Fidelity investments one of the biggest brokers in America wants to be the go-to place for small investors, but is it the right place for beginners who are investing on their own?
Today I’m going to answer that question based on my personal experience of what the company offers along with doing a deep dive into Fidelity’s trading platform.
Fidelity Investments Product Offerings
I’ve personally been a Fidelity customer since 2005 and I chose them for a couple of reasons:
- They offer a full range of investments of stocks, bonds options, and everything in between
- They allow me to manage my individual account along with all my retirement accounts in one place
Fidelity also makes it easy to monitor and track the performance of the investments you own without having to spend a lot of time doing it.
On top of these reasons I and many other small investors really like Fidelity because of their commitment to offering high quality, low fee investment products.
Fidelity Account Costs and Trading Fees
You can actually open a Fidelity account with just one dollar and have no associated account fees.
In fact, Fidelity actually has a whole suite of products under their investment fund offerings that have no minimum initial purchase requirements, no trading fees, and no expense ratios.
This means that they have changed their business model to compete on value instead of making a bulk of their money hitting customers with fees.
I know it sounds crazy, but Fidelity is basically giving away high quality index funds for free.
You might be wondering why Fidelity Investments would offer products without fees?
If they aren’t charging a fee, then how are they making money?
Well it’s actually pretty simple and it’s a marketing idea that is used in almost every industry. So let us explain.
Have you ever gone into a fast food place like McDonald’s and they have a special like; buy two burgers get one for a dollar?
Well if you did take that deal, I bet you didn’t leave spending just a dollar. I bet you spent more!
Fast food restaurants know that all they have to do to get you to spend more money with them is to actually just get you into the store. The same goes for Fidelity Investments.
They want to get you to be their customer and they’re betting on the idea that they give you some value for free then you’ll become a long-term customer and buy more products.
Products that they can actually charge you for.
Buying Other Brokers’ Popular Products
Another way companies like Fidelity Investments are better at servicing their customers is through products they are giving you access to on their platform.
Not only do you have the ability to buy Fidelity’s full range of funds, you can also buy products owned by other companies.
For example, you can buy Vanguard’s popular VTSAX index fund on the fidelity platform.
It’s worth noting, if you choose to buy an investment that is actually offered by another company, Fidelity will most likely charge you a trading fee for the transaction.
This fee may be a deterrent to some buyers, but at least you don’t have to open another account at another brokerage just to get access to their products.
You’re paying for convenience.
Other Services Provided
Outside of the funds, Fidelity offers financial advisors. Financial advisors help you create an investment portfolio based on your needs with the funds Fidelity has to offer.
This can make things simple for beginners, but you will have to pay a fee based on the amount that you’re investing and the financial advisor may have a monetary incentive to steer you into funds that are better for them and for Fidelity.
It may not be the best for you so there could be a conflict of interest.
It’s because of these fees and issues that we’ve had in the past with financial advisors, that we decided that it was better for us to learn how to manage our own investments and teach others how to do it as well.
If you’re interested in learning how to invest in your own, you can check out our course here .
If you’re still debating if fidelity investments is the right broker for you, I would like you to consider their trading platform.
I feel that Fidelity can do a much better job making their platform easier to navigate for beginners.
The platform is a little too busy and not intuitive.
However, if you’re already a customer or you’re thinking about switching to Fidelity, we thought it’d be a good idea to show you how to navigate through some of the noise and get to some of the most useful sections of the fidelity trading platform.
We made this video which includes a tutorial focusing on three actions on this website
- researching investment products
- buying an investment
- selling an investment
We also focus on three types of investments; etfs, mutual funds, and stocks.
Hopefully in this article and video we helped you decide if Fidelity Investments is the right broker for you.
If so, please show these twins some love and subscribe to our YouTube channel and share this article with someone you care about.
Is Fidelity Investments Right For Beginners? (Review + Tutorial)
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Nicole is a partner at Wealth Twins LLC. She holds a B.A from Columbia University and an M.B.A in Financial Instruments from New York University. She has worked in Investment Banking and Financial Services for 15 years and retired early in her 30s because of Financial Independence. She is an entrepreneur, investor, and passionate about teaching others how to reach Financial Independence.