If you’ve ever entered searches such as “What is Fidelity?”, “Can I buy crypto on Fidelity?”, or “Does Fidelity charge fees?”, you’re not alone. Regardless if you’re just starting, or wanting to switch to a better provider, Fidelity Investments is a name that permeates through all options.

In this tutorial we will cover what you need to know about Fidelity including its offerings, how it works, its fees, and the answers to the most frequently asked questions that can help you determine whether Fidelity is the right platform for you or not.

What Is Fidelity?

Fidelity means loyalty or faithfulness to a person, cause, or belief. It carries the connotation of dependability, strength, and trustworthiness. Fidelity is often used in a generalized sense when discussing relationships, whether personal or professional, but it has very specific connotations in financial circles. 

Fidelity in Financial Terms

In financial terms, fidelity can mean one of two things:

Fidelity as Trust and Responsibility:

When you hire a financial advisor, brokerage, or investment company, you are trusting them with your money, expecting fidelity to mean they are going to act in your best interest, act honestly, and protect your money. 

Fidelity as a brand:

Fidelity Investments may be one of the largest and best-known investment firms in the world, it offers brokerage services, retirement accounts, mutual funds, etc., and encompasses fidelity as trust and reliability.

What is Fidelity Investments?

Founded in 1946 by Edward C. Johnson II, Fidelity Investments is a multinational financial services corporation based in Boston, Massachusetts. For your reference, as of 2024, Fidelity has more than 5.8 trillion in discretionary assets under management and more than 15.1 trillion in assets under administration(source). It is a platform for both individual investors, financial advisors, and large institutions alike.

What Are Fidelity Investments Capabilities?

• Brokerage Accounts: If you want buy and sell stocks, ETFs, bonds, and options, you can set up a brokerage account with competitive pricing, many assets to choose from, and easy-to-use platforms.
• Retirement Accounts: This includes Traditional IRAs, Roth IRAs, and 401(k) rollovers.
• Advice and Planning: Fidelity can connect you with fee-only financial advisors and offer its own versions of robo-advisors like Fidelity Go, as well as planning tools.
• Investment Funds: Fidelity offers a vast selection of mutual funds (including Fidelity’s proprietary funds) and index funds.
• Cash Management: Fidelity offers cash management accounts which may include debit cards as well as some bill pay vendor options.
• Cryptocurrency: Fidelity allows clients to buy and hold some cryptocurrencies via their platform.

Is Fidelity Safe?

A common question when evaluating brokerage companies is: is it safe? Fidelity is considered very safe for several reasons:

• It is FDIC insured for cash balances, at applicable limits.
• It is regulated by government bodies like the SEC (Securities and Exchange Commission).
• Fidelity has a long operating history of financial stability as a company (including good customer service).
• Fidelity also uses a myriad of security protections to protect customer data and assets.

What Does Fidelity Mean for Investors?

When you are looking for a brokerage or an investment platform, fidelity means more than just a name; it means something for your investment experience.

Understanding fiduciary duty is very important in the topic of fiduciary in finance. This concept is that financial advisors and financial planners, firms or organizations have a legal obligation to act in the best interests of their clients. As part of fiduciary duty performing advisors/organizations have to provide clear advice, disclose conflicts of interests and always have the concern for protecting the client’s financial interests.

Fidelity Investments is often recognized as a fiduciary firm, meaning that all advisors would have to abide by fiduciary duty. However, it is prudent to check if your specific advisor or service are abiding by fiduciary obligations.

Fees and Transparency

Many investors ask “Does Fidelity charge fees?”. The answer is yes but Fidelity’s fees generally are lower than competitors. Fees can be:

• Trading commissions (often $0 stocks and ETFs).
• Expense ratios on mutual funds and ETFs.
• Advisory fees for managed accounts.
• Fees for account maintenance/administration (most accounts do not charge).

Fidelity tends to be clear about those fees and the transparency helps investors make informed investment decisions free from hidden costs or police limitations or fees.

Fidelity Bonds: What Are They?

