Founded in Boston in 1946, Fidelity Investments (commonly called FMR) is a multinational brokerage that has consistently ranked in the top five in terms of brokerage firms with the best user experience. Fidelity has had over seventy years of experience, and it has $2.46 trillion client assets under management.
Fidelity joined the rush to cut fees and commissions, something that became a trend in 2019 for brokers. It cut commissions to zero as well. However, these aren’t the only positive qualities that FMR has. FMR has automatic cash sweeps, something that similar brokers often don’t offer.
FMR has increased its focus on cash management, execution quality, and research and investment tools. This has paid off handsomely, as clients are thrilled with the changes. Though there are some cons, as you’ll see in the next section, FMR is one of the best-ranked brokers for a very good reason.
Pros and Cons
Pros
- ETF screeners are fantastic
- Automatic cash sweeps make it easy to earn interest on the side
- News feed is personalized and customizable
Cons
- No accounts available for non-Americans
- No options or commodities on futures
- Data doesn’t refresh automatically (you have to manually do it)
Recommended For
Why These Pros
Automatic cash sweeps are a highlight of Fidelity. Uninvested money gets swept into a money market account. This puts more money in your pocket, as it is an easy way to earn interest. FMR’s trade executions speak to its platform’s quality, as do the research screeners. ETF screeners, especially, have rated high marks from users. Lastly, the news feed is an important part of every trader’s trading journey. Having a flexible and customizable feed gives you the news you want without having to sift through stories.
Why These Cons
On Active Trader Pro, quotes stream automatically. But, otherwise, customers have to manually refresh data in order to get up-to-date information. Is this a big deal? No, but it might be annoying. What is a little more problematic is the lack of options and commodities on futures. Customers who outgrow Fidelity often say that they left to pursue trading options on futures and futures.
Who Is Fidelity Recommended For?
FMR addressed the split between beginning investors and advanced traders by developing two platforms (as opposed to trying to make everything work in one). The web-based platform is best for investors who are less active or newer to investing. If you’re advanced and/or active, you might find that FMR’s Active Trader Pro is the best thing for you. Active Trader Pro is a downloadable platform, customizable with a more advanced suite of features than you’d find on the web platform.
Regulated By
- Securities and Exchange Commission (US)
- FINRA (US)
- SIPC (US)
Top Features
Active Trader Pro
To begin, one of the best things Fidelity has to offer is its Active Trader Pro. As mentioned above, this downloadable platform is best for an active and/or experienced trader. You don’t have to be a trading genius to use it, but it helps to be active, as the Active Trader Pro has a lot of features in its suite. Option traders will particularly like ATP.
Active Trader Pro has real-time trading alerts, potential risk charting, a Daily Dashboard, and a way to place trades, customizer your user experience, and monitor your accounts like a hawk. The layout is predefined when you first download the platform—you can then customize it (even down to colors and fonts) to make it truly your own. The trade execution on Active Trader Pro is outstandingly sharp.
Offering Range/Order Types
FMR lets users trade 3,000 stocks, both short and long. You can also trend penny stocks, over 3,500 no-fee, no-load mutual funds, bonds (treasury, corporate, municipal, etc.), multi- and single-leg options, international stocks (twenty-five, currently), sixteen currencies of Forex, and fractional shares. There is also a robot advisor available both on the mobile app and the website (as well as Active Trader Pro, of course).
There are many types of orders you can place with FMR. Note that conditional orders are unavailable on the mobile app. FMR’s basket trading options deserve a mention—you can select up to fifty stocks in a “basket.” These stocks can be traded, monitored, and managed as a single entity. Basket stock trading is definitely one of Fidelity’s highlights.
Amenities
If you qualify for portfolio margining (a minimum of $2,000 in account equity), the amount of necessary margin can be reduced based on the overall risk. Customers who trade derivatives and have high equity will like this portfolio margining amenity.
FMR has a stock loan program from which it shares its revenue. Clients can choose which stocks in their portfolio that they’d to receive a loan for. Other nice amenities include the automatic cash sweeps (discussed above) and dividend reinvestment for all stocks.
Screeners, Tools, & Education
Options and ETF screeners are excellent. For Options, LiveVol powers your scanner. There are built-in scans and customization options. Active Trader gives investors twenty-six predefined filters. Customization lets you select screens using two-hundred different criteria.
