Fidelity: Low costs and a prestigious name

Fidelity is a big-name brand and champion of long-term investing: their products and services will, therefore, appeal to those who are happy to take a long-term approach and who want the sense of security and high level of customer service that can come from working with a well-established, household name.

Fidelity’s ready-made funds are a good option for those who don’t have the time to research individual investment opportunities or who are new to investing and want some help narrowing down their options.

It’ll also appeal to those who want a low-cost option. Although it’s possible to invest more cheaply through one of the newer robo-advice brands where algorithms make investment decisions for you, you won’t get the range of investment options and additional support you’ll get with Fidelity. That makes it ideal for those who are still looking for some added service from a traditional provider.

Fidelity also provides fairly priced options for those who want a higher service level and are willing to pay for the peace of mind and perks that come with personalised wealth management and financial advice. Ideal for those wanting a more human – rather than fully digital – experience.

Fidelity won’t be right for you if you’re looking for a vast choice of stocks from across the world to invest in. And it won’t be for you if you want to trade equities regularly as the trading fees for stocks soon add up.

Accounts

Fidelity offers a number of different account types through which you can invest:

• General investment account
• ISA
• Junior ISA
• Self-invested personal pension (SIPP)
• Junior SIPP

That's more than most providers as you can see:

Assets

At Fidelity, you’ll gain access to over 4,000 investment opportunities in the form of mutual funds, ETFs, and around 2,000 individual stocks, which you can choose from to create your own portfolio.

Where stocks are concerned, it’s not the largest selection on the UK market by a long stretch – falling far short of the range offered by interactive investor and AJ Bell, for example. Stock choices are limited to well-known and popular stocks from US, UK and European markets. There is no access to exchanges from the rest of the world, and no ability to buy fractional shares.

Where Fidelity excels, however, is in its choice of funds. Available funds span the entire market range and include Fidelity’s own products as well as those from 100+ other providers. The choice of funds is as wide as you’ll find anywhere in the UK market.

If you want to pick your own shares, ETFs and funds, there’s an ‘investment finder’ tool to help you filter, sort and compare options.

Ready-made funds

Fidelity’s ready-made funds are a good option if you would prefer to be invested in a fund and want some help narrowing down your options from the thousands on offer. Make you selection from:

• Navigator: This pathway allows you to choose a ready-made portfolio that’s aligned to your risk profile and your growth or income goals.
• Select 50: A choice of 50 funds selected by Fidelity’s experts and updated twice a year. Sort funds by range of options according to your investment preferences.

ESG funds

Fidelity offers a choice of ESG funds for investors who hold strong values regarding the environmental, social and governance performance of companies.

While Fidelity won't offer you a personal recommendation on which might be the best ESG fund choice for you without paying for the personal financial advice service, there is a helpful tool that helps with identifying which of the sustainable funds, ETFs and investment trusts offered on the platform best reflect your values.

If you are invested in a Fidelity pension, you’ll be entitled to have your say on ESG matters through Fidelity’s partnership with fintech company, Tumelo. ‘Fidelity Illuminate’ is a sustainable investing tool that gives you transparency about where your pension savings are invested, and a voice on environmental, social and governance (ESG) issues at the AGMs of the companies you invest in – although, this is just an opinion, communicated through your fund manager, not a vote.

Stocks and Shares ISA

Fidelity’s award-winning Stocks and Shares ISA is a tax-efficient way for you to save. You can put aside up to £20,000 in the 2024/25 tax year (plus an additional £5k in the new Brit ISA announced in the March 2023 budget), and pay no income or capital gains tax on your investments. You can either invest a lump sum or set up a regular savings plan from as little as £25.

With a Fidelity Stocks and Shares ISA, you simply pick your investments in the same way you would with a general investment account – either by creating your own portfolio of hand-chosen investments from the thousands of funds and shares on offer or opting for a ready-made portfolio aligned to your risk profile and goals.

Fidelity is currently offering £200 – £2,000 when you apply to transfer other ISAs to them. (Exclusions and T&Cs apply. Check the website for details).

Discover the best stocks and shares ISAs in the UK market.

Junior ISA

Fidelity offers a JISA but, similar to Vanguard, does not accept transfers from Child Trust Funds. That’s a shame and will rule this provider out for many potential JISA customers. If you’re looking to transfer a CTF to a JISA, then I’d suggest looking at interactive investor (ii), Hargreaves Lansdown, or AJ Bell instead.

