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Betterment vs. Fidelity

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Are you an active or a passive investor, or do you even know for sure? Benzinga has pooled its resources to help you choose the best way to invest based on your preferred investing style.

Betterment vs. Fidelity: Overview

Commissions
$4.95
Commissions
0.25% annual fee for accounts 0.4% Premium Plan with additional features annual fee for accounts more than $100,000
Best For
  • Easy-to-navigate yet functional platform strikes the perfect balance between expert tools and comfort for beginners
  • Mobile trading app is fully-optimized and mirrors full functionality of the desktop platform
  • Wide range of education and research options make learning more about securities and the market easier and less time-consuming
Best For
  • Investors with defined financial goals
  • People who are new to investing
  • Passive investors who want to diversify their portfolio
  • Investors who want to invest heavily in ETFs
  • Investors looking for low-cost investment options
  • Investors looking to plan their retirement

Who’s Betterment for?

Betterment is suitable for passive investors. As a robo-advisor, Betterment requires nothing from its traders and does all of the work for you. So if you are a long-term investor, Betterment could be the right choice for you. It is a good fit for beginners and advanced investors in the United States.

Read Benzinga’s full Betterment Review

Who’s Fidelity for?

Fidelity is a broker provider for active traders, more likely to fit the needs of advanced traders rather than the beginners. It also has a portfolio advisory service, which makes it a good fit for people that want to invest in ready-to-go portfolios.

Read Benzinga’s full Fidelity Review

Betterment vs. Fidelity: Platform and Tools

Both brokerages offer a variety of tools and intuitive, easy-to-use platforms. Let’s see how they compare.

What Betterment Offers

Our Betterment review starts with information about the mobile application. Betterment’s app is available in both Google Play and the App Store (Android and iOS). It is a 100% automated trading platform that is 100% passive. The software will use all the money you put in to buy diversified portfolios without your involvement.

Betterment on desktop and mobile. Source: Betterment.com
Betterment on desktop and mobile. Source: Betterment.com

There are two types of accounts available at Betterment:

Digital Account
  • No minimum account size
  • Personalized financial service
  • Diversified investment portfolios
  • Automatic rebalancing
  • Tax-loss harvesting
Betterment Premium
  • Minimum account size of $100,000
  • All features of the digital account
  • Detailed advice about investments outside of Betterment
  • Certified financial planner (CFP) for guidance on life events

Tax-loss harvesting means that Betterment sells investments on loss and buys back similar investments. It takes advantage of recognizing a capital loss and cuts down on your exposure to capital gains, which saves your investments when it comes to tax time.

Since Betterment invests without your involvement, it doesn’t have many tools. It offers the basic features on an investment platform. You can check your balance, deposit and withdraw funds, change the allocation of your portfolio (stock – bonds) and review past account activity and goals.

What Fidelity Offers

Fidelity has an advanced trading platform, ActiveTrader Pro, which is one of Benzinga’s best online brokerage platforms. Fidelity also has a mobile solution for Android, iOS + Apple Watch and Kindle Fire.

ActiveTrader Pro
  • Fully customizable
  • Streaming market data
  • Advanced trading
  • Portfolio management tools
  • Intuitive trading tools, including strategy ideas, options trade builder and Trade Armor
Active Trader Pro on Fidelity. Source: Fidelity.com
Active Trader Pro on Fidelity. Source: Fidelity.com
Mobile Platform
  • Access to your personalized feed
  • Account management
  • Access to your watchlist
  • Timely alert notifications
  • No advanced charting
  • No research

There are two account types in Fidelity to cover your investment preferences.

  • The Fidelity account: Investment account
  • Independent retirement accounts (IRAs)

Bottom Line

The Fidelity platform is comprehensive and it keeps you involved. Betterment, though, is 100% passive, which makes its solution basic on the front end. But if you are a beginner investor, you might not find Fidelity suitable for your needs. In this case, Betterment will be the better choice for a beginning investor.

Betterment vs. Fidelity: Research Offerings

What Betterment Offers

Betterment’s website includes a rich database of informative articles. Its topics concern investment education and market analysis. Betterment also offers calculators to help you through your decision-making processes.

