A perfect 10. That's how many years in a row Fidelity brokerage has been named a Best Online Broker since Investor's Business Daily's annual survey began a decade ago. And the 2022 IBD Best Online Brokers ranking finds Fidelity regaining the No. 1 spot overall.
Fidelity did not have far to climb this year. Last year, Fidelity brokerage scored the No. 2 Overall ranking.
And this is Fidelity brokerage's sixth time in the No. 1 spot since the debut of IBD's annual Best Online Brokers ranking.
The rankings are derived from the results of an annual survey conducted by IBD and polling partner TechnoMetrica Market Intelligence. Investors were asked to rate their primary broker on 15 characteristics that investors themselves deemed most important.
Fidelity wrestled back control of the No. 1 Overall ranking on the strength of traits such as Trade Execution, Website Security, Site Performance, Research Tools, Investment Research, Availability of Accounts and Educational Resources.
Fidelity Brokerage: No. 1 In Seven Categories
In fact, investors ranked Fidelity brokerage No. 1 in each of those seven attributes. That's up from taking the top slot in just three categories last year: Research Tools, Investment Research and Portfolio Analysts & Reports.
Once again, competition was ferocious. It included new, smaller players like Robinhood, whose customer base skews toward millennials. Fidelity's rivals range up to older, bigger firms like Schwab, whose financial metrics are comparable to Fidelity.
Overall, Fidelity held $11.1 trillion in assets under administration (AUA) as of Sept. 30. That included $3.5 trillion run through Fidelity's brokerage.
The $3.5 trillion is about 37 times the $95 billion in assets under custody at Robinhood.
Schwab and TD Ameritrade combined hold $8.1 trillion in 33.2 million accounts.
How Customers Feel About Fidelity
David McMullen, a 72-year-old who has been with Fidelity about 15 years, reflects what many customers like about the big Boston-based online brokerage. "Fidelity gave me a place for my money to grow," said the Houston-area married father of three, who is a retired tool industry executive.
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He also has accounts with Thinkorswim and Trade Station. But it is with Fidelity that McMullen feels most comfortable. "In my will, I've left detailed instructions for converting everything to Fidelity when I'm gone," he said.
Best Online Brokers: Customer Criticism
Still, don't expect executives like Scott Ignall, head of Fidelity's retail brokerage business, to rest on today's laurels. They're planning more improvements.
Fidelity Account Features |
|---|
| Minimum to open an account: $0 |
| Number of accounts: 30.9 million |
| Shorting restrictions: Must consent to rules for margin trading and short sales |
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Margin restrictions: Most equity securities have base requirements of 30% (long side), 35% (short side) |
| Shorting leveraged ETFs initial margin: 35% to 90% |
| Special features: Fractional share trading allowed; trade must have value of at least $1 |
| Website: Fidelity.com |
Ignall says 2022 changes will fall into three buckets. First, technology that affects everything from site security to a landing page's ability to remember what you like to do. Customer education is second. Third is customer engagement.
That last goal involves expanding Fidelity's presence on social media.
Fidelity brokerage customers like many things about Fidelity. But some aren't shy about describing improvements they hope for.
Leslie Deemers, a retired systems analyst who lives near Syracuse, N.Y., has been a Fidelity customer for about 35 years. "Overall, I like Fidelity a lot," he said. "But I use The Trade Desk to trade options. It seems more geared for options than Fidelity. There are more ways to tweak and analyze things, there's more analysis, before executing an options trade there."
Brian Corrigan, a retired New Jersey county parks administrator, has been a Fidelity customer since 2011. "Overall, Fidelity is good," he said. "But I might be better served by more of a trader's platform." For instance? "I bought Pulte (Group) about an hour ago. Fidelity still isn't showing me exactly what I paid for my shares yet. They just don't move fast enough."
Fidelity sees strengths in how it serves its vast customer base. Ignall said, "As a private company, we play the long game. We don't (cut corners in the short run). We don't worry about earnings calls with analysts. We don't make short-term decisions on the backs of customers. The best proof is that clients appreciate the value we offer and our transparency."
Improvements For Fidelity Brokerage
Fidelity brokerage's goal is to enable customers to do what they want, when they want. The challenge is: How do you put everything on a screen — potentially a smartphone screen, which of course is much smaller than a desktop computer screen — that satisfies every customer?
Technology that anticipates what each user wants is part of the answer.
"Continued focus on mobile capabilities and enhancements around design capability" is a priority, Ignall said. "We want to serve the right content when they need it. We want to be respectful of each customer's time."
One planned step: decluttering its landing site. "We found that clients want a simpler interface upfront," Ignall said.
As investors dig deeper, they'll see more open space. Also, icons will replace more text.
Best Online Brokers Battle For Future Customers
Fidelity is also battling for future customers. It aims to make itself familiar to users of social media sites like Reddit and TikTok.
Fidelity contrasts its depth with what it sees as the shallowness of brokerages that present investing as a video game experience. Eventually, those young investors will get older. They'll want more from a broker. When they do, Fidelity wants them to remember its name.
"We're not trying to attract 12-year-olds," Ignall said. But "if we can engage with folks in the 18- to 24-year-old range, that's where they're resident. We want to make sure those folks understand the amazing capabilities that Fidelity has to offer. And we want to make sure they understand the value of investing, the importance of long-term building of wealth."
More Mobile Trading At Fidelity Brokerage
That long game is working. Fidelity brokerage had 30.9 million retail accounts as of Sept. 30. That was up 22.9% from Q3 2020.
And 2.97 million of those accounts were held by investors ages 18 to 35. That was up 99% in a year.
Also, many Fidelity changes are dictated by the growing number of customers accessing Fidelity brokerage by mobile devices and their small screens. Now, 61% reach the brokerage via mobile devices. That share crossed 50% in June 2019.
The crux of Fidelity brokerage's appeal? Ignall says, "We focus on putting customers first."
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