We rate Fidelity Investments
Michael Abramowitz

The good news is Fidelity Investments presents the online consumer with a user-friendly Web site. But the not-so good news is they also present a relatively expensive way to invest compared to other online brokers. For this reason, we're not as high on Fidelity as we'd like.

Our major complaint is the price to invest. Fidelity's $5,000 minimum funding balance was way out of line compared to the other brokers we tested -- $2,500 more than the closest competitor, Charles Schwab, and $4,500 more than E*TRADE. We're not sure if Fidelity is shooting for the higher-level investor or not, but if it wants to appeal to the "mom and pop" investor, the company needs to aim a little lower.

Also, their commission charges of $25 for the first 36 trades are too high for online trading -- especially when Ameritrade and Datek dangle less-than-$10 commissions in their customers' faces.

Another of Fidelity's faults is that it doesn't show our current balance immediately after placing a trade. With today's computer technology, instantaneous balance information should be just a click away. Fidelity keeps it a day away.

Aside from these complaints Fidelity does a nice job. Their site won't win any beauty contests, but it is extremely user-friendly. The design is similar to a good file system. The functions of each section are self-explanatory. We say hooray to that.

Fidelity offers access to Initial Public Offerings only for customers with accounts of over $500,000. Now the rest of us who aren't half-millionaires might say, "What about the little guy?" Considering the high risk associated with IPOs, this policy isn't such a bad thing. For every IPO shooting star there are two IPO duds out there crashing to earth.

The company offers free real-time quotes to all customers, large and small. We're certainly happy about that because it's important to know what your stock is doing right now, not what it was doing 20 minutes ago.

We also compliment Fidelity on giving customers trading news and information through its partnership with CBS MarketWatch. Meanwhile, the online broker's retirement center is thorough, with plenty of information for all types of people. Remember, a well-read investor is a well-bred investor.

It's all about the bottom line

Unlike other Web sites that kicked out trade orders, Fidelity's system performed flawlessly during our test. Hip-hip hooray to that!

The company's customer service line is free and available 24 hours a day, but it is cumbersome. You have to push button after button after button before reaching a human being. But once you get through the maze, Fidelity's representatives are friendly and knowledgeable.

Overall, Fidelity offers a solid performance for the investor who isn't concerned about commission price and funding level. Unfortunately for the folks at Fidelity.com, these things concern us, which is why we give Fidelity a grade of B+.

-- Posted: Sept. 17, 1999