What Fidelity Offers

Fidelity is famous for its premium market research. Some of the research tools available are:

  • Streaming market data
  • Accuracy-weighted score
  • Powerful screener tools
  • Investing styles of independent firms
  • Investing analyst opinions
  • Market sector insights
  • Trending investment issues
  • Market commentary and report alerts
  • Custom watchlists
  • Newsfeed and survey for personalization
  • Asset allocations
  • Top best and top worst performers
  • Stock price quotes
  • ETF screener
  • Informative videos

These research features are all included in the ActiveTrader Pro trading platform.

Bottom Line

Fidelity’s specialty is its research tools. Its platform is wealthy on market research and insights. Comparatively, Betterment’s passive platform is a bit more basic.

Betterment vs. Fidelity: Commission and Fees

You’ll always see a large difference in commissions and fees when comparing a robo-advisor to a more traditional online brokerage. Here’s how Fidelity and Betterment compare.

Betterment’s Commissions and Fees

Betterment charges each of its two account types on a different basis.

  • Digital account: Charged an annual fee of 0.25% based on account size
  • Betterment account: Charged an annual fee of 0.4% based on account size

This fee is low for the industry as the digital account costs around $20 a month for a $100,000 account.

Fidelity’s fees

Fidelity offers pure trading, so it charges a commission based on the amount traded and the asset class:

Stocks

  • U.S. equity trades:  $4.95 per trade

Options

  • Online options trades: $4.95 per trade + $0.65 per contract
  • Buy to close orders of $0.65 to $0.11: $4.95 flat
  • Buy to close orders of $0.10 or less: $0

ETFs

  • Purchase 240 iShares ETFs online: $0
  • Purchase 11 Fidelity sector ETFs online: $0
  • Purchase 5 Fidelity active fixed income ETFs: $0
  • Purchase 10 Fidelity factor ETFs online: $0
  • All other ETFs: $4.95 per trade

Bonds and CDs

  • New Issues: $0
  • Secondary Issues: $1 per bond
  • U.S. Treasury: Auctions and secondary issues online: $0
  • U.S. Treasury: Auctions and secondary issues representative assisted: A flat fee of $19.95

Mutual funds

  • Fidelity funds: $0
  • No transaction fee (NTF) non-Fidelity funds: $0 on the purchase and $49.95 on redemption if held less than 60 days
  • Transaction fee non-Fidelity funds: $49.95 per purchase and $0 on redemption

Portfolio investments

  • 0.6% – 1.70% annual commission based on account size

Bottom Line

No doubt, Betterment’s fees are lower than Fidelity’s. But Fidelity offers active trading and their fees are lower than brokers with the same services.

Betterment vs. Fidelity: Security

Both brokerages take security seriously, especially in this age of mobile-first and online trading experiences. Let’s see how they stack up.

What Betterment Offers

Betterment is a fully regulated U.S. company and is a member of the Financial Industry Regulatory Authority (FINRA). Betterment insures its clients’ accounts up to $500,000 and cash deposits up to $250,000.

Betterment guarantees the return of 100% of your investments if the company fails to meet its obligations.

What Fidelity Offers

Fidelity is another company based in the United States which conforms to all U.S. investment laws. The Securities Investor Protection Corporation (SIPC) and the Federal Deposit Insurance Corporation (FDIC) covers Fidelity.

The company insures cash management accounts up to $1,250,000 and $500,000 on securities.

Bottom Line

Betterment and Fidelity take clients’ security very seriously. Both companies ensure fund compensation in case of an inability to meet financial obligations.

Betterment vs. Fidelity: Customer Support

What Betterment Offers

Betterment’s support is available during working hours from Monday to Friday and on a limited schedule during the weekend.

Premium accounts could get a more dedicated support on the phone. Chat support is accessible through the Betterment app.

What Fidelity Offers

Fidelity’s other specialty is its outstanding customer support. It is available 24/7 for its clients via live chat, email, and phone. Fidelity also has branches around the U.S.

Bottom Line

Fidelity’s customer support is more high-end and is highly accessible and available 24/7, compared to the Betterment’s limited support options.

Betterment vs. Fidelity: Tradable Asset Classes

What Betterment Offers

Although investing via Betterment is 100% passive, your funds still go through diversified portfolios. These portfolios include stock ETFs and bond ETFs.

The first thing Betterment will do with you is to give you a risk tolerance survey. Based on this survey, Betterment will determine your tradable asset allocation.

What Fidelity Offers

Fidelity supports a wide range of tradable assets:

  • Stocks
  • Bonds
  • Mutual funds
  • ETFs
  • Options

These assets could are available for active trading or in pre-built portfolios.