SIPP

Fidelity has been awarded ‘Which? Recommended Provider’ status for three years running – making them a solid option if you’re looking to set up or transfer a SIPP and start taking advantage of those 20% government contributions.

There’s a managed SIPP option. By using Fidelity’s Navigator tool, you can be matched a suitable ready-made portfolio, actively managed by a fund manager on your behalf.

If you choose the DIY option for this SIPP, you will need to choose what to invest in, although Fidelity does give the opportunity to access financial advice if you want it and, if you invest over £250k, a reduced service fee and a Relationship Manager.

You’ll need a lump sum of at least £800 to get started or, if you don’t want to put that much into a lump sum deposit, you can opt for the regular savings service where you can make monthly payments of at least £20.

A Fidelity SIPP gives you access to a wide range of funds, investment trusts and exchange-traded funds (ETFs). But bear in mind that on stocks, your choices are limited to UK stocks only. Only those investing in a general investment account, ISA or Junior ISA can access US and European stocks with Fidelity.

Joint accounts

Fidelity offers joint accounts for general investment accounts. You cannot hold an ISA in joint names (this is the case across all providers).

Corporate accounts

Fidelity offers corporate accounts. That’s a useful option if you wish to take advantage of more favourable capital gains tax rates, or offset losses against personal income, by investing through a limited company.

Fidelity does not offer a Lifetime ISA or Cash ISA.

Financial Advice Service

Fidelity offers a personalised financial advice service, designed for people looking to invest a minimum of £100,000 (which can include pensions), for the long term. Financial advice can help with a range of financial planning needs such as planning for retirement, saving and investing, later life care needs, or protecting and passing on wealth. Note, however, that Fidelity’s financial advisers can only offer recommendations for Fidelity products and services and/or investment solutions from a defined range of Fidelity investment options. This is what’s known as ‘Restricted advice’. It’s not the same as independent financial advice.

During your initial meeting with an adviser, they’ll help you decide if you need advice for an immediate financial need or ongoing advice. With ongoing financial advice, your Adviser will meet with you annually (or when required by you) to re-visit your objectives and circumstances and review your investment strategy if needed. Ongoing advice customers also automatically qualify for Wealth Management benefits.

Fees are 1% for initial advice and 0.5% for annual reviews and ongoing advice – both of which hover around the industry average.

Wealth Management Service

Fidelity’s wealth management service is designed for our customers with £250,000+ invested, and for those signed up to Fidelity’s ongoing advice service (see above). When you qualify as a Wealth Management customer you’ll get access to exclusive benefits, extra investment support and help with financial planning.

Fidelity clients are given access to their full shareholder rights.

Voting rights

You’ll be entitled to submit a proxy vote at Annual General Meetings/Extraordinary General Meetings or alternatively can elect to attend in person.

To see and respond to corporate actions, click through to the ‘Corporate actions’ page within your portal, and select ‘View details' next to the action you want to respond to. You’ll be presented with the options available. Once you’ve selected your chosen option, select ‘Submit' and an on-screen message will confirm your choice.

If you change your mind you can edit your choice up until the closing date shown onscreen.

Dividends

Should a company decide to pay a dividend, you can receive the payment either:

• Into your bank account
• Paid out as cash within your Fidelity account
• Reinvested within the same stock – a charge of £1.50 is applicable

Fidelity states that they will reinvest or pay out any dividends owing to you “as soon as practicable” after they receive them – which leaves them a bit of wriggle room and makes me worry it won't be paid quickly!

Web platform

The web platform is simple and clean. It’s not a revolutionary design, but it works.

I’m not a fan of the search function if you want to buy investments. It feels like searching using an Excel spreadsheet rather than the visually appealing, easy-to-scroll menus you get with newer, mobile-first investment platforms. There’s no grouping of stocks, ETFs or funds by sector, region, ‘most-traded’ or ‘highest performing’ as you sometimes get with other providers. It works if you just want to head straight to the fund/stock you want and trade, but not if you’re looking for inspiration.

The breakdown of fees for stock trades comes in the form of a downloadable document too, which seems like a very old-fashioned way to communicate that information, although I appreciated how detailed it was and easy to understand.

