Best trading platform for beginners – how about Fidelity?

Could Fidelity offer the best trading platform for beginners? This is a review of Fidelity’s services the pros and cons and what it does for the beginning trader.

• Name: Fidelity
• Services provided: Full integrated suite of financial services.
• Price/Fees: zero commissions on trades
• Website: https://www.fidelity.com
• Main features: One-stop shop for all financial services for individual investors and small businesses.
• My rating: 4.5 out of 5

 

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Fidelity at a glance for the beginning trader

Standard brokerage	Yes
Cryptocurrencies	No
Fractional shares	Yes
Research tools	10 of 10
Tutorial resources	10 of 10
Support	7 of 10

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Fidelity – who is it for?

Fidelity accounts and services are aimed at a variety of customers with different needs: They even have a neat little tool that asks you a few questions to determine what kind of account you should open

• Investing and trading accounts
• Cash management accounts
• Educational savings accounts
• Retirement accounts
• Small business retirement accounts
• Wealth managed accounts
• Charitable accounts

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Individual Investors and Traders

Fidelity’s brokerage account allows you to trade:

• stocks, domestic and international
• ETFs – including select Fidelity ETFs and others from industry leaders
• mutual funds
• bonds
• options

Online trading of US stocks, ETF, and options are available at zero commissions.

Fidelity also allows trading in fractional shares allowing you to keep all cash invested and to build a diversified portfolio even if the total sum invested in comparatively low.

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Active Trader Pro

Active Trader Pro is Fidelity’s advanced trading platform. You can customize your Active Trader Pro dashboard to show you what you want to track. This gives you access to real-time prices, you can set alerts and define entry and exit strategies.

Fidelity gives you tips and access to educational videos on how to use the platform, generate ideas and strategies, and track performance.

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Cash management

Fidelity’s cash management accounts will give you FDIC insurance, checking, and ATM services. It provides a way to manage your cash in all the usual ways and to save.

Traders and investors can also open and link brokerage and cash management accounts to get the benefits of both in one place. Businesses – can also open brokerage and cash management accounts.

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Individual retirement accounts

Fidelity has an extensive range of individual retirement accounts and plans.

• Rollover IRA – allows you to roll over 401ks from previous employers into a Fidelity Rollover IRA. You get to keep the tax advantages and you can use Fidelity advisory services.
• Traditional IRA – you can make tax-deductible contributions and pay tax-deferred on withdrawals.
• Roth IRA – contributions are made after-tax but withdrawals are tax-free provided certain criteria are met.
• Roth IRA for minors – this is for minors with earned income, like child actors or under-age entrepreneurs. They follow the same principles as regular Roth IRAs – contributions are after-tax, withdrawals can be tax-free as long as certain conditions are met.
• Inherited IRA – this kind of online account is only open to individuals. There are minimum distributions that must be met but this allows you to consolidate inherited Traditional IRAs, SIMPLE IRAs, SEPT IRAs or workplace retirement plans into an Inherited IRA with Fidelity.
• Inherited Roth IRA – like the Fidelity inherited IRA a Fidelity Inherited Roth IRA can work for Roth IRAs you inherit, as long as certain conditions are met.

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Retirement solutions for individuals and small businesses

These Fidelity products are available for self-employed and/or small businesses.

• SEP IRA – Fidelity’s Simplified Employees Pension Plans are for self-employed individuals and small businesses to get tax-deferred savings for retirement with no account minimums or fees.
• Self-employed 401k – allows self-employed individuals and individual owner businesses and partnerships without employees to make tax-deferred savings for retirement.
• SIMPLE IRA – for businesses with fewer than 100 employees these accounts offer pretax contributions and tax-deferred withdrawals.
• 401k plans – for small businesses with fewer than 100 employees. These offer the usual advantages of 401k plans: pretax contributions and tax-deferred withdrawals, employer matching. Contributions can be flexible depending on the business annual results.
• Investment-Only – retirement accounts for small businesses, also called a Fidelity Non-Prototype Account. This is a brokerage account allowing small businesses with existing retirement plans to undertake additional investments for employee retirement purposes.

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Fidelity managed funds

Fidelity is well-known for its managed funds. Each fund pursues a specific strategy clearly captured in the name of the fund. These funds cover major market indices, variations on large-cap, medium cap and small-cap, growth and value, international markets, emerging markets, real estate, US and municipal bonds, long-term, intermediate-term and short term Treasury bonds, international bonds and US sustainability designed to provide exposure to companies with higher environmental social and governance performance than peers in their sector.

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Professional advice and wealth management

Under the heading of Wealth management, Fidelity offers a Robo-adviser solution, professional adviser services and investment in Fidelity’s managed funds.

