Fidelity vs. Charles Schwab: Choose Your Brokerage

Looking to open a new brokerage account? You’ll have no shortage of options, but choosing a new broker isn’t as simple as picking out the best cuts of meat at the grocery store. You’ll need to consider how you’ll invest and what tools you’ll need to do it successfully. When it comes to providing tools and research to investors, few investment banks have more broad appeal than Fidelity Investments and Charles Schwab. Let’s break down which firm has the most to offer in terms of investment products and other services.

Fidelity vs. Schwab

Looking to open a new brokerage account? You’ll have no shortage of options, but choosing a new broker isn’t as simple as picking out the best cuts of meat at the grocery store. You’ll need to consider how you’ll invest and what tools you’ll need to do it successfully. When it comes to providing tools and research to investors, few investment banks have more broad appeal than Fidelity Investments and Charles Schwab. Let’s break down which firm has the most to offer in terms of investment products and other services.

Fidelity

Fidelity Investments is a top online broker with $0 trades and a user-friendly platform. It offers stocks, ETFs, and bonds for managing your financial portfolio. Fidelity has won industry awards for excellent customer service and innovative solutions. While it has fewer no-load mutual funds, it still provides extensive brokerage accounts and commission-free trading. Fidelity is a great choice for maximizing investment strategies without high fees, known for client satisfaction and comprehensive tools.

Charles Schwab

Charles Schwab offers a wide range of investment options with over 8,000 no-transaction-fee mutual funds. They provide robust research tools from Morningstar and S&P for informed decision-making. Schwab's flexibility includes no-minimum investment accounts and commission-free trading. You can choose between hands-on or automated guidance with robo-advisor services and personalized financial advisory options. They also offer strong customer support through various channels for any queries or concerns. Schwab focuses on client satisfaction, making it a top choice for investors seeking a reliable and comprehensive investment experience.

Fidelity vs. Charles Schwab: Similarities

Fidelity and Charles Schwab are leading financial institutions known for their diverse services for investors. Both companies offer user-friendly platforms, research tools, and focus on customer service. They are competitors in the online brokerage industry, with unique features and pricing. Fidelity and Charles Schwab both offer commission-free trades on stocks and ETFs, along with educational resources. They prioritize ease of use and accessibility for investors of all levels. Novice investors and seasoned traders find their services appealing for building portfolios and comprehensive investment solutions. Investors should consider the similarities between Fidelity and Charles Schwab when making a choice.

Low-Cost Index ETFs

Active trading might carry more of an exciting aura, but the bread and butter of most sound investing is efficient index funds. Affordably owning many companies can provide steady returns without taking on too much risk. Schwab and Fidelity both provide ETFs with some of the lowest expense ratios in the industry, as low as 0.03% on broad market index funds and 0.08% on sector or thematic ETFs.

Commission-Free Trading for Stocks and ETFs 

Schwab and Fidelity have both gotten rid of commissions on stock and ETF trades, starting a chain that led to basically all other brokers dropping their stock commissions to zero. Certain trading fees do still exist outside the equity area, but you won’t pay a penny in trade commissions to trade listed stocks and ETFs.

Comprehensive Asset and Wealth Management Services

Both investment banks have broad appeal in their services. If you’re looking for sophisticated management of large accounts over $1 million, Schwab has its Wealth Advisory Services and Fidelity has Private Wealth Management. For smaller accounts, Schwab’s Intelligent Portfolios and Fidelity’s Personalized Planning and Advice provide a hybrid of robo and human advisor services. Investors across the income and asset spectrum can find valuable investment products and wealth management services at either firm.

Diverse Account Types 

If you want to manage your own money and investments, you’ll find plenty of DIY investment options. Both companies have brokerage and trading accounts, retirement accounts like IRAs (including Roth IRAs), education savings accounts like 529 plans and cash management accounts for banking needs. Business owners can also manage their investments through business-specific accounts or open 401(k) retirement plans for their employees.

Robust Active Trading Platform

If you’re looking to actively trade, both investment banks have impressive desktop trading applications that rival the best in the business. For Fidelity, it’s Active Trader Pro, with real-time news updates, charting tools and backtesting capability. StreetSmart Edge offers similarly powerful analytics and charting tools for Schwab clients, along with streaming data and financial TV.

