Is Fidelity Regulated? Is it safe? - TU Expert review
License is the most important document you have to consider when choosing a broker. Many traders, who would like to start working with Fidelity try to check whether it is regulated. Traders Union experts have already done that. In this article, you will learn whether Fidelity is regulated, what regulatory authorities supervise the broker and whether it is safe to work with the company in general.
Short summary about the broker Fidelity
Fidelity Investments is a large American financial services company. It was founded in 1946 by American businessman and lawyer Edward Crosby Johnson II. It provides services to traders in trading securities and commodity assets and allows investors to invest in mutual funds and investment funds, form portfolios for a variety of instruments, including bonds and annuities with fixed income. The company has received several awards: according to Barron's, Investors Business Daily, Kiplinger, and Stock Brokers. Fidelity Investments is recognized as the best online broker of 2020.
| 💰 Account currency: | USD |
|---|---|
| 🚀 Minimum deposit: | $1 |
| ⚖️ Leverage: | Up to 1:1 |
| 💱 Spread: | From USD 0 to 0.03 per $1000 turnover |
| 🔧 Instruments: | Shares, commodity assets, exchange-traded (ETF), mutual and investment funds, options, futures, bonds, annuities, fractional shares |
| 💹 Margin Call / Stop Out: | No |
Pros and cons of Fidelity
👍 Advantages of trading with Fidelity:
•availability of its own trading terminal for active trading, Active Trader Pro, with advanced analytics from experts and a wide range of technical analysis tools;
•no brokerage fee for consulting services with an account balance of up to $10,000, and only $3 if a larger deposit is made;
•there is the possibility of individual planning for investors, while the cost of the service is 0.5% of the size of the deposit for each month of use.
👎 Disadvantages of Fidelity:
•lack of localization;
•there are no active bonus programs; nor is there an opportunity to receive additional profit for attracting new customers;
•margin trading is possible if the account balance exceeds 250 thousand dollars;
•the demo account is limited in functionality and involves working only with investment portfolios.
Why is it important to work with a regulated broker?
License is a document that certifies that a broker operates legally and guarantees fulfillment of its obligations to the traders. A financial license is issued by a financial regulatory authority of a country (the National Bank) or a specialized authority (for example, Securities Commission, Futures Trading Commission, etc.). It is important to choose licensed brokers for the following reasons:
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A license guarantees that the broker operates in compliance with the rules of the financial regulator that issued the document.
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In order to obtain the license, a broker must comply with certain requirements, for example, the size of the authorized capital or personnel qualification. It is simply not lucrative for scammers to comply with such requirements.
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A broker’s license provides access to real markets, and you can be sure that the quotes are real and up-to-date.
The best option is to work with a broker that holds the license of the jurisdiction, where the trader resides. You can also choose a company with a financial license of another reliable jurisdiction, for example, the U.S. or the European Union.
Is Fidelity Regulated? Broker’s license
Security (Protection for Investors)
The regulator of Fidelity Investments is the US Securities Commission (CRD#: 7784/SEC#: 8-23292). Under the requirements of the state regulatory body, the broker publishes documents with a list of conditions for the services offered on its website in the public domain.
Fidelity Investments is also a member of SIPS, a non-profit organization created by the American Congress.The main task of SIPS is to ensure the return of invested funds to investors in the event of bankruptcy of a brokerage company.
👍 Advantages
- SIPS guarantees a refund in case of bankruptcy of the company
- All basic documentation describing trading conditions is in the public access
- Regulated by the laws of the United States
👎 Disadvantages
- The information on the broker's website is intended for US citizens only due to regulatory requirements
- Foreign investors face difficulties due to the need to contact regional offices
Brokerage fees
Broker’s regulation is the most important choice criterion. However, before you start working with the broker, it is also important to analyze its commissions and fees. TU analysts have studied the commissions and fees charged by Fidelity, which you can see below.
The size of commissions for this broker varies depending on the traded instrument and for all types of accounts, ranging from 0 to 0.03% from every $1000 of turnover, plus $0.65 for each option contract. When trading medium-term and long-term US government bonds, a brokerage fee of $19.95 to $250 is charged for the entire volume of the trade. For Treasury securities maturing within a year, the commission is a maximum of $50.
| Account type | Spread (minimum value) | Withdrawal commission |
| Traditional IRA | From $2 | No |
| Rollover IRA | From $2 | No |
| ROTH IRA | From $2 | No |
| Brokerage Account | From $2 | No |
| Brokerage and fund management | From $2 | No |
| Account «529» | From $2 | No |
| Fidelity Go | From $2 | No |
| Fidelity personalized management and consulting | From $2 | No |
Brokers that are similar to Fidelity
Many brokers operate legally, obtaining relevant licenses and permissions. However, when choosing a broker, it is important to compare their trading conditions. TU experts have prepared a comparative analysis of Fidelity conditions with its closest competitors.
