Fidelity at a glance
What it is
Fidelity made a name for itself as a mutual fund provider with some of the brightest and boldest managers on Wall Street. For instance, its flagship Fidelity Magellan fund was piloted to consistent outperformance by iconic investor Peter Lynch across the 1970s and 1980s. To this day, his book "One Up On Wall Street" is required reading for any serious trader.
Though the age of stock picking has given way to a new era of index funds, Fidelity has stayed true to its roots. It continues to offer funds and products with a focus on more tactical strategies, intended to provide outperformance instead of just settling for whatever the Dow Jones industrial average gives you.
This philosophy shines through in its online brokerage platform, and makes it the perfect tool for active individual investors. Fidelity offers a robust suite of standard tools, and scales nicely to help even advanced traders look beyond just mutual funds and take advantage of any strategy they desire.
What it costs
Standard pricing is very competitive at just $4.95 for each stock and ETF trade. You can also take advantage of commission-free ETFs that are quite strategic, allowing you to play an individual sector like technology or a meet a specific portfolio goal like dividend growth investing.
And, of course, you'll have access to Fidelity's namesake mutual funds including investments like its iconic Magellan fund of large U.S. stocks or the even larger Fidelity Contrafund with more $120 billion in assets under management. You may have to meet minimum investment thresholds, of course, but these are often just $2,500.
This isn't just a platform for fund investors who buy and hold, however. With very competitive rates on options at $4.95 a trade and an additional $0.65 per contract, it's one of the cheapest brokerages in the industry.
Just about the only area where Fidelity isn't a bargain is on representative-assisted trades, in the event you need a bit of hand holding to book a transaction. At $32.95, that's one of the costliest rates around. So if you prefer the attention of a full-service broker, be aware that the cost structure ramps up steeply with hands-on help.
What it offers
Fidelity offers an incredible array of tools. It doesn't matter whether you're a beginner or a veteran trader, either, because this broker doesn't overlook any part of your investing journey.
For newer investors, the "Planning & Advice" section offers well-designed category pages about everything from budgeting and spending to life events like marriage or estate planning. The broker naturally brings some of these events back to its products and services, but the information is valuable and the approach isn't too salesy.
For traders who just want to roll up their sleeves, Fidelity offers a wide array of screening tools and research to investigate investment options. You can easily find out which stocks and sectors are making moves, and with just a click or two can dig deeply into analysis that is formatted with colorful charts and iconography to keep things readable.
Fidelity is one of the few brokers out there where investors can do intensive research on every element of their portfolio without ever having to do a Google search or visiting a third-party site.
Some of these specific features worth noting include:
There are plenty other valuable tools and insights on the platform. For instance, there's even a premium Active Trader Pro platform that's available to customers who trade at least three times each month. It's also worth noting most of these tools are available on a mobile experience, too.
Suffice to say that if you have any interest in doing your own research and staying informed about the market, Fidelity has you covered.
What it lacks
If you're investing in mutual funds and have only a small nest egg, the $2,500 minimums could be a negative. It's also possible that you're an active trader who really wants to focus on ETFs, and it's fair to say that some other brokers offer a larger suite of commission-free ETFs.
The biggest challenge is the intimidation factor. Experienced traders may love getting lost in the in-depth research, but in many ways new investors may simply wind up with a ton more questions than answers after a few minutes on the platform.
If you're a buy-and-hold investor looking for mutual funds, perhaps for an an old 401(k) that you're rolling over, other pared down brokers who are marginally better on cost may serve you slightly better.
This broker is best for...
If you're serious about investing, whether it be via trading individual stocks or simply taking a less conventional approach to your portfolio than simply buying an S&P 500 index fund, Fidelity will serve you well. It's also great for those who dabble in options but do most of their trading in stocks and don't want to sacrifice the depth of research for an options-specific broker.
And best of all, it grows with you. Not only is Fidelity competitive on costs at every level, it also offers plenty of research and education to help you evolve and thrive as an investor.
If you don't want to check in to you or portfolio more than once or twice a year, then perhaps the platform is slightly more powerful than you need. But that said, it certainly doesn't deliver an inferior experience.