Robin Hood versus Fidelity

Robinhood vs Fidelity


Compare Fidelity Investments versus Robinhood - which is better for fees, IRA/Roth accounts, online stock trading, and mutual funds investing in 2020?



Fidelity vs Robinhood For 2020


Robinhood started the craze for $0 commissions. Fidelity has followed this trend with zero trading fees on stocks and ETF’s. So are these brokers about even now? Let’s have a look.


Commissions


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Fidelity $0 $49.95 $0.65 per contract $0 $0
Robinhood $0 na $0 $0 na


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Fidelity
Robinhood


Promotions


Fidelity Investments: Get 500 free trades with $100,000+ deposit.

Robinhood: Get one free $3-$100 value stock when you open an account.



What Assets Can Be Traded?


The first thing you want to know about a potential brokerage firm is what investment vehicles it offers. If it doesn’t have the assets you want to invest in, everything else is irrelevant.

Fidelity has bonds, stocks, penny stocks, OTC stocks, options, precious metals, mutual funds, ETF’s, closed-end funds, and IPO’s.

Robinhood customers have a smaller selection of financial products. There are no precious metals, no mutual funds, and no bonds. The company doesn’t have much of an IPO market, and there are just a few over-the-counter stocks. One advantage Robinhood has over Fidelity is cryptocurrency trading (in 7 currencies).

Neither broker-dealer offers trading in futures or traditional forex.

Taking everything into consideration, Fidelity is the winner here.


And What About Banking Features?


Robinhood has been promising a Mastercard debit card for quite some time now. It still has a wait list, which apparently means the program hasn’t been launched. If the debit card is ever released, it’s supposed to have FDIC insurance up to $1.25 million on free cash balances.

Fidelity customers can open the Cash Management Account alongside a regular brokerage account. The former comes with $1.25 million worth of FDIC protection, unlimited ATM fee rebates throughout the country, and free checkwriting.

Fidelity is the easy choice here.


Does Either Offer Global Stocks?


American Depository Receipts (ADR’s) can be traded at Robinhood. Besides a very limited selection of OTC equities, that’s about all the brokerage house is able to deliver in this category.

At Fidelity, traders can open yet another account, one designed for international stock trading. It provides access to 25 foreign exchanges with trades placed in foreign currencies. While the account has no annual fee, commissions are charged on trades. Real-time quotes are free.

We have to go with Fidelity.


Who Is Better for Research and Education?


Beginners and seasoned investors alike need information on securities in order to make informed trading decisions. Robinhood has a stock and ETF screener that is able to scan for securities based on price, market cap, and analyst ratings. News articles are linked on security profile pages. Some of the sources include Reuters and MarketWatch.

Robinhood has a blog that announces changes at the brokerage firm. A FAQ hosts lots of questions that customers will have about trading with the company.

At Fidelity, we found screeners that are able to search by many more criteria. These include PEG ratio, dividend yield, % price change today, beta, standard deviation, number of outstanding shares, oscillator technical event, and many more.

Stock profiles at Fidelity display many news articles from Reuters, Dow Jones, and more. Upcoming company events are displayed in calendar format. Another window shows a stock compared against its competitors. Something that Fidelity offers that Robinhood doesn’t is free third-party equity reports. On Tesla’s profile, there are 13 pdf reviews.

Fidelity wins again.


Which Firm Has the Better Website?


The Robinhood site is pretty basic. There is no trade bar at the bottom of the browsing window, nor is there a platform. A trade ticket stays in the upper-right corner. It does not provide data like a trade bar would. For example, there’s no real-time data on volume or bid/ask prices.


Robin Hood or Fidelity


Robinhood’s charts can be displayed the full width of the monitor, but there are only 2 graph styles, and no comparisons can be made.

Charting on Fidelity’s site provides comparisons and 6 graph styles. A chart can be detached or saved. While there is no trade bar on the site, a pop-up ticket is generated by clicking on a sell or buy icon. In this window, real-time numbers are shown for volume, bid, and ask.


Fidelity vs Robin Hood


Robinhood loses another category.


Who Has Better Desktop Software?


Active Trader Pro is Fidelity’s flagship desktop software. In the past, the broker imposed trading requirements to gain access to it; so only frequent traders could use it. Today, anyone (including non-customers) can download the software with no strings attached.

During our trial of it, we were really impressed with its many advanced features, including streaming financial news in video format, Level II quotes, and direct-access routing. There are also some very good option tools embedded in the software.

Robinhood doesn’t have a platform, and this results in another loss.


And What About Mobile Trading?


Robinhood’s mobile app requires a PIN to login. Touch ID is not available. Charting provides no tools at all, and there’s no mobile check deposit. Options, stocks, ETF’s, and cryptocurrencies can be traded on the platform. The order ticket provides the same order types as the website: market, limit, stop loss, stop limit, and trailing stop.


Robin Hood vs Fidelity


Fidelity’s app comes with Touch ID, mobile check deposit, and advanced charting in horizontal mode with several nice tools. Options and mutual funds can be traded on it, and Bloomberg streams in HD. The order ticket provides several trailing order types, which aren’t available on the Robinhood platform.


Fidelity or Robin Hood


Again, it’s Fidelity.


Does Either Broker Have Managed Accounts?


Fidelity customers who don’t trust their own financial acumen can turn over the reins to the company’s investment advisors. A computer algorithm costs just 0.35% annually. It only trades inexpensive mutual funds. For a wider swatch of investments, Fidelity offers human advisors. The cost ranges between 20 and 150 basis points per year.

Robinhood doesn’t offer any type of investment management and so loses here.


And Other Services?


Dividend Reinvestment Program: Fidelity offers the service for free. Robinhood doesn’t offer it at any price.

IRA’s: Fidelity offers them (and a solo 401(k) plan). Robinhood doesn’t currently provide any type of retirement account.

Automatic mutual fund investing: Fidelity customers, but not Robinhood customers, can sign up for recurring deposits into mutual funds.

Another triumph for Fidelity.


Our Recommendations


Mutual Fund Traders: For understandable reasons, we have no choice but to suggest Fidelity over Robinhood.

Long-Term Investors and Retirement Savers: Definitely go with Fidelity.

Beginners: New traders will find better resources at Fidelity. These include customer service, branch locations, and two chat types (human and robo), both of which are missing at Robinhood.

Stock and ETF Trading: Fidelity has better software and research materials.


Promotions


Fidelity Investments: Get 500 free trades with $100,000+ deposit.

Robinhood: Get one free $3-$100 value stock when you open an account.



Robinhood vs Fidelity Results


Robinhood lost every single category we looked at. Crypto trading is the only area where it would win. Commission-free trading is no longer enough now that the big players in the industry have followed suit. Value oriented investors might find a better deal at the completely $0 commission broker, Firstrade.