Empower Workplace IRA vs. Fidelity Personal IRA - compare cost, commissions, investing fees, trading tools, account differences, pros and cons. Which online broker is better?

Empower Workplace IRA vs. Fidelity Personal IRA

Let’s say you are enrolled in an Empower retirement plan sponsored by the company you work for. You’ve been participating in this plan for a while now and are looking to expand your horizons on the retirement savings front. Maybe you’re looking for more flexibility or a more personalized experience and have landed on Fidelity’s website. This article will look at how a personal Fidelity Individual Retirement Account (IRA) compares to an Empower workplace IRA.

Dashboard

Looking over the Empower dashboard, you’ll find a straightforward layout with clean design utilizing primary colors and clear navigation options. Up top, you have a real-time snapshot of estimated monthly income in retirement based how much you’re currently saving combined with estimated Social Security benefits and any other assets you have. It’s tidy and easy to understand.


Empower Investments


In contrast, the Fidelity Portfolio dashboard is loaded with information and options. Account balances run down the left side of the screen with tabs across the top for more detail on your positions, order history, statements and more. There are additional sections for overall market updates, news and financial calculators. While Fidelity offers a much larger variety of IRA features, the layout and design is not as clean and modern as the Empower dashboard.


Fidelity Investments


It’s not quite an apples-to-apples comparison because Empower, by the nature of its more limited offerings, does not have as much information packed onto the screen. However, the Fidelity layout could benefit from an updated style to make it easier for customers to navigate.

Investment Lineup

The Empower list of securities offerings is quite limited with only 32 options; 11 of which are Vanguard target date retirement funds. There is 1 international fund, 2 small cap, 4 each of mid cap, large cap and bond funds plus a smattering of others like a Great-West Fixed Income fund. You have access to basic screening features like comparing performance trends and filtering by expense ratio. There is also a Self-Directed Brokerage option that allows customers to tap into TD Ameritrade’s full-service platform and a much broader array of investment vehicles.


Empower IRA Account


In contrast, Fidelity offers 9,703 mutual funds alone which can be filtered by categories like Socially Responsible and No Transaction Fee Only along with the traditional filters like returns and volatility. You also have access to tens of thousands of stocks, ETFs and fixed income securities. These categories have powerful screening abilities to narrow the field by market cap, Fidelity picks and more.

Fidelity is the clear winner here if you’re looking for a wide variety of options to invest in for retirement.

Trading

Empower’s platform is not set up for trading in the traditional sense of buying and selling. You can set your paycheck contribution amount in whole dollar figures and choose how to allocate those funds. This could be 100% into one of the Vanguard target date funds or as little as 1% of your contribution into one fund, 8% in another and so on. It’s simple to use with an area that allows you to model income in retirement using sliders to visualize the impact of contribution amount, retirement age and investment style. You can also rebalance as needed, add automatic contribution increases and set up dollar-cost averaging.

For simple buying and selling within the Fidelity IRA framework, there is a tab in the navigation bar that opens a quick trade window. In here you can select the asset, quantity and order type such as market, limit and trailing stop. To access more advanced trading features, Fidelity offers the desktop based Active Trader Pro. In here, you’ll find in depth charting abilities that include different timeframes, price alerts, dozens of indicators, drawing tools plus research and news all in one place.

If you are looking to actually buy and sell securities within your IRA, Fidelity has the obvious advantage over Empower.


Active Trader Pro


Mobile Options

Empower’s website is fully mobile optimized and they offer a free mobile app. In both cases, you’ll find virtually identical navigation to the desktop website. The mobile website is somewhat clunky with how the menus load on top of one another but is otherwise easy to use. Their app, on the other hand, is very slick and intuitive with all features from the desktop site available.

Fidelity also has a mobile optimized site and free smartphone app. The mobile app is well developed with all features found on the desktop site available including watch lists, trading and money transfers. However, you won’t find a mobile version of Active Trader Pro, that is a stand-alone desktop platform. The mobile website does a good job of including all the features found on the desktop site but there are areas that, when clicked on, take you to the non-mobile optimized version of the page. The Stock Screener feature, for example, is just the desktop page squeezed onto a phone sized screen.


Fidelity App


On the app front, Empower and Fidelity are about equal in terms of performance and usability. However, Empower does a better job of mobile website optimization.

Managed Account

The basic Empower retirement platform does incur a small administrative fee from the organization sponsoring the plan, 0.2% in this specific case. Otherwise, users are free to customize their retirement plan as they see fit. However, Empower does offer a managed account called My Total Retirement. This feature links users with an investment advisor that helps create a retirement strategy tailored to specific circumstances. They monitor the account and rebalance investments as needed to hit stated goals and charge account owners a percentage of assets under management. This fee is based on a sliding scale: 0.45% for up to $100,000 under management down to 0.15% for over $400,000 in managed assets.

Fidelity offers a wider range of managed account options including a fully digital robo advisor, a hybrid robo/personal advisor, a dedicated personal advisor for wealth management and a dedicated team of advisors in their private wealth management program.

The robo advisor program, “Fidelity Go”, creates an automated retirement strategy based on your answers to a series of questions and adjusts it along the way as needed. This service is free if assets are less than $10,000 and slides up to a max of 0.35% for accounts over $50,000. If you want to include occasional 1-on-1 phone calls with a live advisor, you’ll need a minimum of $25,000 under management that you will pay a flat fee of 0.5% regardless of account size.

The Wealth Management program requires $250,000 in assets and charges between 0.5% and 1.5% for access to a dedicated investment advisor who is responsible for creating and administering your retirement plan. For those with $2 million under Fidelity management and $10 million or more in investible assets, there is the Private Wealth Management option which gives you access to a team of personal advisors who guide your retirement planning. This tier charges 0.2% to 1.04% of assets under management.

Fidelity’s hybrid management option, “Personalized Planning & Advice”, is the closest to the Empower managed option in terms of access to personal service. Since Fidelity has a $25,000 minimum and flat fee of 0.5%, Empower is the winner here. They require no minimum and the highest fee charged is 0.45% of assets.

Education

The education component within Empower includes articles around personal finance, retirement, budgeting and the like. There are also learning modules that ask you questions on topics like investment property and generate ideas on how to proceed based on your preferences. Other areas covered with this format include life events, insurance and general financial literacy.

Under the Fidelity Planning and Guidance Center, you can generate personalized reports around retirement goals, college planning, saving for a house down payment and more. There is also a personalized investment strategy generated by answering a battery of questions. Other educational areas include videos, exercises and articles around financial basics, how to budget, paying down debt and tax strategies.

While the overall subject areas are similar between Empower and Fidelity, there is a deeper catalog of topics within each subject from Fidelity.

Competitors



Fidelity vs Empower Summary

Overall, Empower is a solid platform ideally suited for folks that want a simple approach to retirement planning. There are enough investment options to allow for diversification and help is available if you need it. You can also tap into TD Ameritrade’s platform if you want a more robust menu of features within your workplace IRA.

If you’re looking to dive deep on financial markets and spend time honing a personal IRA, Fidelity is worth considering. Compared to Empower, the platform can be overwhelming with its broad range of services, markets and features. However, Fidelity is also catering to a much wider audience of investors and given this, they represent a solid step up from the Empower retirement platform.




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