Fidelity brokerage service ranks higher than its peers based on various factors, such as a commitment to lowering investing costs. The brokerage firm was not left behind when everyone in the industry rushed to cut commissions in 2019 to compete.
But apart from its low-cost offerings, Fidelity offers other services that are in the best interest of its clients, such as top-quality education and research.
The broker also makes it easier to earn extra income by sweeping any uninvested funds into a money market fund, which is extremely helpful.
As one of the larger brokers in the United States, Fidelity has excellent offerings for average, active traders and retirement investors. We dig deeper to find out more with the following Fidelity review.
Fidelity Brokerage Review
Fidelity stands out from the competition for one, its excellent trade executions. The brokerage firm has been improving execution algos for more efficient trading and price improvement. As a result, more than 96% of the orders executed have better pricing than the national average.
Using the website to trade is relatively easy. It might feel a bit clumsy with the various tabs and download menus when searching for a trading idea, but you eventually get the hang of it. Set a couple of defaults to help with this, even though most choices are best made when trading.
The broker puts any uninvested cash into a fund, where you can pull it out at any time when you need to trade. Some of the other brokers do not have this automatic feature. You need to move the cash manually.
Active traders will feel at home with Active Trader Pro, with trading tools and charting functions. You can customize it to fit your needs sufficiently. With the software, you can monitor various positions, new streams, and technical signals that you need to trade effectively.
You can set defaults for anything with Active Trader Pro and even place a trade from the charting functionality. The platform provides real-time data such as order entry data, watchlists, and charts. Other important features you can access include options analytics and a probability calculator.
Order routing determines whether you are likely to get the best possible price at the time of placing. Price improvement occurs when the purchase is below the offer, or the sale is above the price bid.
Fidelity Dynamic Liquidity Management (FDLM) is a trade execution engine that ensures better rates of price improvement for clients.
Additionally, the stockbroker does not route your orders for order flow payments.
Research and Education
Fidelity incorporates improved asset and research screeners to help with trading, and you can quickly narrow down to a few investment choices within your range.
Preset screens that you can customize based on your preferences are also available. The most popular is the stock screener with 21 themes and 140 criteria.
You have access to the mutual fund evaluator to understand better the various characteristics of mutual funds. But you have others such as the LiveVol scanners for stock options, and they are customizable.
Besides, Active Trader Pro has up to 26 predefined filters to find options for trading based on a variety of criteria. You can customize up to 200 criteria.
There are fixed-income screeners to filter through the vast number of market offerings and a yield table that updates every few minutes. However, the layout of this scanner is not quite attractive.
Fidelity has numerous calculators and tools to help with your investment strategy. You can create a budget using some of the tools and take advantage of the hypothetical trade tool to know the impact of your portfolio based on future investing activities.
Others, such as the Strategy Pairing Tool, allow you to scan for trading ideas. You can then evaluate the different strategies using the Strategy Evaluator tool and move on to populate a trade ticket.
Fidelity has excellent links to numerous and useful news sources that you can sort out based on your preferences. You can set up streaming news on the Active Trader Pro platform.
In addition, clients can take advantage of high-quality third-party research from providers such as Ned Davis Research and Hightower Report. Each of the stock research pages has qualitative and quantitative measures with MSCI data. You will view any Recognia-measured technical events on the charts.
Talking of charting, the web version has integrated Recognia technical events and patterns and Social Market Analytics-provided sentiment score. You can view up to four decades of historical price data and butter this with customizable technical indicators. But the charting functionality is better on Active Trader Pro, with the flexibility you need.
You can access hundreds of contents on any investing topic from Fidelity’s Online Learning Center for education. These are in the form of videos, articles, webinars, and infographics.
There are also weekly online coaching sessions with groups of up to ten participants. Here, you engage in lengthy discussions about technical analysis and the various investment assets. Beginners can use Fidelity mobile app to understand the investing concepts and the market.
Fidelity launched a new mobile app for young people in July 2020, with the objective to help with their financial goals. Fidelity Spire helps determine where to invest and prioritize financial goals. Users can then decide whether to recruit in a Robo-advisory service or invest independently for long-term growth.
Fidelity account opening is friendly and straightforward to use, but possible challenges include adding account features, where you need to re-enter personal details.
The account has various remarkable features for investors, such as the customizable news feed. You can get updates or watchlists in real-time to stay ahead and make profitable moves.
Unfortunately, you may need to use different Fidelity platforms to take advantage of the various vital tools. For example, traders get excellent fundamental research on the website, while essential research for equity is only available on Active Trader Pro.
Fidelity is more beneficial for buy and hold investors than active traders, and the web-based platform is sufficient. The interface effectively integrates various features such as watchlists, charts, and quotes without feeling overwhelmed.
You don’t need to exit the platform to read the news or analysis.
Those eligible can apply for portfolio margining, which can lower the margin requirement based on the calculated risk. The feature works well for derivatives traders who need to offset the inherent risks.
Most broker accounts now share the stock loan program revenue generated and allow traders to pick the stocks to be loaned out. Fidelity is no exception. On the other hand, any cash that remains uninvested in the account is swept into market funds of your choice.
The stock screener is a vital feature for various levels of Fidelity investors. The screener is relatively easy to use, and you can add criteria and automatically see the updated stocks. There are several thematic and expert screens that you can customize as well.
The stock screener and ETF screener are almost similar in appearance, but the former has analyst ratings.
Fidelity’s mobile offering is comprehensive, with almost the entire functionality of the website platform. You can trade and do anything in terms of workflow and customize as necessary. Choose your most frequent features and determine your own login page all in the mobile platform.
You can use the mobile platform to trade mutual funds, stocks, options, and ETFs. Most mobile platforms do not support fractional share trading, but it is possible with Fidelity.
Despite its above-average performance, the Fidelity mobile platform has its shortcomings. Charting and fundamental analysis are not up to standard. In particular, the charting function does not include a drawing tool, and you need to use the website for this.
Offerings and Orders
You can trade a wide variety of assets with Fidelity. These include mutual funds, options, and equities on the mobile app.
Others are stocks, long and short, single leg and multi-leg options, OTCBB (penny stocks), bonds, mutual funds, fractional shares, forex, and international.
Fidelity allows you to enter various orders on Active Trader Pro and the website. Conditional orders such as one-triggers-another are also available even on mobile.
You can use the positions page to roll an options order or close a position, and it is possible to trade up to 50 stocks as one entity through Fidelity’s basket trading services.
Shortcomings on the offerings include the inability to trade in cryptocurrency, future options, and futures.
Fidelity is a top broker with mostly everything you’d need for active and long-term trading. The investment firm has solid third-party providers such as Thomson Reuters, Ned Davis Research, and Recognia. All these and other tools such as screeners and charting are at your disposal to help up your investing game and grow your wealth.
But every stockbroker has its shortcomings. Fidelity has a handful. For example, the tradable securities do not include forex trading and futures, and the broker-assisted trade fee is higher than most.
But what kind of investor is Fidelity best for?
Well, both the retirement investors and active traders will feel at home with the investment company.