Fidelity vInvestments ersus Wealthfront brokerage firm comparison: IRA, fees, commissions, benefits, pros and cons. Which investing service to choose?

Overview of Fidelity and Wealthfront

Fidelity and Wealthfront provide a range of financial services that some investors may find appealing, while others may want to pass. This survey is going to compare the two brokers in important areas and see if one is the ideal pick.

Investment Research

Wealthfront isn’t a typical full-service brokerage firm. As such, it doesn’t offer any information on individual assets. During our testing, we couldn’t find any educational or research materials. There is no stock screener, for example. We did find some tools for personal finance. One program shows the impact from a major purchase, like a wedding or the purchase of a car.

During our appraisal, we found much more at Fidelity’s site. Equity profiles have enormous amounts of information, from financial statements to option chains. Widely-traded stocks have no less than ten research reports from independent analysts. Fund profiles also have lots of vital data, such as portfolio composition, commentary, and Morningstar rating. The broker’s education section is even more impressive, offering countless resources on a wide range of financial topics, including not just investing but also charitable giving, college planning, and more. Not to be outdone by its website, the company also hosts in-person events at some of its branch locations.

We have to give the nod to Fidelity here.

Range of Products

Wealthfront offers robo investing without self-directed choices. Thus, it only provides trading in low-cost ETF’s, and these are selected by the company’s computer algorithm. Other investments are not on tap.

Fidelity offers low-cost ETF’s, expensive ETF’s, fixed-income securities, equities, mutual funds, closed-end funds, derivatives, annuities, and life insurance.

Wealthfront loses the second category.

Portfolio Management

Wealthfront’s computer program buys and sells low-cost funds in return for 0.25% of assets per year. The minimum starting investment is $500. Some promos online have been offering the first $5,000 managed for free. At this time, the brokerage house does not offer any old school management services.

Fidelity does offer traditional management, and the price ranges from 0.20% up to 1.50% per annum. The minimum starting deposit varies from package to package, with a range of $50,000 to $500,000, much higher than Wealthfront’s robo service. The advantage, however, is that other investments besides ETF’s are on tap, including fixed-income securities and equities.

Fidelity hasn’t fallen behind in the 21st century; it has a robo service called Go that has no minimum deposit requirement. The price is 35 basis points per year. While this sounds more expensive than Wealthfront’s digital advisor, Fidelity uses mutual funds in its Go service with zero expense ratios. The ETF’s in Wealthfront’s charge management fees, which Wealthfront clients will have to pay.

Fidelity is certainly the better option here.

Trading Software

Due to Wealthfront’s automated style of investment management, the broker hasn’t devoted much to trading tools. There is no trade bar on its website, and you won’t find a platform anywhere. There are portfolio monitoring tools that show performances of various asset classes that make up a portfolio along with features that permit tax-loss harvesting and direct indexing. We did find Wealthfront’s site easy to navigate.


Wealthfront vs Fidelity


During our testing, we were much more impressed with Fidelity’s technology. Its website is easy to use and offers a lot of useful trading resources, such as a trading ticket that automatically appears after clicking a buy or sell icon. It can be used to send orders for funds and equities.

The broker’s option trading tools also provide easy-to-use resources to find derivatives. Besides calls and puts, many strategies are pre-programmed into Fidelity’s option trading tools. A probability calculator and profit-loss diagram help with analysis.


Active Trader Pro


Charting on Fidelity’s site is also very useful. We were able to overlay technical indicators, use drawing tools, switch between chart styles, and make comparisons. A graph can be expanded full screen, another helpful feature.

Fidelity is the easy pick in this category.

Mobile Platforms

The Wealthfront mobile app is fairly simple with no advanced features. We didn’t even find a check deposit function, which is a real disappointment nowadays. There is a tool to transfer funds via ACH. Alerts can be established, one of the few highlights.

On Fidelity’s mobile platform, we found check deposit, live streaming of financial news, option chains, mutual fund trading, and market news. We especially liked the inclusion of a learning center, a feature that beginning investors will find helpful. Other useful features include bill pay, watchlists, and PayPal transfers.


Fidelity Mobile App


We’ll take Fidelity, here, too.

Other Tools

Besides its mobile app and website, Wealthfront does not offer any other resources. Fidelity is a different story. We found a very useful smartwatch app that is able to function with Apple devices. It can deliver real-time market data, quotes, and alerts. Not being satisfied with this nifty piece of tech, Fidelity has also rolled out an app for Apple TV and a skill for Amazon Echo and Echo Show.

Last but not least is Fidelity’s very robust desktop platform Active Trader Pro. Although it costs nothing to use, it delivers advanced derivative tools, good charting, extended-hours trading, and more.

This category is awarded to Fidelity.

DRIP Service

Wealthfront uses Modern Portfolio Theory to manage its customers’ assets. Because of this, the broker takes dividends an account receives and reinvests them in ETF’s that have declined in price. Dividends are not necessarily reinvested in ETF’s that pay them.

Fidelity offers different choices for different account types. With its robo service, dividends and capital gain distributions are automatically reinvested in whatever mutual fund that paid them. For self-directed accounts, the broker offers a Dividend Reinvestment Plan free of charge. It’s also possible to have cash distributions sent to a core account.

We think Fidelity is the better choice here.

Our Recommendations

For robo investing, Wealthfront looks cheaper on the surface, but we think Fidelity’s zero-fee funds will meet or beat Wealthfront’s overall cost structure. Thurs, Fidelity is our pick.

For everything else, we also suggest Fidelity over Wealthfront.

Fidelity vs Wealthfront Summary

Wealthfront has a unique method of investment management, but Fidelity refuses to be outdone.


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