Mobile platform

The mobile app is relatively straightforward to use and has a clean, clear design. There are clear pathways for navigating your way to different sections and features. But, you will be very limited in what you can do on the app. It’s for transactions and monitoring your portfolio only. There’s some limited information giving an overview of the UK, European, US and Asian markets, but that’s it. So you’ll need to head to the web platform to do any research.

Again, I’d have the same complaint about selecting assets to buy – and it’s even more difficult on mobile as it’s just a smaller-scale version of the spreadsheet format. It’s not a joyful user experience.

All-in-all, not a great app, but at least you can check your portfolio on the go which is better than no-app Vanguard.

Fidelity’s fees are pleasingly straightforward and easy to understand. You’ll also find a fee calculator online to ensure you have a clear view of what you’ll pay, which is a feature I always appreciate.

Service fees

Whether you’re invested in a general investment account, SIPP or ISA, Fidelity uses the same, straightforward pricing structure: one annual service fee, payable monthly, based on the total value of your investments.

Junior accounts and cash accounts do not incur service fees.

The service fee pays for everything Fidelity provides and is currently:

• 0.35% – accounts holding £25,000 – £250,000
• 0.35% – accounts holding less than £25,000 but where a regular savings plan is set up (or £7.50 per month without regular savings)
• 0.20% – accounts holding £250,000 – £1 million
• 0.00% – accounts holding more than £1 million, after the first million

With the exception of £1m+ investments, the same fee is charged across all of your investments. So, if you hold £300,000 – the fee would be 0.20% across the full amount. Doing it this way helps in simplifying calculations when comparing costs, and means you will benefit from lower rates across your whole portfolio as soon as you hit the threshold. That will make Fidelity cheaper than a rival offering the same rates but only on the proportions of your portfolio above the threshold.

One thing I really like about Fidelity – in addition to those low and simple fees – is that it offers the chance to access its 0.35% fee rate, even if you don’t yet have £25k in assets in your account, by setting up a regular savings plan. And as Fidelity sets a low minimum for these regular deposits – £25 – it’s accessible to most people. It’s what I did when setting up my account. I might only be making small contributions but it’s a pot that I can build up over time for one, low, percentage-based fee, which suits my small portfolio.

Tip: For those with smaller portfolios, variable, percentage fees such as these can work out cheaper than platforms with fixed fees. If you have a larger portfolio, fixed fees can work out cheaper.

The low fees are a major plus of using Fidelity, but it may not be the cheapest platform overall. You can only invest in Vanguard’s own funds through the Vanguard platform, as opposed to the full range of funds you get with Fidelity, but you’ll get annual platform fees as low as 0.15%. It is, therefore, possible to get a cheaper deal, but you lose choice.

Dealing fees

For standard buys and sells, Fidelity charges £7.50 for each deal placed online. For any regular savings plans and dividend re-investments, Fidelity reduces the fee to £1.50 per trade. £7.50 per trade is a bit of a kick for smaller-scale investors so avoid Fidelity if you’re wanting to trade regularly. You’re better off looking at a platform like Freetrade, Trading 212 or eToro if you want to trade regularly and keep costs to a bare minimum.

If you want to avoid dealing fees altogether at Fidelity – as I did – you can invest in a fund. Fidelity does not charge for dealing on funds (although there’s sometimes a buy/sell charge levied by the fund manager.) It made much more sense for me to invest this way as I chose to set up a Direct Debit to get some regular savings into the pot, and I didn’t want to be charged dealing fees each time I added to my investment, so avoided buying stocks at all and went for the high performing Allocator World fund.

FX fees

When you buy or sell an international share, you’ll also pay a foreign exchange (FX) charge. Fidelity’s rates are high at the top end, but more reasonable and competitive as the value of your investments increase:

• 1% for transactions under $50k
• 0.5% for transactions between $50k – £150k
• 0.25% for transactions over $150k

This is how those fees compare with other providers:

Funds charges

In addition to the service fee, there may also be charges set by the company managing your funds. These are standard whatever provider you use. Rates will vary but start from 0.05%.

Buying and selling some funds may also incur:

• A bid-offer spread, which is effectively a charge applied when you buy or sell.
• A performance fee.
• A fund manager buy or sell charge.
• If you want to know the specifics of the fund you’re interested in, check the relevant investment factsheet.

