Fidelity Investments

Fidelity Investments was founded in 1946 by Edward Johnson II as the Fidelity Management and Research Company. Its first fund was called the Fidelity Fund, and Edward Johnson hired Gerry Tsai to manage the fund. Gerry grew the Fidelity Fund to $1 billion and started the tradition of growth mutual funds like the Magellan Fund and Contra Fund.

Fidelity Investments is based in Boston, Massachusetts, is privately held, and is still run by the Johnson family. Fidelity has over 28 million customers, over $7.4 trillion in customer assets, and $2.6 trillion in global assets under management. It has over 40,000 associates and is in 8 other countries across North America, Europe, Asia, and Australia. In the US, it has 10 regional offices and 190 investment centers.

Given the breadth and depth of its financial management experience, many corporates are using Fidelity Investments to manage their 401K, 403B, and corporate pensions.

Why I Use Fidelity Investments

The primary reasons I use Fidelity Investments for my primary investment platform are:

My current employer uses Fidelity for managing its 401K and pension. This 401K plan has a self-directed option called BrokerageLink which allows you to buy and sell stocks, mutual funds, ETFs, bonds, CDs, and other instruments.
My previous employer, IBM, uses Fidelity for managing its 401K and pension.
My wife’s employer uses Fidelity for managing its 403B.
My wife’s and my IRAs are all at Fidelity.
My brokerage accounts are all at Fidelity.

So I can sign into Fidelity and manage the majority of my investment accounts. Fidelity is a full function investment company, supporting almost any type of account or financial instrument for normal customers. In addition, Fidelity has become a leader in reducing investing costs by offering no minimum on accounts, zero expense ratio funds, and low fee trades.

Fidelity Investments also supports:

College savings 529s, Health Savings Accounts (HSA), custodial accounts, and cash management accounts.
An affiliated credit card which gives 2% back which can be put into one of our brokerage accounts.

You can by and sell equities, mutual funds, bonds, CDs, options, and other financial instruments.

Setting Up An Account

Fidelity makes it easy to set up a new account. There is no charge for a new account, and there is no minimum amount. You can easily set up a joint account, a personal account, or a custodial account for Universal Gift to Minors Act (UGMA).

For one login (userid and password), you can have one or more financial accounts – brokerage accounts, IRAs, cash management, etc. So when you login, you have a full view of all of your accounts.

One View of Your Investments

Because many corporations use Fidelity and you can open many types of personal accounts, you end up with one view of your financial portfolio. Or at least the majority of your assets.

For 401Ks and pensions, the main Fidelity site sends you to their NetBenefits site which is tailored for each corporation’s investment plans.

Access

Fidelity has web, mobile, and voice access. The main web site, https://www.fidelity.com, supports all its features and functionality. There is a mobile application for phones and tablets. And there is voice access.

Fidelity also has a desktop application called Active Trader Pro for active and technical traders. It is Fidelity’s version of TD Ameritrade’s ThinkOrSwim application.

You can walk into a Fidelity office and talk to an advisor. You can also talk to advisors on the phone.

I primarily use the web site and the mobile applications. I can view my status and execute trades on the tablet and phone applications. I probably sign onto Fidelity 10-15 times a day.

Below is a ‘redacted’ view of what you will see when you login.

Features

Obviously Fidelity’s site offers a view of your portfolio and allows you to buy and sell financial instruments, but the real strength of Fidelity is in its other features.

The research section of Fidelity is really good with the ability to search for stocks using over 100 criteria.
You can also research mutual funds, ETFs, bonds, and CDs.
Fidelity has an excellent Learning Center with articles, videos, and webinars.

Fidelity also has retirement planning tools, managed accounts using Fidelity Go (0.35% per year), and budgeting applications.

I found they also have something called Full View which is similar to Personal Capital’s net worth view of your portfolio.

Fidelity Stock Research

Ease of Use

The advantage of using Fidelity is having my pensions, 401Ks, IRAs, and brokerage accounts all in one place. I can see all my balances and performance of my portfolio. I can setup alerts and be messaged via emails and text messages.

Because they allow you to open multiple accounts with no charge and minimum, you can start a ‘bucketing’ strategy where you have a separate account for various purposes:

Escrow accounts for property taxes.
Emergency funds.
Early retirement funds.
General Roth IRA accounts.
An account for your kids or grandkids.

Plus if you have a Fidelity credit card, you can manage it from the main Fidelity web site.

Other features that I find important include:

I can open joint accounts with my wife. She can view and manage those accounts from her login account.
I can specify beneficiaries on all of my accounts.
You can specify automatic dividend reinvestment on your accounts.
Trading supports all the variations of limit orders.
You can download your tax information using TurboTax.
Other sites like Personal Capital or Mint can easily access your portfolio information from Fidelity.

I was really disappointed when I tried RobinHood and found I could not specify beneficiaries or open a joint account. At Fidelity, you can.

Trading Stocks

When you create a trade, there are several options you specify:

Which account to use. It will show you the balance of that account.
Stock symbol. It will show you the current price, bid and ask values, and volume.
Buy or sell. You can sell a certain number of shares or specify all.
Quantity. There is a little calculator on the web site version that allows you to calculate the number of shares to buy for a certain amount of money.
Type of order – Market, Limit, Stop Loss, Stop Limit, Trailing Stop Loss, Trailing Stop Limit.
Limit price if a limit order.
Time in Force. Usually for that day but can be Good until Cancelled or other options.

Most trades are $4.95 although I have seen extra fees up to $1.00 when selling.

Costs

Fidelity is becoming a disruptor in the financial industry by offering zero minimum or no fee accounts. And they currently offer four mutual funds with zero expense ratios. These are trying to go head to head with Vanguard by offering lower expense ratios than offered by Vanguard.

Their trading costs are $4.95 per stock trade which is the only negative I have found, as compared to RobinHood’s no fee trades.

I think this trend towards zero or low fee will disrupt many financial institutions that manage mutual funds for 401Ks.

Your Thoughts

What are your thoughts? Do you like Fidelity Investments or use a different investment platform? If so, please share your experience with everyone in the comments.