Anyone interested in investment knows that Fidelity Investments has an advanced lineup of mutual funds and that they act as a workplace retirement plan administrator.

But, did you also know that this company has a brokerage arm? If you didn’t know that, don’t feel discouraged, we are going to take a closer look at Fidelity’s low commission rates, large investment selections, and their extensive amount of research available. Like anything, there are downfalls as well, so bare in mind that we will also be looking at Fidelity’s biggest knock on their brokerage side which is their trade minimum on it’s active trader platform.

Fidelity: Did You Know?

• The commission’s rate is $4.95 per trade

• The account minimum is $0 for IRAs, and $2,500 for brokerage

• Promotion: If you make a deposit of $50,000 or more, you can make 300 commission-free trades

When Is The Right Time to Use Fidelity Investments?

• Fidelity Investments is best if you’re a retirement investor or an active trader
• Often used for premium research and low fees
• Best for no-transaction-fee mutual funds

Areas in Which Fidelity Investments Excels

Commission rates

In February of 2017, Fidelity lowered its commission rates from $7.95 per trade to $4.95. For the level of service this company provides, this is considered to be rock-bottom for online brokers.

Research Opportunities

No company compares to Fidelity in terms of the research opportunities they provide their clients with. Fidelity offers research from over 20 providers, including McLean Capital Management, Recognia, S&P Capital IQ, and Ned Davis.

If you look at the stock quote pages, you will see an Equity Summary Score, which is a combination of the ratings from these research providers. According to the Fidelity website, this gives an “aggregate, accuracy-weighted indication of the independent research firms’ stock sentiment.”

Additionally, if you look at the ETF snapshot pages, you will see a remarkable number of analyst ratings and reports and mutual fund fact sheets.

Even more impressive is that investors can take a short quiz to identify providers that match their investment style and outlook, as twenty or more research firm offerings can be a lot for one person to work their way through.

Educational support and customer service

As it offers in-person guidance and free investor presentations at various branch locations throughout the United States, Fidelity has won a lot of points in terms of customer service. Typically, these seminars offer discussions on the following: how to navigate a company’s website, when you should take Social Security and the fundamentals of technical analysis. If you are looking for support and service online, Fidelity offers an online learning center that has guides and webinars discussing similar issues.

Additionally, Fidelity’s ‘Active Trader Services’ offer 24/7 access to some of the country’s best trading specialists. However, you have to qualify for this service and this requires an investor place 120 or more trades in a rolling 12-month period as well as maintain, at the very least, a $25,000 balance in their Fidelity accounts.

Platforms and tools you can use

Offering trading via its website and mobile phone apps, Fidelity also has a desktop platform for active traders.

One of the best known advantages of Fidelity’s online trading platform is that it is easy to use and quite comprehensive. Some fan favorites include advanced screeners using the aforesaid research and strategy-testing tools. Equally impressive is Fidelity’s app for mobile phones as this has real-time quotes, a combined version of their research offerings, multi-leg options trading and a notebook to save ideas and articles from your mobile browser.

Keep in mind that if you are eligible, active traders will end up preferring Fidelity’s Active Trader Pro platform, as it includes a downloadable desktop version and a web alternative at ActiveTraderPro.com. For those interested in Fidelity’s customizable platform, you will see the following features: a pre-built market, technical and options filters, advanced options tools, and a multi-trade ticket that lets you store orders for later and place up to 50 orders at a time.

Last but not least, Fidelity also has premium tool called Wealth-Lab Pro. This is a desktop-strategy-testing software that lets investors create strategies and access up to 20 years of daily data.

Disadvantages of Fidelity Investments   

Restrictions on trading platforms

A commonly recognized disadvantage of Fidelity’s tools and platforms is that certain offers are restricted only for high-volume traders. Mentioned previously, Active Trader Pro will require an individual to trade 36 times in a rolling 12-month period. Furthermore, there are advanced tools on the platform that are available only to traders who play 120 trades per year. If you are interested in Wealth-Lab Pro, it will require you to place 36 trades per year while maintaining a minimum of $25,000 in assets.

Minimum investment

Considered to be quite high in comparison to other brokers, Fidelity has a minimum investment of $2,500 for brokerage accounts. Fidelity has a $0 minimum for IRAs, but, this will only get you so far.

Unfortunately, if you are looking to invest in mutual funds, most Fidelity funds will have a $2,500 minimum. But wait, you haven’t heard the good news yet! If you sign up for automatic investments of $200 a month or $600 a quarter, you will avoid the mutual fund minimum.

What It Comes Down To  

Here’s the bottom line: Fidelity offers multiple services for investors that go beyond retirement accounts. If you are interested in branching out of the world of mutual funds, make sure you look into Fidelity’s low commission rates, extensive trading capabilities, and access to a variety of research. Just keep in mind that Fidelity Investments work best for traders who have qualified to use its advanced platform and tools.

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