Junior SIPPs

Fidelity does not charge a service fee on Junior SIPP accounts.

Junior ISA fees

Fidelity does not charge a service fee on Junior ISA accounts.

Withdrawal fees

No charge.

Deposit fees

No charge.

Minimum deposit

You can start investing with Fidelity from as little as £25.

Interest paid on cash

Fidelity pays interest on cash accounts. Rates paid are currently 3.45% on ISAs, cash management accounts, and the general investment account, and 3.65% on SIPPs. That’s significantly higher than Vanguard’s current rate of 2.60%, but is a long way from the highest amount you could get, as this table shows:

All figures were correct at the time of publishing. While we attempt to update figures as soon as we become aware of changes, the most accurate way to obtain the latest data is to check with the provider directly.

Advice fees

Every Fidelity client is eligible for a free, no-obligation discussion about their advice needs.

Should you decide to engage Fidelity’s advisors after this meeting, fees are 1% of the amount being advised on, subject to a minimum fee of £4,000 capped at a maximum fee of £10,000. Ongoing advice through Fidelity’s annual financial review service is charged at 0.5% of assets under management. These figures are fair when compared with the industry average.

Please note: all published fees are correct at time of publishing. However, we suggest checking Fidelity’s website for the most up-to-date figures.

Fidelity offers a range of online tools to help you decide how to invest. Personally, I appreciated Fidelity’s no-fuss, jargon-free way of approaching investment choices. It feels very supportive and designed to nurture those who may feel nervous about making big decisions with life-changing sums of money, while not wasting the time of those who just want to jump into picking stocks.

There are separate paths for those who identify themself as needing “as much help as possible; those who would “like a little bit of help”; and those who say “I’d like to do my own research”.

For those who want some – or lots – of help, Fidelity offers ‘Navigator’ – a tool to help users pick a diversified fund in a few easy steps, based on answers to questions about your feelings around risk and the kind of investment approach you’d like to take.

Alternatively, you can choose from a list of top-rated investments hand-picked by investment experts through the ‘Select 50’.

If you’re investing in an ISA, Fidelity also offers ‘Easy Invest’ – a readymade low-cost fund that gets you invested in some of the world’s biggest companies in a couple of clicks.

If you want to come to your own decisions based on your own research, Fidelity provides an investment finder tool, which enables investors to access prices and market data, charts, comparison tools and stock market news and insights. Once you’ve screened for the stocks you want, there are company reports, press releases, balance sheets, cash flow and income data sets, and customisable charts – enough for most average investors looking to undertake reasonable due diligence. But, as I’ve commented before, there’s little by way of inspiration in those first stages and you’ll need to have some idea what you’re looking for to use the investment finder tool.

When selecting a provider for your investments, it is very important to first ensure they meet certain minimum safety standards. We judge Fidelity to meet the threshold for a ‘safe’ provider because:

• Fidelity is an independent global investment company that was established over 45 years ago and is still owned by the founding family, senior management, and staff.
• Fidelity is authorised and regulated by the Financial Conduct Authority (FCA) in the UK.
• In accordance with Financial Conduct Authority rules, Fidelity always holds a significant amount of liquid capital. In the unlikely event this capital is required, it will help with the winding down of the business and make it easier to return your money and assets in an orderly way.
• Fidelity is covered by the Financial Services Compensation Scheme (FSCS). This means you may be entitled to compensation of up to £85,000 in the unlikely event that the company is unable to meet its financial obligations to you.

Account security

• Fidelity utilises multi-factor authentication to keep your account secure.
• Biometric login can be toggled on and off easily in the mobile app.

Remember that investing involves risk. The value of your investment can go up as well as down, and you could get back less than you put in.

Most fund deals take place once per day. Shares, however, can be traded any time of day as long as the markets are open – there isn’t just one daily pricing point. With a market order, your deal will go through straightaway at the price you have been quoted. If you want to place a deal when markets are closed, you can do so; it will go through as soon as the market re-opens.

Order types

When placing an order to buy or sell, you’ll be asked to choose from:

• Market order: Buy or sell shares at the quoted price, within 15 seconds (also known as an ‘At best order’).
• Limit order: You tell Fidelity a specific price you’re willing to buy or sell per share which, if reached, will trigger your order to be placed.

