When it comes to investing, choosing the right platform can be overwhelming. With so many options out there, it’s important to do your research and find a platform that offers the right combination of investment options, fees, and tools to meet your needs.
One such platform is Fidelity Investments. With a long history in the industry and a wide range of products and services, Fidelity is a popular choice for investors looking to manage their portfolios online.
In this review, we’ll take a closer look at Fidelity Investments to help you determine whether it’s the right investment platform for you. We’ll explore the investment options available, the fees you can expect to pay, the tools and resources offered, and more. By the end of this review, you’ll have a better understanding of what Fidelity has to offer and whether it’s worth considering for your investment needs.
Founded in 1946, Fidelity Investments is one of the largest and most well-respected investment companies in the world. With over $4.9 trillion in assets under management, Fidelity serves more than 35 million investors worldwide.
Fidelity offers a wide range of products and services, including retirement planning, wealth management, and brokerage services. They also offer a variety of investment options, including stocks, bonds, mutual funds, exchange-traded funds (ETFs), and more.
One of Fidelity’s key strengths is its research capabilities. The company employs over 400 analysts who provide in-depth research reports on individual stocks, sectors, and markets. Fidelity also offers a variety of educational materials and investment calculators to help investors make informed decisions.
In addition to its online platform, Fidelity operates over 190 investor centers throughout the United States, where investors can access personalized advice and guidance from financial professionals.
Overall, Fidelity has established itself as a leading investment company through its long history of innovation, research, and customer service. Whether you’re a seasoned investor or just getting started, Fidelity has the resources and expertise to help you achieve your financial goals.
Fidelity Investments Review
Investment Options Fidelity offers a wide range of investment options, including stocks, bonds, mutual funds, and ETFs. Investors can access these options through Fidelity’s online platform or through a financial advisor.
One standout feature of Fidelity’s investment options is its selection of commission-free ETFs. Fidelity offers over 500 commission-free ETFs, including many of its own proprietary ETFs. This is a significant advantage for investors who want to minimize their trading costs.
Fidelity Core Position Options
Fidelity offers 3 different core positions options for your brokerage, retirement, UTMA, and cash management accounts:
- SPAXX: A mix of US government bonds and treasuries with an interest rate yield of 4.99%
- FZFXX: A mix of US treasuries bonds with an interest rate yield of 4.99%
- FCASH: A mix of short term cash investments with an interest rate yield of 2.76%
Both SPAXX and FZFXX are exempt from local and state taxes but you must pay federal taxes on your interest income.
You can change your core position on Fidelity at any time by logging into your account or calling one of Fidelity’s 24/7 customer support phone representatives.
Read my article on SPAXX vs FZFXX vs FCASH compared for a comprehensive review of each Fidelity core position.
Fees & Commissions
Fees Fidelity’s fee structure is generally competitive with other investment platforms. The company does not charge account maintenance fees or inactivity fees, and it offers low trading fees for stocks, options, and ETFs.
One area where Fidelity can be more expensive than some other platforms is in its mutual fund expense ratios. Fidelity’s expense ratios are generally average or slightly above average compared to other mutual fund providers.
Reinvesting Dividends Automatically (DRIP)
You can choose to reinvest your dividends automatically. You can review and update your dividend reinvestment settings by following these steps after logging in to Fidelity.com:
- Click “Accounts & Trade” and select “Account Features”
- Look under “Brokerage & Trading” and click “Manage” next to “Dividends and Capital Gains”
- Click “Update” next to the position you want to change and follow the prompts
In terms of how reinvestment occurs, let’s begin by discussing the two dividend reinvestment plans (DRIPs) that Fidelity offers: the Fidelity Plan and the Depository Trust Company (DTC) Discount Plan. It’s important to note that the choice of plan is not up to the investor but depends on whether a particular security qualifies for the DTC discount. Securities that are ineligible for the DTC Discount Plan are automatically enrolled in the Fidelity Plan. The eligibility for the DTC discount is determined by the issuing company.
For the Fidelity Plan, Fidelity takes the initiative to identify all security owners. Fidelity Capital Market Services (FCMS) enters the domestic securities market to purchase these securities for reinvestment approximately two days before the payable date. Fidelity endeavors to acquire as many shares as possible on a best-efforts basis. Subsequently, they calculate the average share prices and distribute these shares proportionally to their clients. The reinvestment price is determined based on the average price of all shares acquired from the market.
Conversely, the DTC Discount Plan reinvests dividends at a potential discount ranging from 0% to 5% off the current market price, depending on the policies set by the issuing company. When reinvesting in a security eligible for the DTC plan, all brokers and dealers adhere to the same set of rules, ensuring that clients receive the same price or discount.
Tools and Resources
Fidelity offers a variety of tools and resources to help investors make informed decisions. These include research reports, educational materials, and investment calculators.
One standout feature is Fidelity’s stock research. Fidelity employs over 400 analysts who provide detailed research reports on individual stocks, sectors, and markets. Investors can also access market news and analysis through Fidelity’s website and mobile app.
Customer Service Fidelity is known for its excellent customer service. The company offers 24/7 phone support and has over 190 investor centers throughout the United States. Investors can also access personalized advice and guidance from financial professionals.
Mobile App Fidelity’s mobile app is well-designed and easy to use. The app allows investors to trade stocks, options, and ETFs, view account balances and holdings, and access research and educational materials. One standout feature is the app’s customizable dashboard, which allows investors to view the information that’s most important to them at a glance.
Overall, Fidelity’s investment platform offers a robust set of investment options, competitive fees, and strong customer service. While its mutual fund expense ratios may be slightly higher than some other providers, Fidelity’s commission-free ETFs and extensive research capabilities make it a strong choice for many investors.
Pros and Cons
- Wide range of investment options, including commission-free ETFs
- Competitive fees for trading stocks, options, and ETFs
- Extensive research capabilities, including stock research and market analysis
- Excellent customer service, with 24/7 phone support and personalized advice from financial professionals
- Well-designed mobile app with customizable dashboard
- Mutual fund expense ratios are generally average or slightly above average
- No fractional shares for stocks or ETFs, which can be a disadvantage for investors with smaller account balances
- Some investment options may be more complex and require more expertise to manage effectively
- Platform can be overwhelming for beginners or those with less investment experience
Overall, Fidelity Investments is a strong investment platform with a wide range of options and competitive fees. Its research capabilities and excellent customer service set it apart from many other providers. However, investors should be aware of the platform’s potential complexity and mutual fund expense ratios when considering Fidelity as an option for their investment needs.
The Bottom Line
Fidelity Investments is a top-tier investment company with a long history of innovation, research, and customer service. With a wide range of investment options, competitive fees, and extensive research capabilities, Fidelity is an excellent choice for many investors.
While Fidelity’s mutual fund expense ratios may be slightly higher than some other providers, its commission-free ETFs and strong customer service more than make up for this. Additionally, Fidelity’s research capabilities and educational resources can be invaluable to investors looking to make informed decisions.
Overall, Fidelity Investments is a great choice for both seasoned investors and those just starting out. Whether you’re looking to build a diversified portfolio or need help with retirement planning, Fidelity has the tools and expertise to help you achieve your financial goals.