Is Fidelity Investments Safe?
Fidelity Investments is a well-known name in the broker business. We have looked at Fidelity so you can decide if you think Fidelity is reliable and if you should pick them as your broker.
Fidelity Company Overview
Fidelity is one of the oldest brokers still around, with more than 75 years of experience. They are one of the biggest privately-owned companies in the U.S. Fidelity’s operations span the planet, with over 50,000 workers and offices in over 9 countries.
Looking at Fidelity’s numbers is remarkable. Fidelity serves
over 51.5 million individual clients. They oversee over
$5.5 trillion in managed assets and over
$14.1 trillion in administered assets.
Fidelity Better Business Bureau (BBB)
Many people first check the BBB to see if a business is real. Fidelity has an A+ score with the BBB. They have a 1.12/5-star score based on 114 client reviews. Keep in mind that most people who write reviews on the BBB are upset or belong to a small group that had a really bad experience. Fidelity has 739 closed complaints with the BBB over the last 3 years, which may seem high, but considering they have over 51.5 million clients, that’s a tiny fraction.
Fidelity Regulators and Oversight
Fidelity works in one of the most heavily monitored sectors on the planet — finance. As a broker/dealer, they belong to a part of finance that faces very strict rules.
Multiple state securities agencies, FINRA, the IRS, the U.S. Financial Crimes Enforcement Network (FinCEN), the SEC, and the Office of Foreign Assets Control (OFAC) are some of the groups that watch Fidelity. Fidelity must regularly report to these agencies.
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Fidelity FINRA & SEC Registrations
As stated, Fidelity is registered and supervised by the SEC and FINRA. Fidelity’s CRD# with FINRA is 7784, and their SEC# is 8-23292 if you'd like to look them up. Fidelity has FINRA licensing in all 53 U.S. states and territories. Fidelity has 136 disclosures with FINRA, which is very small given their long history and large size. These records are public on FINRA’s website.
FDIC & SIPC Insurance
One way to see if a broker is genuine is to check how they protect you and your funds. Fidelity offers both SIPC and FDIC coverage, depending on how your cash is held. If you use Fidelity’s FDIC Insured Deposit Sweep Program, you can get FDIC protection for up to around $1.25 million across several banks.
If you keep your cash in money market funds, SIPC insurance covers up to $250,000 in cash. Beyond your cash protection from FDIC or SIPC, up to $250,000 of your investments are also insured by SIPC. For extra security, Fidelity provides additional coverage above SIPC for certain asset limits per customer.
Fidelity Alternative Account Protections
If Fidelity’s insurance protections don’t satisfy you, their Customer Protection Guarantee might help. This promise states that they will repay you for any unauthorized activity in your accounts, as long as it isn't your fault. All clients automatically get this guarantee for all cash and investments in qualified accounts.
Fidelity Account Security
Fidelity has strong security features in place to protect user accounts from fraud. For their mobile app, you can set up fingerprint or face recognition, depending on your device. If you call Fidelity’s service line, you can join their Fidelity Myvoice system, which confirms your identity with your unique voiceprint.
Fidelity also lets you enable two-factor authentication for logging in to the site or app. You can turn on text alerts for certain events on your account, like when a new bank link is added. Finally, Fidelity offers Money Transfer Lockdown, an optional setting you can switch on or off that stops electronic withdrawals when active.
Is Fidelity a Scam or Legitimate? The Verdict.
It would be the biggest, most complex scam in history if Fidelity pulled off what they do without being genuine. The size and reach of Fidelity’s global enterprise already proves they’re doing honest business. On top of that, when you factor in all the regulation and oversight Fidelity faces daily, it’s clear that Fidelity is no scam and is entirely legitimate.
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Fidelity Review: Investing
Fidelity clients can open both brokerage and advisory accounts. No matter which approach you take, Fidelity offers a normal range of asset classes:
- Stocks, including over-the-counter and foreign issues
- Bonds, brokered CDs, and other fixed-income securities
- Funds (including mutual, exchange-traded, and closed-end)
- Annuities
- Cryptocurrencies
- Options
Not every account can access every product. For instance, Fidelity Go (the firm’s lower-cost advisory account) only invests in Fidelity Flex mutual funds. These funds have no expense ratios, though it’s a fully automated program with no human advisor.
For a fuller approach, Fidelity has a wealth-management plan that includes a real human advisor at one of its many branches. With this arrangement, you can get many services like retirement planning, life insurance, and charitable giving assistance.
Cash Features
Fidelity has a combined bank-brokerage account called the Cash Management Account, which includes a Visa debit card, a checkbook, and FDIC coverage up to $5 million. It sweeps extra cash into partner banks. Money market funds are also offered, with yields around 4%.
The debit card includes global ATM fee refunds, and the account also has free online bill pay.
Fees and Minimums
Fidelity’s fees are low, and its requirements are simple. Brokerage and robo accounts have no minimums, though advisory and wealth-management accounts can vary. The cash account has no minimum or ongoing fees.
Most trades have zero commission, though crypto trades at Fidelity cost 1% of the transaction. Some secondary bonds are $1 each, and trading foreign stocks has fees that depend on the exchange (often about €19).
Margin
Fidelity offers margin trading. The margin rates are shown below:
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Debit Balance
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Fidelity Margin Rates
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above $1,000,000
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8.25%
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$500,000 – $999,999
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8.55%
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$250,000 – $499,999
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10.825%
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$100,000 – $249,999
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11.075%
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$50,000 – $99,999
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11.125%
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$25,000 – $49,999
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12.075%
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$10,000 – $24,999
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12.575%
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$0 – $9,999
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12.575%
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You can switch a cash account to margin on Fidelity’s site. Going back to cash requires a phone call.
Website
Fidelity’s site has a variety of tools, such as:
- Full-screen charting with technical studies and drawing tools
- Extensive stock research with free analyst reports
- Pop-up order ticket with short-selling option
- Conditional orders (OCO and OTO)
- Advanced options tools with a strategy builder
Mobile App
The Fidelity mobile app has:
- Charting in vertical and horizontal mode
- Multiple trade tickets for stocks, options, and mutual funds
- Option spreads
- CD yield matrix
- Price and technical alerts
- Market news with Bloomberg live streaming
Our Recommendations
Active Stock Trading: Fractional shares, overseas stocks, and Active Trader Pro
make Fidelity excellent.
Retirement Planning & Long-Term Investing: Fidelity’s range of tools and advice
make it a strong pick.
Beginners: Fidelity’s managed plans, including ones with real advisors, are
excellent.
Small Investors: No minimums and fractional shares give Fidelity an edge.
Mutual-Fund Trading: With more than 9,000 funds, Fidelity has big variety.
Fidelity Review Verdict
Fidelity is among the top investment companies around. However, futures and forex traders must look somewhere else.
Updated on 2/27/2025.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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