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Fidelity Cons and Pros (2022)
Fidelity Investments pros and cons, benefits and downsides. Is Fidelity brokerage good
or bad? Fidelity advantages and disadvantages.
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Pros and Cons of Fidelity Overview
Fidelity Investments is a giant player in the investment industry that services millions of investors
across the world. Fidelity has many pros but also some important cons that investors should be aware
of. We dug into it to reveal the unbiased Fidelity pros and cons.
Limited Investment Options
One of the biggest cons of Fidelity is that they don’t currently offer trading in cryptocurrency,
futures, or FOREX. By not offering these three investment types, Fidelity is excluding a large number of traders from being able to utilize their platform. It doesn’t appear that Fidelity plans to offer futures or FOREX any time soon, but they do have exposure to the crypto industry in certain areas of their business so hopefully, they will offer crypto trading to retail traders at some point in the future.
Investment Restrictions
A lesser-known con of Fidelity is that they are prone to block purchasing in certain securities that they deem to be too risky. To clarify, Fidelity was not one of the major players such as Robinhood that was caught up in the MEME stock scandal where they outright blocked trading in legitimate exchange-listed securities. The types of examples of securities that Fidelity may block purchasing in are penny stocks not meeting their SEC reporting requirements, OTC stocks that are being manipulated or investigated for fraud, and certain preferred stocks that have unusually complex features.
System Outages
Another con of Fidelity is that they have had many system outages in the past. During these outages, investors would be unable to access their accounts, their balances would be displaying incorrectly, and the only way to place a trade would be to call and wait in a queue for hours to trade with a representative over the phone. The system outages were happening mostly in 2020 and 2021 with the massive wave of new traders coming into the market and simply putting unseen amounts of pressure on Fidelity’s systems. Fidelity seems to have gotten a handle on keeping its systems up and running at all times, but this is a risk of trading with them to always keep in mind.
Not the Best Broker for Day Traders
Fidelity has an amazing suite of trading tools and platforms suitable for most investors but a con for serious day traders is that they might feel that Fidelity’s tools and platforms don’t get the job done compared to other brokers that cater specifically to day traders. Fidelity’s desktop trading platform has great overall charting features, but the charts lack a freeform crosshair cursor, the ability to drag and click on the chart and view a custom timeframe, and there aren’t as many chart customization features as other platforms. Also, the desktop trading platform just doesn’t feel as fluid and efficient as others such as
thinkorswim for example.
Fidelity’s charting features on its mobile app are horrendous. The chart only offers two technical indicators, the volume is unviewable because it is overlayed by the timeframes, and there are practically no customization features. It is virtually impossible to day trade with Fidelity’s mobile app.
Too Much Information Everywhere
A con of Fidelity that many comments mention in reviews across the internet is that Fidelity presents a ton of great information across its platforms, but the information is hard to navigate through, it’s not presented in the best-looking way, and it’s just way too much information to consume at times. You could easily spend hours browsing through all of the information on Fidelity’s website and never find what you are truly looking for.
Out of Date User Interfaces
A major con of Fidelity, which goes hand in hand with too much information being everywhere, is that the user interfaces of Fidelity’s website, app, and even its desktop trading platform all look like they were created in the early 2010s. Fidelity for years has been toying with improvements to its UI by testing different looks with its platforms but the problem seems to be that its client base is heavily skewed towards older investors and those investors tend to not like change. Consequently, Fidelity always gets mixed feedback about their proposed UI updates and is therefore reluctant to implement serious UI changes.
Mobile App
Depending on your preferences and expectations, Fidelity’s mobile app could be seen as either a pro or a con. For most millennials, the app will be considered a con due to its clunky and outdated user interface across the majority of the app. For investors who are more concerned about functionality than look and feel, Fidelity’s app will be a pro in their book as a result of the app’s great functionality.
Order Execution Quality
Fidelity’s order execution quality and price improvement program is one of their greatest pros. Fidelity is very transparent about its order quality and they claim to have saved investors over $1.9 billion on trades in 2021 alone.
Customer Service
A major pro of Fidelity is its fantastic customer service, including on the phone, chat, and in-person. Fidelity hands down has some of the best customer service in the industry with its representatives being friendly, knowledgeable, and always willing to help as much as possible.
Financial Guidance
Fidelity’s offerings of financial guidance are certainly a pro. Fidelity offers something for everybody with different programs to receive financial guidance from their licensed professionals that vary based on your qualifying asset level. The best part is everybody can start with a free one-on-one consultation simply by calling or scheduling an appointment at one of their 200+ branches across the U.S.
Managed Accounts & Wealth Management Programs
Fidelity has a number of different managed accounts and wealth management programs that are all pros. Fidelity’s offering in this area ranges all the way from its Fidelity Go account which allows investors to have their money managed starting with as little as $10 up to a private family office for extremely wealthy clients who require the highest level of service and everything in between.
Commissions & Fees
Fidelity’s low commissions and fees are a huge pro, and it might be the number one reason that so
many people use them. Fidelity offers $0 commissions on stocks, ETFs, and options. They also
have a large offering of no transaction fee mutual funds including some proprietary funds with
zero expense ratios. Fidelity charges hardly any fees at all across the board for anything.
Research Tools
Fidelity’s research tools across its platforms are best in class — making them a definite pro. Fidelity has powerful research tools for every investment type they offer as well as for the market overall. Their research tools not only include standard tools such as screeners and research reports, but they also have multiple proprietary tools such as real-time alerts with price movement probability.
Education
It is doubtful that there is any broker that provides more and better education than Fidelity does. Fidelity’s educational offering is a tremendous pro for both new investors as well as experienced traders looking to further their knowledge. Fidelity’s Learning Center on its website is home to a massive library of educational content containing information about any investing topic you can think of and the content comes in all forms to meet everyone’s different learning styles.
Fidelity Review
Read detailed Fidelity Investments review »
Pros and Cons of Fidelity: Recommendation
Fidelity's strengths far outweigh its disadvantages, and most investors will find a good value with
the broker. Active stock, ETF, and option traders will be better
served with TD Ameritrade.
Investors who want to buy mutual funds that are not in Fidelity family, should take a look at the
Firstrade.
Updated on 6/21/2022.
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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