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Written by Value Seeker
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Monday, 19 November 2007 |
A review of one of the more popular brokers.
Fidelity is a great broker for both newbie investors as well as experienced one. Their customer service is top notch, their fees are low, and they have a variety of quality mutual funds if mutual fund investing is up your alley. Their web interface is also very nice. If you really know what you are doing or do a lot of shorting, Interactive Brokers may be better for you. Otherwise, it's hard to go wrong with Fidelity.
Ease of Use - 10/10
Fidelity's website is very straightforward and easy to use. Anyone familiar with online banking should have little trouble setting up an account, funding their account, and making trades.
Cost - 4/10
Their online fees are about average. However, if you have a smaller asset base, your fees will likely be lower with some other brokers, like TD Ameritrade. If you have $1 million or more in assets or make a lot of trades, you can trade at $8 a trade, which besides Interactive Brokers, is about as low as you can expect from an online broker.
Interest Rates - 6/10
Their margin rates are competitive, especially if you are borrowing $500k or more. They also provide interest on short sales if you have $500k or more short. However, their margin rates are blow away by Interactive Brokers. If you sell a lot of stocks short or borrow a lot on margin, you are probably better off with Interactive Brokers.
Customer Service - 9/10
Fidelity has excellent customer service. Wait times are generally very low for both phone service and live chat. Customer support personnel are very knowledgeable and generally quite helpful. Fidelity also has many brick-and-mortar stores, so if you want to talk to a person in person, you can do so.
Security - 5/10
Fidelity's website only has username/password, but they do have a guarantee where they'll reimburse any losses if someone hacks your account. They plan to institute a security device similar to what Interactive Brokers and E-trade has sometime relatively soon.
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