Overview of Firstrade vs Fidelity Investments
Firstrade was one of the first brokerage firms to drop its trading fees all the way to $0.
Fidelity was a little behind its rival, coming in several months later. Perhaps Fidelity customers
should take a look at this little-known company. Could they possibly find a better broker?
Cost Comparison
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Firstrade
|
$0
|
$0
|
$0 per contract
|
$0
|
$0
|
|
Fidelity
|
$0
|
$49.95
|
$0.65 per contract
|
$0
|
$0
|
When it comes to pricing, Firstrade is impossible to beat! The broker has no commissions on all products.
Services Comparison
| Broker Review |
Cost |
Investment Products |
Trading Tools |
Customer Service |
Research |
Overall Rating |
|
Firstrade
|
|
|
|
|
|
|
|
Fidelity
|
|
|
|
|
|
|
Firstrade: Get 2% IRA match and up to $250 in transfer fee rebate.
Fidelity Investments: Get $0 stock commissions.
Tradable Assets
Although Firstrade quickly dropped its commissions schedule to $0, it didn't trim its product lineup. Available to trade are:
- Mutual funds (a very large list, in fact)
- Stocks (over-the-counter and penny stocks, too)
- ETFs and closed-end funds
- Bonds and other fixed-income securities
- IPOs
- Options
Fidelity has the same lineup, with one addition of foreign stocks, including the ability to trade them on local exchanges in local currencies.
Winner: Even
Financial Education
Before making an investment decision, you definitely want to know what exactly you're doing. Fidelity offers a great deal of learning materials to its clients. Starting with its website, you can find:
- Articles
- Videos
- Webinars
- In-person events at select Fidelity locations (possibly suspended during coronavirus upheavals)
- Security profiles
These resources cover both general learning (how to place an option order, for example) and specific data on securities. For example, Fidelity provides free stock reports from multiple analysts. During our research, we found 9 pdf reports on General Electric.
Fidelity also has asset screeners, which of course make finding potential trades much easier.
Moving on to Firstrade, screeners also appear; and they offer multiple search variables. Security profiles are a little different than Fidelity's, however. Firstrade pulls profiles directly from Morningstar. This method produces a lot of information; but there's only one analyst (Morningstar).
For general investing education, Firstrade has very short articles on its website. These pale in comparison to Fidelity's educational materials.
Winner: Fidelity
Cash Management
Fidelity offers a cash management account that (not surprisingly) is entitled the Cash Management Account. This is a completely separate account from any Fidelity brokerage account you may open (although securities can be traded in a Cash Management Account).
There are many great features with this account, including:
- No fees of any kind
- No minimum balance requirement
- Unlimited ATM fee reimbursements through the U.S.
- Free checkwriting (including free check reorders)
Firstrade customers can attach checks and a Visa debit card to an existing brokerage account, although doing so doesn't create another account; so this is a little different than Fidelity's system. Unlike Fidelity, Firstrade requires a minimum balance to add banking tools (the minimum is $25,000); and Firstrade doesn't offer ATM fee rebates.
Winner: Fidelity
Websites
Once you have your banking resources in place and have completed your securities research, it's time to start placing some trades.
Fidelity's website is very easy to navigate. A menu at the top makes finding your way around straightforward. During our investigation, we found the search bar (located in the upper-right portion of the site) to be very helpful.
Fidelity doesn't have a trade bar on its site; although it does have a pop-up trade ticket. Just click on buy or sell on a security’s profile and it will automatically appear. It has a lot of advanced features. Charting, too, has many tools and can be accomplished in full-screen mode.
Moving to Firstrade, we do get a permanent trade bar. During our testing, we found it to be very effective. We especially liked the ability to trade options, something that's not possible on Fidelity's trade ticket.
Charting on Firstrade's website, however, is a little weaker than on Fidelity's charting. As already mentioned, Firstrade simply uses Morningstar's software. The program isn't on the same level as Fidelity's.
Neither broker-dealer in this competition offers a browser-based platform, a notable disappointment.
Winner: Firstrade
Desktop Software
Fidelity customers who aren’t overly impressed with the broker’s website should definitely take a look at Active Trader Pro. This is the company’s flagship trading system. Available as a desktop platform, the software functions on both PCs and Macs.
During our test drive of the program, we found many professional-level tools. These include:
- Multiple layouts (you can also build your own and save it)
- Streaming video news, courtesy of Bloomberg
- Order form with several time-in-force options and order types
- Level II data
- Charting with technical indicators, full-screen capability, drawing tools, and more
Firstrade doesn’t offer any desktop software.
Winner: Fidelity
Mobile Trading
If you can’t be at your desk to trade, both brokerage firms have you covered with a free mobile app. Fidelity’s offers Touch ID, although on the day we did our research, it didn’t work. The app provides:
- Mobile check deposit tool
- PayPal transfer tool
- Ability to trade mutual funds and options
- Watchlist
- Alerts
And we really like the incorporation of podcasts and Bloomberg video news. News articles courtesy of Reuters make an appearance, and so do some of Fidelity’s learning materials.
Firstrade doesn’t have podcasts or streaming news, but it does have a Touch ID that actually works. Its trade ticket is user-friendly, but perhaps overly so because it has fewer options than Fidelity’s. Firstrade’s app can submit orders for derivatives but not mutual funds.
Winner: Fidelity
Funds
With Fidelity’s mutual fund screener, we located 9,898 securities that were open to new investors. Of this selection, nearly 3,500 had no transaction fee. It’s not possible to search by load status on Fidelity’s screener, although it’s safe to assume that roughly half this number has no load as well.
Firstrade amazingly offers 15,630 mutual funds, all of which come with zero transaction fee. Not stopping at this impressive feat, over 9,000 of the funds also have no load.
Although both brokerage firms offer commission-free ETFs, Fidelity has a better ETF center on its website. Highlights include:
- Comparison tool
- Search-by-stock tool
- Pre-installed screens
- ETF educational videos
Winner: Firstrade
Miscellaneous Services
Dividend reinvestment program: Both firms in this survey offer free DRIP service.
Portfolio management: If you ever decide that you need some professional assistance managing your investments, Fidelity has an answer for you. Actually, several. The broker-dealer offers both robo and human management packages. The cheapest option, which is the digital package, costs 0.35% per annum with no minimum balance. Old-school packages cost more and have higher minimums. Firstrade doesn’t offer any managed account options.
IRAs: Fidelity and Firstrade both have IRAs. Fidelity also has a solo 401k.
Automatic mutual fund investing: For no charge, you can sign up for auto mutual fund investing at either firm.
Fractional-share trading: Both brokers offer whole-dollar investing in both stocks and ETFs.
Winner: Fidelity
Our Recommendations
Stock and ETF trading: Hands down, it’s Fidelity.
Beginners: Either will do.
Mutual fund traders: Firstrade for its very long list of funds.
Small accounts: Firstrade.
Long-term investors and retirement savers: With Fidelity’s annuities and investment-advisory
services (neither of which Firstrade offers), we recommend it.
Promotions
Firstrade: Get 2% IRA match and up to $250 in transfer fee rebate.
Fidelity Investments: Get $0 stock commissions.
Fidelity vs Firstrade Results
Although Firstrade looks appealing for mutual funds investing and free options trading, in other areas Fidelity remains
hard to beat.
Updated on 10/7/2024.
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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