Fidelity Investments



Fidelity-InvestmentsFidelity Investments is the worlds largest mutual fund manger and one of the largest financial services firms in the world, currently managing in excess of $1.5 Trillion, yes that’s TRILLION dollars.

Fidelity is unusual for a large financial institution in that it’s not a publicly held company. Its shares are held privately by the founder’s family the Johnson’s and the company’s employees.

But as we’ve proved before on this blog, big doesn’t necessarily mean better. So we signed up for a Fidelity Active Trader Pro account to see how it compares against other brokers for both platform functionality, price and customer service.

 

Fees & Commissions

  • Stocks and ETFs: $7.95
  • Stocks and ETFs broker assisted: $32.95
  • Stocks and ETFs FAST (automated service phone): $12.95
  • Options: $7.95 + $0.75/contract
  • Mutual Funds: $75 per transaction
  • Minimum account opening balance $2500

 

Website & Sign-up

I come across a fair number of trading websites in the course of completing these reviews, but rarely do I come across a website as bad as this one.

You have to wonder if the person designing gave any thought at all to the people who might be using it.

It’s both ugly and difficult to navigate, with tiny navigational menus that are difficult to read and even harder to click on.

Having slated their website it comes as a bit of a surprise that signing-up with them was a breeze. They offer 90 days free trading to new accounts so I took full advantage, my account was up and running in a little over 10 minutes.

 

Trading Tools

fidelity-investment-platform

 

Fidelity Investments offer two trading platforms, a standard web based platform rather imaginatively called Active TraderPro.com and Active Trader Pro which is their downloadable platform.

Both platforms are very similar to be honest, I’ve always been a fan of web based platforms; I guess I’m from the cloud generation. They give you the freedom of trading from a number of different devices, useful if you’re not a full time trader.

So it’s good to see web based platforms catching up with the functionality and customization of their downloadable counterparts, since both platforms are so similar I don’t really see the point in the downloadable platform.

Having said that this is not the most intuitive of trading platforms, it’s a little old fashioned compared to some of its newer rivals, there’s no one click trading so executing a trade can be a little cumbersome and there’s none of the sophisticated stock screeners you see from other platforms.

If you like to trade options you’ll need to download options trader pro separately. This is not web based so that’s something to think about if you like trading on the move like me.

Full mobile versions of Active Trader Pro are available for iPhone, Android and Blackberry devices so you no matter which mobile device you use they’ve got you covered.

 

 Pros

  • Large Well Respected Name
  • Easy to use trading platform
  • Low Cost Fidelity Mutual Funds
  • No surcharges on penny stocks, extended hours trading or large-size orders

 Cons

  • Hi Commissions on non Fidelity mutual funds
  • Unreliable platform during busy hours of trading
  • Outdated and difficult to use website
  • Poor range of trading tools on the Active Trader Platform

 

Summary

Fidelity Investments are a reasonable broker but nothing more, their platform really lets them down. Its not that its bad, its just other brokers have moved on with one click trading and a more exotic range of tools.

In terms of price they’re certainly a lot cheaper than they used to be, but they’re not exactly cheap. $7.95 for a stock or ETF trade is in line with most mainstream brokers, but when it comes to non Fidelity mutual funds they’re off the planet charging  an astronomical $75.

If you’re a beginner they’re not the ideal broker for you as they have very limited training materials available and there is no virtual community for you to tap into. So a beginner would be better served by joining either Zecco or TradeKing.

For intermediate traders, you’ll find their platform just isn’t adequate enough. There is a distinct lack of tools and question marks over its reliability during busy periods, this is unforgivable for a company of Fidelity’s size. Intermediate traders would be better served by TD Ameritrade.

Fidelity don’t offer anything for more advanced day traders or scalpers, they simply don’t have a platform that’s suitable.

So really the only reason to join Fidelity is to take advantage of their low prices on Fidelity managed mutual funds. So long as you bare in mind this is offset by incredibly expensive fees for non fidelity managed mutual funds, I don’t know about you but that’s not a good enough reason to sign-up in my view.




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