Note though, that Fidelity doesn’t facilitate limit orders on non-UK stocks. So you won’t be able to use that particular risk management tool if buying US stocks, for example. I’m not sure what the reason is for this, but it’s unusual – and frustrating.

Fidelity’s education offering is pretty rudimentary although the fact Fidelity also offers personalised financial advice perhaps explains why they don’t offer much for free online.

There are some useful guides to ‘Investing for beginners’, ‘Principles for good investing’, life events such as divorce, retirement and receiving an inheritance, and ‘Tax Allowances’. There’s also an ‘Ask the experts’ section where, once a month, Fidelity’s team will answer a question posed by a website visitor.

And, if you can get there, there’s the chance to attend live, in-person, free seminars, held at Fidelity’s London Investor Centre. It’s something few other providers offer.

If you want support with long-term investment decisions, there are also some helpful planning calculators.

You can speak to a human at Fidelity via

• Secure messages from within your account if you are a client.
• Phone – lines are open Monday to Friday, 8:30 am – 5:30 pm for wealth management and personal investment enquiries.
• Fidelity’s in-person Investor Centre in London.

Or you can use the Help Centre where you can type and search for answers to your questions. It wasn’t the best Help Centre I’ve used. Quite a few of my (not unreasonable questions) turned up no results and I was forced to join the queue to speak to a representative instead. A chatbot and better search facility would be an improvement.

When I phoned the customer service helpline to make an enquiry, the call was answered immediately and the agent was very helpful. It feels more like a ‘white glove’ service than many other, newer providers.

All customer service teams at Fidelity are based in the UK and Ireland.

Face-to-face

A nice perk you might be able to take advantage of if you live in or around London, is Fidelity’s ‘Investor Centre’, situated on Cannon Street, London (near St. Paul’s Cathedral). The centre is open to anyone looking for face-to-face help with their investments, Monday to Friday, 9 am to 5 pm. You can also make an appointment to meet with your Relationship Manager or Adviser face-to-face at the Investor Centre if you have chosen to use Fidelity’s financial advice service.

Fidelity has a “Great” score on Trustpilot – 4.1 at the time of writing – based on over 4,500 reviews. Recent reviews are overwhelmingly positive about how helpful call centre staff are when it comes to answering questions and resolving issues.

Account opening

The first stage of opening an account with Fidelity is very straightforward. The online application process took me around 10 minutes to complete. However, it was then a further two weeks before I had my application processed and was granted access to the full platform. There was no warning that it could take this long and my attempts to get into my account came up against quite a few issues that niggled: one-time passcodes that didn’t work; asking me to call “the number below” and then not providing a number. It was a headache which could have been removed if Fidelity had communicated to let me know what was happening and how long it was normal to wait. Even with better communication, however, making clients wait two weeks for a letter in the post to confirm an account opening seems pretty archaic and unnecessary in the digital age.

You’ll need your National Insurance number and bank account details or details of the account you’re transferring funds from in order to either make a one-off payment of funds, or set up a monthly Direct Debit.

Once Fidelity eventually processed my application, I was able to move onto the second stage of the process; selecting the funds or shares I wanted to invest in.

Just a note: If you want to invest in US shares, you'll need to complete a W-8BEN form first for US regulatory reasons. That’s standard on all platforms outside of the US providing access to US shares.

Watch this video to view Fidelity’s account opening processes:

*Video is in Loom

Closing your account

Fidelity does not charge fees to transfer your investments to a new provider. Some investments may incur a fund manager sell charge however.

If you have cash in your Fidelity account, you can withdraw the money online to a personal bank account.

Transferring accounts

Fidelity offers to cover any exit fees your current provider may charge when transferring into Fidelity, up to £500 per person (T&Cs apply).

Transfers of ISAs, JISAs and general investment accounts typically take about 8 weeks with Fidelity, but as with any platform, it depends on the complexity of the transfer and the provider you’re coming from as they are generally the cause of hold-ups.

You can decide whether you want to re-register your investments or transfer your accounts in as cash. Remember – if your account is transferred in as cash, you’ll be out of the market while your money is being transferred and you could miss out on growth and income if the market rises during this time.

To transfer a pension, takes roughly 10 – 20 working days if the process can be done electronically. Manual transfers – which some pension providers may insist on – can take two to three months or longer unfortunately.

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