Comparison of Fidelity with other Brokers
| Fidelity | RoboForex | Pocket Option | Exness | FBS | Libertex | |
|---|---|---|---|---|---|---|
Trading platform |
Active Trader Pro |
MT4, MT5, R MobileTrader, R StocksTrader, R WebTrader |
Pocket Option, MT5, MT4 |
Exness Trade App (mobile), Exness Terminal (web), MetaTrader5, MetaTrader4 |
MT4, MobileTrading |
Libertex, MT5, MT4 |
Min deposit |
$1 |
$10 |
$5 |
$10 |
$1 |
$100 |
Leverage |
1:1 |
From 1:1 |
From 1:1 |
From 1:1 |
From 1:1 |
From 1:1 |
Trust management |
No |
No |
No |
No |
No |
No |
Accrual of % on the balance |
No |
No |
No |
No |
No |
No |
Spread |
From 0 points |
From 0 points |
From 1.2 point |
From 1 point |
From 0.2 points |
From 0.1 points |
Level of margin call / stop out |
No |
No |
No |
No |
No |
No |
Execution of orders |
Market Execution |
Market Execution, Instant Execution |
Market Execution |
Market Execution, Instant Execution |
Market Execution |
Market Execution, Instant Execution |
No deposit bonus |
No |
No |
No |
No |
$5 |
No |
Cent accounts |
No |
Yes |
No |
No |
Yes |
No |
Fidelity Investments offers favorable conditions for investors and traders of all skill levels but is more focused on large investors.
The minimum deposit in RoboForex is $10. Leverage up to 1:2000. Traders choose RoboForex for reliability, favorable trading conditions, minimum spreads, and commission fees. The company is recommended for beginner traders and experienced investors.
Pocket Option offers a wide range of trading instruments and copy trading services. It constantly improves its service quality and expands the list of assets and trading platforms. The broker is suitable even for novice traders without significant capital due to the low initial deposit. Experienced traders who work with CFDs and binary options can also use Pocket Option’s services.
Exness broker is a trusted broker partner that is compliant with all relevant terms. Exness complies with all payment obligations and pays money earned.
FBS is a broker for those who appreciate a variety of trading instruments and prompt support. The company is suitable for both beginners and experienced traders working on PCs and smartphones.
Libertex is a reputable broker. It would be worthwhile to look at the platform as a technical solution. It will appeal to those who can not imagine their life without gadgets and are eager to keep up with the time.
Conclusions
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- Is NAGA Regulated? Is it safe?
- Is EGM Securities Regulated? Is it safe?
- Is Fortrade Regulated? Is it safe?
- Is Questrade Regulated? Is it safe?
- Is Self Bank Regulated? Is it safe?
- Is Tradeview Regulated? Is it safe?
- Is Purple Trading Regulated? Is it safe?
- Is TigerWit Regulated? Is it safe?
- Is Vantage FX Regulated? Is it safe?
- Is Tickmill Regulated? Is it safe?
- Is Capital.com Regulated? Is it safe?
- Is CMTrading Regulated? Is it safe?
- Is JustForex Regulated? Is it safe?
- Is Axiory Regulated? Is it safe?
- Is 1Market Regulated? Is it safe?
- Is Orbex Regulated? Is it safe?
- Is TriumphFX Regulated? Is it safe?
- Is AMP Global Regulated? Is it safe?
- Is GAIN Capital Regulated? Is it safe?
- Is Gerchik&Co Regulated? Is it safe?
- Is Investmarkets Regulated? Is it safe?
- Is LegacyFX Regulated? Is it safe?
- Is SmartFX Regulated? Is it safe?
FAQ
How difficult is it to obtain a brokerage license?
The procedure for obtaining a license differs depending on the jurisdiction, but it is very difficult and expensive to get the document in a reliable jurisdiction. This is why only reliable brokers obtain licenses.
Why is it not recommended to work with offshore brokers?
Offshore brokers have to meet minimum requirements for obtaining a license and reporting, which is why often scammers get such licenses.
Can an offshore broker be reliable?
Yes, although there are not many of such brokers. There are brokers with a good reputation, but with an offshore license. You still need to be very cautious when working with such companies.
How do I check a broker’s reputation?
In order to check a broker’s reputation, you need to read user reviews. However, it is recommended to only use independent websites for that.
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.