Educational tools on Fidelity are well-done. For example, there is a Mutual Fund Evaluator. The MFE digs into each fund’s characteristics to educate the investor. There are also tools and calculators, a highlight of which is a hypothetical trading tool. This hypo tool shows the impact from a future buy or sell on your portfolio.
Trading ideas come from the Strategy Pairing Tool and Strategy Evaluator. Options traders can evaluate and compare different strategies. The Argus’ Buy and Hold Stock List lets traders search for calendar spread and covered call strategies. These tools, as well as the live news feed, are top-notch.
Account Types
There are four accounts you need to know when it comes to FMR. Fidelity offers a brokerage, cash management, brokerage and cash management, and Fidelity Account for Business.
Brokerage Account
The brokerage account at Fidelity is low-cost and full-service. You can trade stocks, ETFs, bonds, mutual funds, options, and more with this account. You can access the tools and research (including Active Trade Pro).
Cash Management
If you want an account with FDIC insurance (brokerage accounts do not have these, due to the risks inherent to trading), consider a cash management account. It is basically a checking account without a bank, and ATM fees are reimbursed no matter which state you’re in.
Brokerage & Cash Management
This type of account combines the brokerage account and cash management account. It’s the best of both worlds. Once again, deposits are eligible for insurance from the FDIC, and ATM fees are reimbursed. This account is good for people who want to transfer money from the cash management into their brokerage account.
Fidelity Account for Businesses
Business financial management meets investing with this account. With the Fidelity Account for Businesses, you get mutual fund, cash management, and trading features with which to manage business finances.
Trading and Investment Tools
- 24hr Trading: No
- Streaming News Feed: Yes (but with Manual Refresh)
- Charting Package: Yes
Compliance & Regulation
Fidelity is regulated by the SEC, FINRA, and, for some accounts, the SIPC. The SIPC regulation protects broker accounts. Each customer gets $500,000 protection in securities. There is a limit of $250,000 on claims for cash that is awaiting reinvestment. Note that the SIPC does not cover deposits made at Program Banks.
Fees & Commissions
- Rollover Fee: $25-$50
- Margin Interest: 4.0-8.325%
Pricing
There are no commissions for option, stock, and ETF trades, and there is no minimum required to open an account—though $10 is required to start trading. Options cost $0.65 per contract, and bonds are $1 per bond. Fidelity mutual funds cost $0 to trade, though NTF non-Fidelity mutual funds cost $49.95 on redemption if held for under two months (60 days). Transaction-fee, non-Fidelity funds cost $49.95 a purchase.
Service Details
- Supported Languages: Vietnamese, Turkish, Thai, Tagalog, Spanish, Somali, Russian, Romanian, Punjabi, Portuguese, Polish, Nepali, Mandarin, Malay, Lithuanian, Laotian, Korean, Khmer, Karen, Japanese, Italian, Hmong, Hindi, Hebrew, Haitian Creole, Greek, German, French, Farsi, Cantonese, Burmese, Bengali, Armenian, Arabic, ASL, Albanian, English.
- Customer Service Hours: 8:00AM-10:00PM (Weekdays)
- Email Response Time: Within 48 Hours
- Telephone Orders: No
- Personal Account Manager: Yes
Reliability & Security
Fidelity has been around for a long time, and it is heavily regulated. In terms of reliability, the SIPC insurance bodes well for clients. Active Trader Pro is one of the best-rated downloadable platforms, so glitches appear not to be an issue for FMR the way they are for certain other brokers.
User Experience
Customer service has also been a high point for Fidelity. Though the company is not BBB-accredited, the user experience, particularly for active and advanced traders, is on-par with what you would expect from a quality firm.
Final Thoughts
FMR is a top-notch brokerage. Its Active Trader Pro is one of its main highlights. Though its futures trading is not ideal, ETF and options traders have found Fidelity to be excellent. The technology (especially screeners) is also high-quality. All in all, there is a good reason that Fidelity consistently ranks as one of the best brokers in the country.
Contact Info
245 Summer St, Boston, MA 02210
FAQs
Q: What is the customer service phone number?
A: To reach FMR customer service, dial 1 (800) 343-3548.
Q: How long do deposits take?
A: If your deposit is received by 4:00 PM (Eastern Time), deposits into your account will happen the same day. If not, it will take one business day.
Q: How long do withdrawals take?
A: Withdrawals take between one and two business days to process, though the availability might be longer, depending on which bank you are with.