Bottom Line

Fidelity has a bigger set of tradable assets, but Betterment’s surveys claim that stock and bond ETFs are enough to manage a diversified portfolio.

Betterment vs. Fidelity: Ease of Use

What Betterment Offers

Betterment is a straightforward investing solution with high ease of use. There is not much to it, as it’s a 100% passive platform. The other tools, such as the asset allocation tool, are easily adjustable.

Betterment offers a free 15-minute call to help get you started, which is a really convenient service for new clients.

What Fidelity Offers

Fidelity is a comprehensive high-end trading solution with various advanced features. The platform is clean and so is its website.

Since its resources and tools are more advanced, the service is likely to be less intuitive for beginners.

Bottom Line

Betterment is definitely easier to use but involves 100% passive investment, so by nature, it will be less complicated in general.

Final Thoughts

Betterment and Fidelity have relatively different trading services yet both offer ready-to-go investing portfolios.

What experience do you prefer? Do you want to take part in the investment decision making process? Or you prefer professional automation? Are you looking for trading sophistication or not?

These are the main differences between the two brokers, so knowing your preferences will help you choose.

 

Pricing
0.25% annual fee
Account Minimum
$0
Get started securely through Betterment’s website
Commissions
0.25% annual fee for accounts 0.4% Premium Plan with additional features annual fee for accounts more than $100,000
Account Min
$0
1 Minute Review

Betterment is a smart robo-money manager that helps you save, invest and even spend your money. It has more than 500,000 registered customers and manages over $21 billion in assets. As a fiduciary, Betterment is committed to act in your best interest at all times. The investing platform lets you manage your money, guide your investments and plan your retirement at your convenience.  

Best For
  • Investors with defined financial goals
  • People who are new to investing
  • Passive investors who want to diversify their portfolio
  • Investors who want to invest heavily in ETFs
  • Investors looking for low-cost investment options
  • Investors looking to plan their retirement
Pros
  • Can open an account with a $0 minimum balance
  • Offers goal-based investing
  • Charges low annual management fees
  • Offers a wide range of stocks and ETFs
  • Provides access to advanced investing tools
  • Provides personalized financial advice plans
Cons
  • Charges a high fee for personalized financial advice comparatively
  • Not suitable for day traders and short-term investors
  • Does not offer any real estate stocks, commodities and foreign exchange
Best For
Stock Research
Overall Rating
Get started securely through Fidelity Investments’s website
Commissions
$4.95
Account Min
$0 for IRAs. Some accounts may require a minimum opening balance of $2,500
1 Minute Review

Fidelity is a comprehensive and responsive brokerage suitable for both new and experienced traders alike. With complete access to the full U.S. stock and options markets, a set of state-of-the-art education and research tools, as well as a wide fee-free fund selection, Fidelity is equally useful for the veteran swing traders to novices opening their first accounts. Mobile traders will be especially happy with Fidelity’s app, which mirrors full capabilities of the platform. Though there isn’t much to criticize about Fidelity, the broker does have a few areas where it can afford to improve. Margin rates are significantly higher than most other brokers, especially for traders borrowing less than $25,000. It also doesn’t offer any access to the futures markets. Despite these minor flaws, Fidelity remains a strong choice for most investors.

Best For
  • Easy-to-navigate yet functional platform strikes the perfect balance between expert tools and comfort for beginners
  • Mobile trading app is fully-optimized and mirrors full functionality of the desktop platform
  • Wide range of education and research options make learning more about securities and the market easier and less time-consuming
Pros
  • Complete range of both independent and managed services available at exceptionally affordable prices
  • Offers access to both domestic markets and 25 foreign markets, as well as a wide range of options contracts and over 10,000 mutual funds
  • Mobile app that is well-integrated and works just as well as the desktop platform
  • Wide selection of education tools and resources available free of charge
Cons
  • Margin rates higher than many other competing brokerages
  • No access to futures trading
  • High fees for buying a non-Fidelity mutual fund (with over 3,300 fee-free funds available)

Turn to Webull

0 Commissions and no deposit minimums. Everyone gets smart tools for smart investing. Webull supports full extended hours trading, which includes full pre-market (4:00 AM - 9:30 AM ET) and after hours (4:00 PM - 8:00 PM ET) sessions. Webull Financial LLC is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is also a member of the SIPC, which protects (up to $500,000, which includes a $250,000 limit for cash) against the loss of cash and securities held by a customer at a financially-troubled SIPC-member brokerage firm.