TD Ameritrade 300
Fidelity Investments rating

Fidelity Cons and Pros (2021)

Fidelity Investments pros and cons, benefits and downsides. Is Fidelity brokerage good or bad? Online trading account advantages and disadvantages.

Pros and Cons of Fidelity Overview

Although Fidelity is well known for its many positive attributes, the broker also has some drawbacks. This article will analyze Fidelity disadvantages and advantages, and see how the firm compares to its major rivals.

Fidelity Pros

Fidelity has a history of providing excellent customer service. The broker's representatives are usually well trained and can provide assistance with a wide variety of financial issues. The company has more than 180 brick-and-mortar branches located across most states. Fidelity's phone service is open 24 hours a day, 7 days a week. Furthermore, the Fidelity website has on-line chat, a nice feature. Phone numbers are also available for clients who travel internationally. These services are much better than those offered by Vanguard, who doesn't provide 24/7 service, on-line chat, or local branches.

Fidelity has a good selection of mutual funds. The broker's screener returns 11,521 products that are open to new investors. Approximately 3,500 have no transaction fee, and about half of these also come with no load. Merrill Edge has far fewer (3,500) funds available, with less than a thousand carrying no load and no transaction fee.

Fidelity has some good trading technology. It is the only low-cost broker that has a platform for Apple TV. It also offers an app for Apple Watch. Both are free to use.

The firm offers an advanced desktop trading system for active traders. Other brokerage houses don't offer a platform. WellsTrade and Vanguard are two examples.

Fidelity cons, pros

Website charting on the Fidelity site comes with some helpful technical indicators. These include Keltner Bands, MACD, and the relative strength index. Drawing tools and company events are also available. A graph can be displayed full screen, and the software is very customizable. A chart on some other brokers' website, by comparison, cannot be displayed the width of the monitor.

Fidelity operates its own lineup of mutual and exchange-traded funds. They are always free to trade on the broker's website. There are 316 Fidelity mutual funds and 21 ETF's. Other brokers, including E*Trade and TD Ameritrade, don't operate their own funds.

The Fidelity website has a very large selection of educational materials. These resources would be ideal for new traders who need some guidance navigating the financial world. There are articles and videos that cover many different areas, including fixed-income products, estate planning, retirement issues, how to trade options, and many more. Several other firms, including Interactive Brokers and Firstrade, have far fewer materials.

Fidelity customers also have access to very good stock research tools. The broker's equity screener can look for stocks based on criteria such as earnings surprises, short interest, dividend yield, and much more. The tool has more searchable criteria than WellsTrade's screener.

Free stock reports can be downloaded from Fidelity's website. The broker offers reports from many different analysts, including S&P Capital IQ, Ford Equity Research, Zacks, Ned Davis, and more.

Although Fidelity has many self-directed accounts, the firm also offers financial advice and portfolio management. Limited investment advice can be obtained for free over the phone. More in-depth advice can be secured for an additional fee. Managed portfolios begin at 0.35% for a robo-advisory service, and increase up to 1.7% for human advisors who trade stocks and fixed-income products (M1 Finance offers this service free of charge).

Cash management features at Fidelity are very generous. The broker sends out checks and a Visa debit card free of charge. They carry no annual fees. ATM fees are also refunded by the broker.

Fidelity Cons

The most important among Fidelity Investments cons is high commissions to buy mutual funds that are not in the no-fee program (most popular Vanguard funds will be there) - $49.99 per transaction. To compare: E*Trade is charging $19.95 for the same trades, and Firstrade is charging $0 to buy or sell all mutual funds.

Expensive robo-advisor: Broker charges 0.35% of assets annually to use its Fidelity Go robo-advisor service which will cost an investor a fortune over time. In contrast, Ally Cash-Enhanced Managed Portfolio has $0 fees.

High margin rates: Another major Fidelity con is high margin interest rates on borrowed cash

The Fidelity mutual fund screener has fewer criteria to search by, compared to the screeners of several other brokers. These include Merrill Edge and TD Ameritrade. Fidelity's screener also only has the ability to specify NTF funds, not funds with both no load and no transaction fee.

Fidelity does not offer futures, forex, or crypto-currencies. TD Ameritrade does offer these products.

Several discount brokers are affiliated with large banks, a relationship that some investors may find appealing. Many of these brokers also offer discounts to banking clients. Unfortunately, Fidelity has no such relationship or discounts.


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 Webull. Investors who want to buy mutual funds that are not in Fidelity family, should take a look at the Firstrade.