You may have heard the term fidelity bonds when discussing outside of brokerage accounts. Fidelity bonds are insurance policies that protect a business against losses due to a dishonest, fraudulent, or criminal act by an employee. Fidelity bonds are vital to the business operation for trust related industries e.g., where a degree of trust is inherent in the normal course of business.

Understanding fidelity bonds can be helpful for businesses in managing their risks, especially if you own a company, or if you are involved with finances in any capacity.

How to Use Fidelity Services Effectively?

If you are setting up, investing, or doing any finance through Fidelity, here are some ways to get started.

Opening Up an Account

Opening up an account with Fidelity is a simple process:

• Visit the Fidelity website or mobile app.
• Select the type of account you want, either a brokerage account, a traditional IRA, Roth IRA, or 401(k) rollover.
• Fill in your personal information, and possible verification.
• Fund your account by bank transfer, check or by rollover.

Buying and Selling Stocks

Through Fidelity’s platform you can:

• Search for stocks by the ticker, or by the company.
• Evaluate stock data, charts, and stock research reports.
• Make buy/sell orders through market, limit or stop orders.
• Monitor your portfolio in real time.

Using Fidelity’s tools

• Make sure you utilize the research tools to evaluate stocks and funds.
• Utilize education and webinars.
• Make use of financial planning tools to project retirement savings, and additional planning for your goals.

Withdrawing Funds

Withdrawing money is simply done by:

• Requesting a transfer to your linked bank account.
• Selling your investments to allow the cash to free up.
• Scheduling distributions for any and all retirement accounts needs.

FAQs About Fidelity

Is Fidelity Good?

Yes, Fidelity is highly regarded as a trustworthy, intuitive, and user-friendly brokerage firm. It is a well-liked brokerage by both novice and experienced investors due to its well-built platform and professional support.

Can I Buy Crypto on Fidelity?

Fidelity now allows clients to buy specific cryptocurrencies, but availability is different for different clients, so if cryptocurrency investing is important toyou, check the options and fees carefully.

Is Fidelity a Bank?

No, Fidelity is not a bank but it does have some banking services (cash management accounts; debit cards, etc.).

How does Fidelity make money?

Fidelity makes money in the following ways:

• Fees for managed accounts and advisory services
• Expense ratios charged by mutual funds and ETFs
• Interest from uninvested cash balances
• Commissions for trading particular products
• Fidelity also offers other services that generate revenue (ex: asset custody in donated funds.)

How is Fidelity’s Customer Service and Accessibility?

Fidelity also offers excellent customer service and accessability. Fidelity has 24/7 customer service via the phone and online chat. This is an important characteristic because it ensures that clients can receive help whenever help is needed. Fidelity’s website and app are also well done, including accessibility to sign up and they are also designed to meet the needs of both novice and experienced investors.

Fidelity’s Role in the Construction of Financial Trust

Trust is worth everything when it comes to finance. Fidelity – the concept and the company – is trust in action through reliability, transparency, and responsibility.

To a client or an investor, when you choose a firm that values fidelity, you trust people with your money that have a legal and ethical obligation to look after your interests. This trust will inform clients’ confidence, decision-making, and ultimately financial results.

Why Fidelity Matters Beyond Finances?

While we so often discuss fidelity in financial terms, Fidelity is a principle that applies to every area of our lives:

• Relationships: Being faithful and loyal helps build trust, connection, and lasting relationships.
• Business Practices: Companies that operate with fidelity to clients and employees will build a better reputation and more trust with their business relationships.
• Personal Discipline: Fidelity to your goals, limits and values ensures you stay on track, whether with respect to finance, career, or personal growth.

Conclusion

Whether you are opening an investment account, engaging with a financial advisor or simply trying to be true, honest, and loyal, understanding fidelity will help position it as an area of trust, confidence and integrity within financial services, investing, and life.

If you’re thinking about Fidelity Investments as your brokerage or financial services firm, know that it is a company that is built upon these values and offers a wide range of products and assistance in a manner that supports you in achieving your financial goals.