Fidelity—A Pleasure or an Insult, Depending on Your Needs
Written: Jun 13 '01 (Updated Oct 07 '01)
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Product Rating:
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Pros: Site is multifaceted, powerful--albeit not speedy. Carries more mutual funds than some others.
Cons: Account transfers may require considerable time. Reps are polite--if you don’t phone too often.
The Bottom Line: For those requiring relatively little handholding, Fidelity’s first-rate in most respects. Alternatively, consider the brokerage services of Vanguard, American Century, et al.
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| henry_thoreau's Full Review: Fidelity Investments |
Perhaps I will benefit someone by relating my experiences—satisfying and otherwise—with my Fidelity brokerage accounts. In the protracted bearishness of these times, and in light of my depleted portfolio, it truly pains me even to mention stocks, funds, or brokerages. But I’ll set aside my inexorable malaise just long enough to convey several impressions.
I opened my first Fidelity (taxable) brokerage account in January of 2000. Being, by proclivity, a “mutual fund junkie,” and having formerly invested directly with numerous fund companies (not in brokerage accounts), I’d finally grown weary of all the paperwork, especially at tax time. It also was very time-consuming to determine the value of my entire portfolio on a given day. Consolidating everything--or virtually everything--into one account and onto one statement had come to seem more than a little desirable to me. Indeed, I continue highly to appreciate that aspect of my Fidelity account.
However, be forewarned that it may take considerable time--a month or even more--for funds to be transferred from your existing account(s) to your new brokerage account. (This is generally true whether you choose Fidelity or any competing brokerage.) Using the transfer forms that were mailed to me after my initial phone call to Fidelity, I submitted my information and waited weeks and weeks before all my scattered stock funds were finally incorporated into my new account. In fact, due to the sorts of mysterious snafus that inevitably happen to yours truly, in one instance it took several months to get a particular (Wasatch) mutual fund transferred (I only had a smidgen of cash in that one, and so I wasn’t exactly panicked). Only after I called Fidelity’s attention to this problem did they finally get it resolved. I suspect that, had I not intervened, that fund would have remained “un-transferred” to this day. Fidelity politely claimed that the problem lay with the other fund company’s transfer agent; but my question is, why couldn’t Fidelity have followed up, or at least have called my attention to the situation?
Not long after establishing my taxable brokerage account I likewise arranged to transfer my separate Vanguard and Longleaf Partners ROTH IRA accounts into one Fidelity IRA brokerage account. This, too, was done in the interest of consolidating paperwork. While you can’t actually put your IRA money into the same account as your taxable money, at least everything still gets mailed to you in a single envelope and on a single statement, reducing clutter and simplifying matters at tax time. It really feels as though everything’s in a single account.
Unfortunately, with my Longleaf Partners IRA I experienced exactly the same “delay-of-transfer” snafu as occurred with the above-mentioned fund. After several months, only by going to the trouble of phoning and calling Fidelity’s attention to the problem did things finally get sorted out. To Fidelity’s credit, their phone reps were very polite and profusely apologetic about the “inconvenience,” and the situation did get rectified ASAP.
Fidelity’s phone reps, indeed, have been generally polite and helpful in all matters, with one glaring exception. Early in 2000, idiot that I am, I invested some—thankfully not the lion’s share!—of my parked cash in a couple of internet stock funds which were then so new that Fidelity’s automated systems didn’t recognize their names or symbols for several weeks. (To their credit, however, Fidelity was virtually the only “supermarket” brokerage through which I could even get those very new funds; this was the biggest reason I’d chosen Fidelity over Vanguard and American Century.) To sate my curiosity regarding my new Internet funds during the initial two weeks or so, I phoned Fidelity as often as once a day to ask a rep for the most recent fund price. Eventually, the funds were recognized by the automated system, and, besides, I was no longer so curious, and so I soon stopped calling altogether.
