Fidelity Investments Review

Fidelity Investments Review
Fidelity Investments Review

Fidelity International is a global investment solution provider that caters to individuals, financial advisers, and institutions equally.

Summary

Fidelity Investments set up shop in 1969 as the international arm of Boston-based Fidelity Investments. With clients around the world, Fidelity is a well-known global brand with a total client asset value of $309.1 billion USD (as of June 2019).

The provider is a more traditional ISA and SIPP provider and not necessarily a sort-of digital maverick. Their 50-years of experience explains why Fidelity Investments still offers personalised services, like phone service, in person meetings, and access to relationship managers as well as their online investment platform, even for clients who have less than five figures in their accounts.

Fidelity International Review

Fidelity International Review

Should you go with a provider who’s ‘Old Dependable’ as your online broker? Or is your investment style better suited to the innovators whose aim is to shake things up? We walk you through Fidelity’s product below.

Product Range at Fidelity International

Fidelity.co.uk offers the standard investment and retirement accounts including:

  • Stocks and Shares ISA
  • SIPP
  • Investment Account including Index Funds and Mutual Funds
    Fidelity Junior ISA
  • Junior SIPP

The international arm of Fidelity focuses solely on investment banking and wealth management, so you won’t find traditional savings accounts here, however for US citizens there is the option of Checking Accounts and Credit Cards via a US Fidelity account, similar to TD Ameritrade.

Fidelity also doesn’t accept the transfer of Lifetime ISAs: it provides stocks and shares and junior ISAs only.

Fidelity Investments Research Services & Tools

Fidelity offers a helpful introduction to investing geared towards customers with a focus on retirement planning.

The platform provides a combination of retirement planning calculators, introductory videos about investing with fidelity, and guides that promote the ease and value of taking control of your pension via a SIPP account. There’s also a tool that helps you identify the best account for your needs and provides helpful charts to compare investments.

The tools are geared towards those who aren’t otherwise regular investors and they break down data using easy comparisons — even if you don’t consider yourself someone who is ‘good with numbers.’

We like that they offer more comprehensive views of investments without skipping some of the tools that make its competitors so attractive for first-time investors. For example, the PathFinder tool helps you choose a fund according to your preferred risk and whether you’re looking for growth or income funds.

The Investor Finder tool also gives you a road map through other types of investments offered, including funds, shares, ETFs, mutual funds and investment trusts. Simply choose the investment type that best suits you and then use the filter function to find your ideal match.

For those who are already more involved with their accounts, Fidelity also provides market news, including a daily market review and a regular podcast. The team also delves into investment ideas, personal finance, and insights into the company’s own market perspectives. These published items are useful, and the team of writers are largely veteran journalists with decades of experience in financial reporting — and it shows.

Beyond this, Fidelity International has an internal commitment to providing proprietary insights via their online broker investment platform. The scale of the company means that its portfolio managers and financial analysts do their research in the field rather than through an RSS field of aggregated online news. The in-house research team provides insights on 90% of fund holdings, giving portfolio managers plenty to work with.

In other words, whether you choose to take control of your accounts or put your trust in the hands of one of Fidelity’s advisors, you can be sure that you’ll enjoy a research-focused approach to investing.

Fidelity Investments Fees & Charges

Fidelity charges an annual fee on a tiered structure according to the value of your investment. Although Fidelity claims the account fee structure is simple, it does have more caveats than other services.

Let’s begin with the charges Fidelity doesn’t apply. There are no charges for the following transactions:

  • Set-up
  • Annual
  • Account closure
  • Fund switching
  • Fund transfer
  • Tax relief re-investment into funds
  • Exit fees

Fidelity also leaves behind most pension charges, like administrative charges on drawdown accounts, transfer charges, and pension splitting on divorce.

The complications begin once fees are introduced.

For example, accounts valued at less than £7,500 pay £45 a year (or £3.75 a month) in fees. However, the fee changes to 0.35% if you use a monthly regular savings plan and invest £50 a month or more (even if you only have a few thousand pounds in the account).

