Fidelity is a name that is synonymous with the investing space. It has offered financial services since it first started back in 1946. It was in 1969 that Fidelity first went global. It now offers a massive variety of different products, such as retirement plans, brokerage and trading services, wealth management to name but a few. Fidelity has over 27 million clients just in the United States, with many more millions being part of its global reach.
Its main focus is on the trading of stocks, bonds, ETFs and options. This Fidelity review looks at how the brokerage operates in each respective compartment. You will see what things Fidelity does well and the areas in which it may need to make improvements.
- Massive selection of financial instruments to choose from
- Competitive fee structure
- Quality proprietary trading platform
- Very security conscious platform
- The proprietary trading platform is not accessible straight away
What can you trade?
Fidelity Stocks Review
With the Fidelity brokerage, you can choose from many different shares to buy and sell as you please. There is a lot of market analysis and research tools to help you with your decision-making in this regard. You can select from UK stocks or from stocks in 24 other countries and use 16 different currencies in the process, depending on your needs.
You also have the ability to participate in Initial Public Offerings (IPOs) and select from the likes of real estate investment trusts (REITs), closed-end funds, preferred securities, common stock, unit trust funds, variable interest entities and depository receipts. The fees you pay will vary depending on what country the given stock is based in.
Fidelity ETFs Review
With the Fidelity offering, there are more than 2,000 different ETFs available for you to trade. This is a mesmerising number of different ETFs and you will be hard-pressed finding a more extensive offering in the online broker space. About 5% of these ETFs are commission-free, which is an added bonus.
You can choose from a whole host of active and passive ETFs through Fidelity, allowing you to develop a comprehensive investment strategy. There are handy tools that allow you to filter out the specific types and themes of ETFs you are looking for.
You are even provided with a whole host of ETF ideas that can help your decision-making process becomes a lot easier. There is collaboration with the leading provider of ETFs globally, iShares also, which is ideal for those looking for commission-free choices.
What did our traders think after reviewing the key criteria?
One of the claims to fame of Fidelity is that it is one of the most affordable brokers in the space when it comes to trading ETFs. As mentioned, there is a portion of commission-free ETFs for you to trade. For UK customers, the lower cost ETF trades are not as lucrative as you will see in the Fidelity US offering.
For UK customers, you are looking at paying £10 for online trades, with this rising to £30 for each trade you make over the phone. The max fee you are ever going to pay when trading an ETF through Fidelity is capped at £45. There is also no fee charged on holding ETFs in your Fidelity account.
There is stamp duty in place of 0.5% when purchasing UK shares, being 1% when you buy Irish shares. There are also foreign exchange fees for you to consider if you are using a currency that is not pounds sterling. If you what to engage in a regular savings or reinvestment plan, then this will cost you £1.50 each time a transaction is made in this regard.
When it comes to trading financial products, there is only really one account for you to choose from with Fidelity. This is the Investment account. Other account options on offer generally cater for non-trading types of needs, such as personal pension accounts, stock and shares ISA accounts and junior versions of these accounts.
There is no limit in place on how much you can spend trading through your Investment account with Fidelity. You have access to a nice range of financial instruments. When getting started, you will need to make an initial deposit of at least £1,000 or else being a regular savings plan starting at £50.
There are a couple of different trading platforms on offer to you when you sign up for an Investment account with Fidelity. The proprietary trading platform available to you is called the Active Trader Pro. This is an advanced trading platform that is ideal for more experienced traders. There are countless tools that are exclusive to this platform.
The interactive charts allow you to quickly see the history, your positions, and real-time integrated balances. There are a couple dozen drawing tools. And hundreds of different analysis and research tools built into this platform. Despite having a lot of functionality, the Active Trader Pro is surprisingly straightforward to use once you learn the ropes initially. The process of trading options only takes a matter of a few clicks, with everything being broken down into three separate stages.
You use the ‘Trade Armor’ function when trading ETFs. When using this trading platform, you can run it through your web browser or download the client to your desktop. Not all traders can access this trading platform right off the bat. You need to have made at least 36 trades over the course of a year period in order to gain access. Sometimes if you contact the customer support team, you can access the platform without having to hit this trade requirement. Most other brokers in the space give you the ability to use all trading platforms right off the bat. There is a mobile app that is part of this offering, being available to both iOS and Android users.
