estate planning guidance if they choose to take advantage.

Private Access Services
Reserved for clients with > $1,000,000 in assets. Not many will qualify but there is a generous package of perks too long to list here for those lucky clients that meet the criteria.

Section 6: Product Offerings

Retirement Accounts
IRAs, Roth IRAs and personal 401Ks

Education
529, custodial accounts

Managed Account
Available

Specialty Accounts
Estate, Trust, Investment Club, and 401Ks for Small and Large Businesses

Section 7: Security

SIPC Member
Yes. SIPC protects securities in your account up to $500,000. Fidelity also carries insurance over and above the SIPC protection.

Firewall Secured and Fraud Protection
Yes. All of the major sites have dependable security. They can't afford to make mistakes, they wouldn't survive a year if they gained a reputation for mishandling money or for lax security.

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2 Comments

  1. Do you have any statistics regarding the reliability of other investment firms websites or are you assuming Fidelitys is the only site that ever experienced a technical problem?

  2. The Fidelity website is unreliable. June 20,2013 website crashed with thousands of traders unable to assess their trading accounts 0930 thru 1208 presently site remains down. Phone line busy signals all day. I'd say Fidelity fails as a reliable source to hold investment accounts.

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