The fees aim to encourage investors to save regularly, and £50 a month for retirement seems like a small ask. However, it does hurt people who invest in a lump sum, such as through their tax refund or through an inheritance structure, and those who can’t commit to £50 every month.

The next tier is Fidelity’s standard service fee: 0.35% for accounts worth between £7,500 to £249,999.99.

Once you reach £250,000, then you enjoy a significantly lower rate of 0.2% up to £1 million. There’s no further fee assessed on anything above £1 million.

However, the fees differ for Junior ISA and SIPP products: these accounts pay £25 a year on investments under £7,500. Additionally, the £25 fee applies even when you have multiple accounts. So if you have an account with £5,000 and another with £3,000 in it, then you pay £25 per account even though both accounts feature a total of over £7,500.

Fidelity also assesses fund management fees on a relevant accounts.

The cost for managing funds begin at 0.06%, and these fees depend on the individual fund’s characteristics to include:

  • Bid-offer spread
  • Performance fee
  • Fund manager buy/sell charge
  • Finally, you’ll pay share dealing charges (including investment trusts and ETFs) for each transaction.

Although Fidelity charges a levy of £10 per deal (when made online), this can be quite expensive. Other providers, like Hargreaves Lansdown tier the charges to give those who are more hands on a break. There’s no winning or losing with Fidelity’s £10 deal charge: it’s a simple flat fee. Whether or not it benefits or hurts you depends on how often you intend to deal shares. You know yourself what the fee will mean for you.

Phone trades come at the steep cost of £30 per deal.

Opening an Account with Fidelity Investments

You can open all available accounts online with only a few pieces of information:

  • National Insurance number
  • Debit card details (for a lump sum payment)
  • Bank details (for a regular savings plan)
  • All new accounts require a minimum initial investment of £50.

Transferring Your Investments to Fidelity Investments

Transferring your investments is easy and takes mostly online in a few minutes. (Though, it takes weeks for the transaction to reach completion.) You need the same details as you might to open an account (e.g., NI number, contact details) as well as the details of your current provider.

Before initiating a transfer, you should use the Fidelity Investment Finder tool to see if the investment you want to transfer is also available with Fidelity.

Existing stocks and shares ISAs can be transferred to Fidelity. If Fidelity doesn’t offer the same stocks and shares, it sells those assets and then places them into your Fidelity ISA as cash so you can reinvest it.

Note: Fidelity doesn’t allow you to transfer in a Junior ISA from another provider.

We like that Fidelity offers to cover exit fees on investments moved to Fidelity and held through the Personal Investing service. It won’t apply to all accounts, and you should read the T&Cs. However, it can save some investors up to £500 on fees.

It’s worth noting that if you choose to transfer out of Fidelity, there are no exit fees. However, you may face some transactional fees, including fund sell charges.

Fidelity Investments ISA Review

Fidelity’s Investment ISA is a popular product that offers choice to those who want it and also gives you access to expert guidance when you need it.

As a Fidelity Stocks and Shares ISA account holder, you can choose from over 3,000 funds and a significant choice of UK shares, bonds, ETFs and trusts. Your experience can be as independent or plugged-in as you like by either selecting your own investments or choosing a ready-made package via the investment platform.

The combination of the two offers the best of both worlds. For example, Virgin Money only allows you to choose from one of five funds. At the same time, other services require you to all the work yourself, which can be too much of a burden for new investors.

Fidelity International ISA Review

Fidelity International ISA Review

Perhaps the biggest issue for new investors is the minimum account value. You either need to commit to £50 a month which is a very low barrier to entry and you can even deposit via credit card (get those points!) or you need to pay in a minimum of £1,000 in a lump sum. So, if you have £500, you can pay it in installments but you can’t deposit it into a new account. The lack of flexibility with this is somewhat unique compared to the more ‘online competitors,’ and it may be off-putting, particularly given that the fees for accounts under £7,500 are so high.

For example, if you agree to deposit £50 a month, then half of one of those monthly payments will come out of your account as a service fee (roughly £21). The fee also doesn’t improve until you reach £250,000, and it doesn’t include any adviser fees.