For the other traders who do not have access to the Active Trader Pro platform, there is the industry-standard MetaTrader 4 option open for you to use. This will be familiar with those who have used other brokers before, as it is extremely popular across the industry. This contains a nice array of tools and options, just not at the level of the Active Trader Pro offering.
The UK Fidelity website is very clear and straightforward to navigate around. While the US site is somewhat cluttered, the UK version only has a few items on the menu, allowing you to quickly find what it is that you are looking for. All of the key information such as the fee structures are neatly laid out in tables, so you don’t have to trudge through reams of text to find the answers you are looking for. In the footer, you will find a list of the pages on the website, all in one place. The speed of the website is pretty good and important info is not hidden away from view.
There is an FAQ section that you can use initially when you are trying to resolve some issues you may be experiencing or answer a question you have about the Fidelity platform. If you want to directly get into contact with a member of the Fidelity customer support team, there are a few different ways in which you can do so. You can use the email form on the website to send them a text correspondence. If you like to take a more old school approach, you can send the Fidelity team a correspondence through the post to their office in Kent.
There is also a phone number you can ring to specifically deal with the customer service team. You can also contact the team via one of the various social media channels. The main downside if the lack of a live chat function on the UK-facing website. Generally, the response times are pretty good, with the email inbox and phone lines being manned around the clock.
When you are adding funds to your Fidelity account, there are a number of options open for you to use. You can use a debit or credit card from Visa or MasterCard to deposit funds. You may be asked to complete a 3D security page from your card provider to confirm the transaction. You can also send a cheque through the post or use a wire transfer. There are usually fees associated with sending a wire transfer, being levied by your respective bank and not by Fidelity.
Currently, the only way that you can withdraw funds from your Fidelity account is by using a bank wire transfer. Through this method, it can take up to five business days for your withdraw funds to reach your bank account. Usually, these funds will process quicker, often inside of 24 hours.
There is no option to open up a demo account with Fidelity. This allows beginners to learn the ropes for trading and the nuances of a given platform or it allows more experienced traders to test out new approaches to their trading.
In terms of the education section on Fidelity, there is an introductory guide into how to use the platform and an insight into the fundamentals of trading. There are also guides and videos on more advanced topics, as well as regular market analysis. You also have all sorts of tools for planning and choosing different investments, with a range of different calculators being on offer.
For analysis purposes, there are the likes of regular investment outlooks, daily market reviews and rafts of data that you can analyze to help come up with strong trading ideas.
Regulation & Deposit Protection
Fidelity is licensed to operate in the UK through the Financial Conduct Authority (FCA). This is a very well-respected regulatory body. Naturally, it is also licensed in the United States through the Securities and Exchange Commission (SEC). It is also a part of the New York Stock Exchange and the Securities Investor Protection Corporation (SIPC). This means that all of the client funds held by Fidelity are kept in separate bank accounts. Therefore, in the case of any financial trouble for the company, the client funds cannot be accessed to pay creditors. In total, there is customer protection of up to £50,000 in place on client accounts.
The security of the site itself is strong, utilizing the latest in encryption technology. This Fidelity, which adds an extra layer of security onto your account. This means that you will be sent a text message or a call when logging in to confirm you are the legitimate holder of that given account. The platform also utilizes McAfee Antivirus protection to prevent hackers from accessing important data.
With Fidelity being such a mainstay in the brokerage industry over the past few decades, you will not be surprised to learn that it has received numerous awards over the years. The industry awards come from a variety of different countries for different reasons. Some of these awards that Fidelity has won in recent times include:
- Best Online Broker 2018 – Investors Business Daily
- Best Online Broker 2017 – Barron’s
- Best Online Broker 2016 – Barron’s
It has also won awards for the speed of its platforms, its selection of assets and its mobile offering. If you wanted to list out all of the awards Fidelity has won, it would take a considerable amount of time.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.