• Fidelity Go – this is a Robo-adviser solution that will manage a portfolio of funds customized to your personal needs. Fidelity charges a 0.35 percent monthly management fee, but charges no commissions or other fees for this service. There is no account minimum for Fidelity Go, but $25,000 in your Fidelity Go account will get you personalized planning and advice.
• Portfolio Advisory Services Account – $50,000 gets you professional investment advice customized for your need and preferences from Fidelity.
• Separately Managed Accounts – $100,000 to $350,000 gives you access to diversified portfolios composed of either stocks, bonds, ETFs, personalized for you with advice from Fidelity.
• Wealth management – starts with Fidelity with an investment minimum of $250,000. Fidelity will manage your investments according to your needs and preferences and charge an annual fee from 0.50 to 1.5 percent.
• Private wealth management – a minimum of $2 million gets you a professional team of investment managers at Fidelity with annual fees from 0.50 to 1.05 percent.

None of the above is going to be of interest to a beginning trader of investor but I suppose it can’t hurt to know that you are somehow rubbing shoulders with some big players.

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Planning and advice

Fidelity has some simple easy to use educational and guidance materials consisting of short instructions, graphics, calculators, and short videos on many aspects of personal finance.

• Financial basics – monthly budgeting expenses and savings, paying down debt, controlling credit, paying off student loans
• Building savings – planning for the future, annual financial health checks, building a safety net, setting objectives and creating an investment strategy
• Saving for retirement – starting early, choosing IRA plans, building a diversified investment strategy
• Tax strategy – tax-efficient investing, charitable giving, low-cost money management, cash management, 401k, IRA or Roth IRAs.
• Digital investing and advice – guides to how to use Fidelity Go Robo-adviser for retirement, building wealth, and large purchases.
• Retirement planning – saving for retirement, preparing for retirement, managing money in retirement
• Life events – leads you through examples of dealing with life’s transitions whether planned or unplanned from a financial perspective.

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News and research

This is where all Fidelity’s resources for following financial news and researching financial instruments are to be found. The areas covered are:

• News – the latest news from leading publishers consolidated by Fidelity into one place
• Watch list – create your own watch lists of stocks, etc
• Quote – for stocks, options chains, daily prices for Fidelity funds, daily prices for annuities
• Alerts – set your own alerts for price movements
• Mutual funds – search and compare mutual funds
• Stocks – research stocks, stock screeners, expert strategies, research firms, research firm scorecards, search reports
• Preferred securities
• ETFs
• Closed-end funds
• Bonds, fixed income and CDs – research, tools, recommendations, and tutorials
• ETFs – search, compare and expert opinion and commentary and related tutorials
• Options – scans, screens, expert analysis, trading ideas,
• Markets and sectors – analysis of the performance of different markets and industry sectors
• IPOs – a calendar of upcoming IPOs with possibilities for Fidelity customers to subscribe
• Annuities – deferred fixed and deferred variable

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Fidelity learning center

Fidelity’ Learning Center has an extensive range of educational materials including videos, articles, webinars, and courses going into greater depth than the planning and advice center. The learning center materials cover:

• Investment products
  • Mutual funds
  • ETFs, ETPs
  • Fixed income and bonds
  • Options
  • Options strategy guides
  • Stocks
• Trading and investing
  • Technical analysis
  • Fundamental analysis
  • Markets and sectors
  • Trading
  • Technical indicator guide
  • Tools and demos
• Personal finance
  • Retirement planning
  • College planning
  • Charitable giving
  • Family financial safety

Fidelity also offers live events, on-demand webinars, and strategy coaching sessions.

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Fidelity – the pros – for the beginner

Fidelity does have an extensive range of easy to use tutorial materials including courses suitable for a beginning trader of investor.

To compete with other brokers Fidelity also provides zero-commission trades on plain vanilla stock trades.

Another plus for Fidelity is they allow you to trade fractional shares, so you can build a diversified portfolio and stay fully invested starting with a comparatively low investment sum of a few thousand dollars.

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Fidelity – the cons – for the beginner

Fidelity does not yet provide access to trading crypto-currencies.

Fidelity is a large financial services provider that has been around for more than 70 years. So it’s not surprising to see a number of complaints against the company. Most complaints seem to relate to poor customer service and disputes over what may or may not have been promised over the phone and technical issues setting up accounts. Many of Fidelity’s competitors seem to experience similar customer complaints. To learn about complaints against Fidelity check here.

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Fidelity – how does it rank?

I’d say 4.5 out of 5 for Fidelity. I’ve held Fidelity funds for over 20 years now and I wasn’t aware of all their other services tools and available resources until I was doing research for this piece. I’m not sure whether that was my fault or their failing. To see how Fidelity compares with its main competitors, check here.

My recommendation

If you are a beginning investor or trader looking for a brokerage account, I would say you couldn’t go wrong with Fidelity.

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Are ready to get serious about investing in your own financial education? Then check out membership of the  American Association of Individual Investors, the AAII.

The AAII is a nonprofit organization, dedicated to the financial education of its members. Your membership of the AAII will give you access to courses and resources on stock investing, financial planning, and how to manage your retirement finances.

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