Comparable Pricing Structure for Options Trading

Stocks and ETFs might trade commission-free, but fees are still attached to derivatives like options. Schwab and Fidelity both charge 65 cents per options contract, which is higher than other brokerage firms geared toward active traders like Interactive Brokers, Robinhood or Webull.

Extensive News and Research Resources

One area that makes both firms stand out is the endless stream of investment news and research content. You’ll be able to learn trading and investment basics if you’re just starting out or learn about complex options strategies if you’re a trading veteran. Plus, both firms give clients access to financial research leaders like Morningstar, Zacks and MSCI.

Wide Range of Asset and Market Access

If you want to invest across a wide range of asset classes, both Schwab and Fidelity have substantial offerings. You’ll get thousands of low-cost ETFs and mutual funds, domestic and international stocks, fixed-income products like government and corporate bonds, derivatives like options and annuity and insurance products.

User-Friendly Mobile Apps

Schwab and Fidelity have simple mobile apps that lose very little optionality compared to their desktop platforms. You’ll be able to manage your investments, execute trades, research asset classes, contact customer service and open new brokerage accounts all from your smartphone.

Fidelity vs. Charles Schwab: Key Differences

When it comes to choosing a brokerage for your investment needs, Fidelity and Charles Schwab are two prominent players that offer a range of services for both novice and experienced investors. Each firm has its unique strengths and weaknesses, making it essential to understand their key differences to make an informed decision. From trading platforms and account types to fees, investment options, and customer service, this comparison will highlight what sets these two giants apart in the financial landscape. Whether you're looking for low-cost investing, comprehensive research tools, or a user-friendly experience, exploring the distinctions between Fidelity and Charles Schwab can help you align your investment strategy with the right brokerage for your goals.

Fee Structures

• Fidelity: Generally known for having low or no fees on a variety of services, including trading commissions for stocks and ETFs. They also offer a wide range of no-fee mutual funds.
• Charles Schwab: Also offers commission-free trading on stocks and ETFs. Schwab tends to have competitive fees for mutual funds and some services, but their fee structures can vary depending on the specific product or service.

Investment Choices

• Fidelity: Provides a broad selection of investment options, including a large number of mutual funds and ETFs. They also offer access to a wide range of fixed income and alternative investments.
• Charles Schwab: Offers a diverse range of investment products, including a large selection of low-cost index funds and ETFs. Schwab is known for its robust lineup of proprietary funds.

Trading Platforms and Tools

• Fidelity: Features advanced trading platforms and research tools, including Fidelity’s Active Trader Pro for frequent traders. They offer extensive research and educational resources.
• Charles Schwab: Provides strong trading platforms, such as Schwab Trader and StreetSmart Edge. Schwab also offers comprehensive research tools and educational materials.

Customer Service and Support

• Fidelity: Known for its strong customer service with multiple contact methods, including phone, chat, and in-person assistance. Fidelity also provides extensive online resources and support.
• Charles Schwab: Offers excellent customer service, with 24/7 phone support and numerous local branches. Schwab is also noted for its client-friendly approach and broad support network.

Account Types and Services

• Fidelity: Provides a wide range of account types, including brokerage accounts, retirement accounts, and education savings plans. They also offer financial planning services and a range of banking products.
• Charles Schwab: Similarly offers various account types, including brokerage, retirement, and custodial accounts. Schwab also has banking services and investment advisory services, with an emphasis on integrated solutions.

Fidelity vs. Schwab: Which is Right For You?

When choosing between Fidelity and Charles Schwab, it's essential to consider your investment experience and goals, as both brokerages cater to different types of investors. Fidelity is particularly user-friendly, making it an excellent choice for new investors or those looking for a straightforward trading platform. Its intuitive interface and educational resources facilitate an easier entry into the world of investing.

On the other hand, Charles Schwab is tailored for experienced investors who seek a more customizable trading platform with advanced analytical tools. Schwab offers in-depth research and comprehensive charting capabilities, empowering seasoned traders to make informed decisions.

The right brokerage can significantly impact your long-term finances. Choosing Fidelity may help novices build confidence and knowledge, while experienced investors may benefit from the robust features offered by Charles Schwab. Ultimately, aligning your choice with your investment style can enhance your overall financial journey.

Frequently Asked Questions