Is Fidelity Investments Safe?
Fidelity Investments is a well-known name in the brokerage industry. We've reviewed Fidelity to help you decide if they are a trustworthy company and if you should consider them as your broker.
Fidelity Company Overview
Fidelity has been in business for over 75 years, making it one of the oldest brokers still in operation. It is one of the largest private companies in the U.S. Fidelity employs over 50,000 people globally and operates in over 9 countries.
Fidelity manages a massive amount of business. They serve over 40 million individual clients, over 23,000 employer-sponsored retirement plans, and over 3,600 advisory firms. They handle more than 3.1 million trades each day and manage over $4.3 trillion in assets, with more than $11.3 trillion under administration.
Fidelity Better Business Bureau (BBB)
Many people start their research with the BBB to check if a business is credible. Fidelity has an A+ rating with the BBB. They have a 1.12/5-star rating based on 114 customer reviews. It's important to note that people who leave reviews on the BBB are often those who had a negative experience. Fidelity has had 739 complaints closed in the last 3 years, which is a very small fraction compared to their 40 million clients.
Fidelity Regulators and Oversight
Fidelity operates in one of the most regulated industries in the world. As a broker/dealer, they must follow strict regulations.
Fidelity is monitored by many regulators, including state securities regulators, the Financial Industry Regulatory Authority (FINRA), the Internal Revenue Service (IRS), the U.S. Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), and the Office of Foreign Assets Control (OFAC). Fidelity regularly reports to these authorities.
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Fidelity FINRA & SEC Registrations
Fidelity is regulated by both the SEC and FINRA. Fidelity’s FINRA ID is 7784 and their SEC ID is 8-23292. Fidelity is registered in all 53 U.S. states and territories. They have 136 disclosures on their FINRA profile, which is relatively few given their long history and size. These records are publicly accessible on FINRA’s website.
FDIC & SIPC Insurance
Checking the protections offered by a broker can tell you a lot about their legitimacy. Fidelity provides both FDIC and SIPC insurance. If you use Fidelity’s FDIC Insured Deposit Sweep Program, your cash can be protected up to about $1.25 million across several banks.
Cash in money market funds is covered by SIPC insurance up to $250,000. SIPC also covers up to $250,000 of your securities. Fidelity also has extra insurance beyond SIPC limits, offering high coverage on securities for each client.
Fidelity Alternative Account Protections
If Fidelity’s insurance isn't enough to reassure you, their Customer Protection Guarantee might. It promises to reimburse you for losses due to unauthorized activity in your account, assuming you are not at fault. This guarantee covers all eligible cash and securities in your accounts.
Fidelity Account Security
Fidelity uses many measures to safeguard investors' accounts and personal information. You can use biometric logins with their mobile app. If you call customer service, you can use Fidelity's voice verification system.
Fidelity offers optional two-factor authentication for logins to their website or app. You can set up alerts for activities like new bank links to your account. Fidelity also offers a "Money Transfer Lockdown" feature, which prevents electronic money transfers when activated.
Is Fidelity a Scam or Legitimate? The Verdict.
Fidelity is clearly a legitimate operation. The scale of their global business and the extensive regulatory scrutiny they are under every day prove they are not a scam and are entirely legitimate.
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Fidelity Review: Accounts Offered
Fidelity offers nearly every type of investment account you could need. This includes various types of trading and retirement accounts, health savings accounts, college savings plans, and accounts for small businesses and institutions.
One special offering is Fidelity’s Giving Account, which is a donor-advised fund that allows you to make tax-deductible donations, invest them, and later give to charity.
Fidelity Products Offered
Fidelity offers a wide range of standard brokerage products such as stocks, ETFs, mutual funds, options, bonds, CDs, and IPOs. They do not offer futures, FOREX, or direct cryptocurrency trading.
Fidelity’s fractional share investment program lets you start investing with as little as $1. They also offer an automatic dividend reinvestment program, ideal for long-term investors. Fidelity also provides limited-margin trading in IRAs.
Fidelity Services Offered
Fidelity operates a wide network of businesses related to investing, catering to nearly every type of investor, from individuals just starting out to large corporations.
Their services include wealth management, retirement planning, managed accounts, consultations with financial consultants, investor centers, clearing and custodial services, asset management, and a fully paid lending program.
Fidelity Pricing & Commissions
Fidelity offers commission-free trading for U.S. stocks, options, and ETFs. Options trades have a $0.65 per contract fee. They offer over 9,500 mutual funds, with many that do not have transaction fees. Their margin rates and fees for fixed-income investments are competitive.
Fidelity charges no fees for account maintenance, wire transfers, or access to their trading platforms.
Fidelity Review
Read a complete review of Fidelity under this link.
Fidelity Trading Platforms
Fidelity offers trading on their website, mobile app, and a desktop platform called Active Trader Pro. Each platform suits different types of traders, from beginners to advanced users.
Fidelity Planning Tools
Fidelity offers excellent free planning tools for various financial goals, including a detailed retirement planner and guidance for managing life events.
Fidelity Research Tools
Fidelity provides comprehensive research tools across all their platforms, allowing detailed analysis and trading of stocks, options, and bonds.
Fidelity Education Resources
Fidelity’s Learning Center offers a vast array of educational content, suitable for investors at all levels.
Fidelity Customer Service
Fidelity offers exceptional customer service, available 24/7 through multiple channels.
Fidelity Review Conclusion
In this review, Fidelity consistently rates highly across various aspects. While it may not be the best for day traders or those trading FOREX, futures, or crypto, it is excellent for most investors.
Updated on 1/16/2025.
Paul Johnson is a Licensed Stockbroker with 7+ years of experience in the financial services industry. Paul enjoys teaching about investing and writing about financial topics. He is a husband and father of twin boys.
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