Fidelity Investments SIPP Review

Fidelity’s SIPP product offers the same access to the 3,000 funds and other investments offered through its SIPP. You’ll also get access to the planning tools and insights found across the Fidelity brand.

The barrier to entry is lower for the SIPP product: it requires that you save £40 a month at a minimum to hold an account with Fidelity. However, the lump sum option is also available.

One of the standout features is that Fidelity’s SIPP also offers zero drawdown fees. The lack of drawdown charges along with the 0.35% fee may make it attractive compared to providers like James Hay or Selftrade, both of which charge an annual drawdown fee of over £100 in addition to the platform fee.

Customer Service

Fidelity’s status as a global brand and investment powerhouse shows in its customer service. The provider’s customer service and access to professional staff compares to Hargreaves Lansdown (though, HL does charge 0.5-1.0% more in fees than Fidelity).

Fidelity is one of the few brokers who will meet clients in person without the need to hire a personal financial or investment advisor. The company opened an Investor Centre in London (111 Cannon Street) to do just that. Customers can pop into the office to ask questions, seek tax and account information, and attend free individual retirement consultations with Fidelity’s advisers.

These face-to-face sessions exist for customers to work out the correct account options or learning about retirement plans. A free retirement consultation will provide you with:

  • Information about approaching retirement
  • Fidelity Investment accounts Options
  • Income options at retirement
  • Pension facts (including tax rules)
  • Practical advice about personal finance
    Investment strategy guidance
  • Saving Accounts available
  • Pension consolidation guidance

They won’t include regular or ongoing personalised investment advice. Though, you can seek it through other relationship managers. Even still, the free service is valuable as the team will also help you with standard legal documents, like Power of Attorney forms.

Fidelity International Review Summary

Fidelity International is a well-established global name, and you can expect access to exceptionally well-researched resources and advice that even offers a level of personalisation not available from online or robo-investors.

That being said, the fees and services cater to those with relatively mature accounts. The annual fee is very expensive for someone who is just starting out: you wouldn’t necessarily want to open your first account here or transfer an existing ISA or SIPP until it’s worth at least £10,000 — if not more. If you’re investing only the minimum, you could spend a significant portion of one month’s deposit just on the fee.

However, if you want the kind of handholding needed to make the most of a new account, you will get it from Fidelity. What’s more, it offers some really helpful features, like retirement planning meetings (also offered by competitors like Hargreaves Lansdown) but at a lower price (Fidelity charges 0.35% on accounts under £250,000 and HL levies a 0.45% fee).

Those who are serious about saving and intend to build their portfolio quickly (from the ground up) may find that Fidelity is a happy medium between the low-cost investment providers and the high-fee wealth management advisers.

Who Owns Fidelity Investments?

Fidelity Investments is privately owned by CEO Abigail Johnson and her family that owns 51% of shares, the remaining 49% is owned by current and former employees

How Safe is Fidelity Investments?

With over 2.4 million clients globally and over £305.9 billion in client assets and founded in 1946, Fidelity Investments is big and stable. Apart from that in the UK it is regulated and supervised by the UK FCA

How do I Close my Account at Fidelity Investments?

Log into your account, click “Manage Investments” and select “Buy, Sell or Switch”. From here you can sell down your investments and withdraw your cash

How to Withdraw Money from Fidelity Investments?

Super simple, just log in to your account, click “My Accounts” and then select “Manage Investments”, from here you can click “Withdraw Cash

How to Contact Fidelity Investments?

From the UK you can call: 0333 300 3350 or send a secure message from the portal once you have logged in

Is Fidelity Investments any Good?

Fidelity Investments suits those with larger mature portfolios, for people starting out in their investing journey we would recommend Interactive Investors

Peter Field - CFA

Peter Field – CFA

Editor in Chief

Peter uses his many years of experience to oversee the reviews and guides published on InvestingReviews.co.uk

When not at his desk, Peter is training for his next triathlon and trying to be a great dad and husband.

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