Fidelity Go at a glance
Pros: Where Fidelity Go stands out
Low cost for beginners
Fidelity has a three-tiered pricing system, with fees that increase as your balance increases. The structure is somewhat unusual in this space and works as follows:
- If your account has $0 to $9,999, you’ll pay no fees at all.
- If your account has $10,000 to $49,999, you’ll pay a flat $3 per month.
- If your account has more than $50,000, you’ll pay 0.35 percent annually.
This pricing structure may create some weird incentives for customers, even as it allows beginning investors with less than $10,000 to get started with no management fee.
For example, if you bring $10,000 to your Fidelity Go account and you’re no longer receiving free benefits. Instead, you’re paying $36 a year for that balance, or about 0.36 percent annually. Contrast that with a balance of just below $50,000, where you’re still paying that $36 annually. It’s not a bad deal to have five times the money managed at the same flat rate. In fact, you’re being charged 0.072 percent of assets each year.
But things shift as soon as you bring $50,000 to Fidelity, because then your fee jumps to 0.35 percent, basically becoming five times as expensive right at $50,000. And from there, of course, the fee remains proportional to your assets. (So you might have a perverse incentive to open up multiple accounts below that $50,000 threshold and avoid further incremental fees.)
It’s also important to point out that Fidelity’s advisory fee includes the cost of the funds. So unlike at most other robo-advisors (Personal Capital is a notable exception), you won’t pay an additional fee for the funds you invest in, regardless of your pricing tier.
So while Fidelity’s headline rate of 0.35 percent looks higher than those offered by Wealthfront and Betterment, for example, on an “all-in” cost including funds, they’re all highly competitive.
Low-cost mutual funds
Fidelity Go uses mutual funds instead of ETFs, unlike most robo-advisors. That difference is somewhat academic, since Fidelity’s mutual funds offer low costs, one of the major appeals of ETFs. All the funds used in the program are Fidelity Flex funds and charge no expense ratio. That is, they don’t charge ongoing fees for holding them, unlike most ETFs and mutual funds.
That’s a little advantage if you’re going with Fidelity, especially if you’re just starting out. At other robo-advisors your funds might typically cost you about 0.1 percent annually, or about $10 for every $10,000 you have invested. So that’s additional savings that gets rolled into your funds.
Integrated with Fidelity
One positive of the Fidelity Go account is that it appears alongside your other Fidelity accounts, so you can quickly access all of it from your Fidelity dashboard. It will pull up your positions, projected value, your model portfolio and other relevant information. You can move quickly from one Fidelity account to another, and transfer money from a cash account to your brokerage accounts, Go account or others.
This integration with Fidelity also means you’ll get access to its educational resources, including its retirement and planning tools, which are extensive.
Cash management account
Fidelity offers a high-performing cash management account, though you’ll have to open it separately from the robo-advisor account. (And once your info is in the Fidelity system, account opening is a breeze anyway.) The cash management account charges no account fees and you’ll have FDIC coverage up to $1.25 million via Fidelity’s partner banks. You’ll also get mobile payments, billpay, debit card, check-writing and ATM fee reimbursements anywhere in the U.S.
While the account doesn’t pay interest, you can invest in CDs to increase your yield.
Fidelity has an excellent reputation for customer service, and Fidelity Go is an extension of that same ethos. Like its other accounts, Fidelity won’t nickel-and-dime you for every little thing, and it charges no extra fees for the standard account services (no transfer-out fee, for example).
You’ll also have access to Fidelity’s customer service staff 24 hours a day seven days a week by phone. Or you can reach out via live chat between 8 a.m. and 6 p.m ET. Email is also an option.
Fidelity Go looks like a solid, but not outstanding, robo-advisor that offers many of the core robo-advisor features. It’s likely a good fit for those who are already Fidelity customers, and it piggybacks on the company’s excellent (and deserved) reputation for customer service.
While Fidelity’s pricing structure gets beginners in the game, those with higher balances may find that other robo-advisors offer a higher level of service without charging any more. Wealthfront and Betterment are excellent picks in this regard, and Schwab Intelligent Portfolios brings a highly attractive flat-fee model with access to human advisors, too.
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