Well, several months later, needing to straighten out the aforementioned snafus regarding Fidelity’s continuing failure to transfer two of my preexisting accounts, I phoned them for the first time in that long while. At the close of a very brief conversation, the Fidelity rep informed me, somewhat peremptorily, that I mustn’t be phoning them so much—in effect, Fidelity didn’t want me “pestering” them so frequently (and thereby costing them money)! To be sure, his precise words were somewhat more diplomatic than that, but that was the gist.
Imagine my irritation upon hearing this! First, it hadn’t been my fault that Fidelity’s vaunted automated system hadn’t allowed me to access the daily price changes of my new internet funds during those early days; I never would have “pestered” them had their touted systems been fully functional. Second, through no fault of mine, after several months Fidelity had done nothing to determine why two of my mutual funds still hadn’t been properly transferred. And when I myself finally had to bring the matter to their attention, I got gently rebuked for “calling too often”—despite the fact I hadn’t phoned them at all in a very long while!
At that point, I very seriously considered transferring my Fidelity accounts to American Century, whose phone reps, from all I’ve ever been able to discern, are unfailingly patient and polite, regardless how often one phones them. (I even carefully outlined my Fidelity frustrations with an American Century rep and asked him if I’d be under any such phone-calling constraints with his company, and I was assured that such would not be the case. I suspect that Vanguard would likewise be more accommodating in this regard, but I haven’t verified this.)
The fact that I (so far) haven’t gotten around to bailing out of my Fidelity brokerage account(s) can be attributed to the following: (1) I don’t feel like going through the potentially protracted process of getting things transferred all over again; (2) I know full well that, now the fund-transfer troubles have all been resolved, I will only very seldom be phoning Fidelity anyway; and (3) Fidelity subsequently has been more polite to me on those occasions when I do phone, no longer implying that I’m pestering them.
Fidelity, like any company, wants to maximize profits. They’d be delighted if everyone would just use their automated systems which are far cheaper to maintain than a vast crew of human phone reps. While I can understand their profit motive, it would seem that much of their competition does a relatively better job of making their “live” phone reps cheerfully available to customers, regardless how often they may call.
If I had it to do over again, I’d probably go with Vanguard or American Century. For those who want to include Vanguard mutual funds within their brokerage accounts, note that Vanguard's funds may not be available via other brokerages, at least not without paying a substantial transaction fee.
As with most “fund supermarket” brokerage firms, many mutual funds not on the Fidelity Funds Network “no transaction fee” list are only available at additional cost--and that cost can be hefty. For me, such tacked-on fees pretty much preclude buying such funds via Fidelity. Also, as with virtually any brokerage, there are a few securities you simply can’t hold in your Fidelity account (e.g., shares of American Century’s "Giftrust" fund--which can't even be held in an American Century brokerage account!). Therefore, before opening an account, double-check that you’ll be able to transfer--or purchase--all the securities you want.
I've successfully purchased various securities via Fidelity's phone reps, their automated phone system, and their web site (the latter seems a tad slow, but full-featured and more than adequate for the average investor's needs). Via the automated approaches, I've also easily sold securities; using a live rep to sell entails an additional fee! Note: the phone reps will cheerfully explain how to use their web site or automated phone system so that you can make a sale sans the additional fee.
For anyone needing only occasional, limited assistance from live phone reps, Fidelity is generally first-rate. You likely won’t be disappointed with any aspect of their multifaceted web site or automated phone system, and, generally, you’ll be able to reach a polite, helpful, human rep fairly quickly (although I've occasionally encountered very considerable delays). You could do a lot worse than Fidelity. And you might also do just as well, or even better, elsewhere. Finally, for anyone fortunate enough to have a mortar-and-brick Fidelity office in, or very near, their own neighborhood (I didn’t), that would surely expedite setting up a new brokerage account, not to mention any face-to-face “handholding” you might crave thereafter.
Recommended:
Yes
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henry_thoreau
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Member: Mike
Location: Olathe, KS USA
Reviews written: 222
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I expect to return to "full-time" reading/rating by January. (Currently hindered by MAJOR home-improvement project!)
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