What Does Fidelity Do?

Fidelity Investments is a renowned name in the financial services industry, offering a broad range of products and services designed to help individuals and institutions manage their investments, plan their financial futures, and achieve overall financial well-being. This article aims to provide an in-depth understanding of what Fidelity does by exploring its various services and the ways in which it aids its customers.

Overview of Fidelity Investments

Fidelity was founded in 1946 by Edward C. Johnson II and has grown into one of the largest asset management companies in the world. With a mission to inspire better futures and deliver better outcomes for the customers and businesses they serve, Fidelity operates globally, providing services to millions of clients, including individual investors, employers, and financial professionals.

Core Services Offered by Fidelity

Fidelity provides a multitude of services that cater to different financial needs and goals:

1. Investment Management

Investment management is at the core of what Fidelity does. They offer a wide range of investment products, including:

• Mutual Funds: Fidelity manages a host of mutual funds, which are investment vehicles that pool money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities.
• Exchange-Traded Funds (ETFs): These are similar to mutual funds but trade on stock exchanges like individual stocks.
• Individual Stocks and Bonds: Investors can buy and sell individual stocks and bonds through Fidelity’s platforms.

Fidelity employs experienced fund managers and uses cutting-edge technology and research to optimize investment strategies and build diverse portfolios that meet varying risk tolerances and investment horizons.

2. Brokerage Services

Fidelity offers comprehensive brokerage services for both individual and institutional investors. These include:

• Trading Platforms: Fidelity provides robust online and mobile platforms for trading stocks, bonds, ETFs, options, and more, with access to extensive research and investment tools.
• Zero Commissions: Clients can trade U.S. stocks and ETFs with no commission fees, thereby encouraging more frequent participation and investment diversification.
• Broker-Assisted Trades: Fidelity offers personalized assistance from financial experts for executing trades when needed.

3. Retirement Planning and Services

Retirement planning is a crucial element of personal finance, and Fidelity offers specialized services to help clients prepare for their retirement:

• 401(k) Plans: Fidelity is a leading provider of employer-sponsored retirement plans, managing benefits for employees and ensuring regulatory compliance.
• Individual Retirement Accounts (IRAs): These accounts offer tax advantages and are a flexible way for individuals to save for retirement.
• Retirement Planning Tools: Fidelity provides numerous calculators and tools to aid individuals in estimating retirement needs and planning accordingly.

4. Financial Planning and Advisory Services

Fidelity offers both digital and personalized financial planning services:

• Robo-Advisory Services: Through Fidelity Go, clients can access automated investment management that uses algorithms to create and maintain a diversified portfolio.
• Personalized Advisory Services: For those seeking a human touch, Fidelity provides access to financial advisors who offer tailored advice based on individual financial situations, goals, and risk tolerances.

5. Wealth Management

For high net-worth individuals, Fidelity provides specialized wealth management services. This includes:

• Private Wealth Management: Personalized strategies concerning tax-efficient investment portfolios, estate planning, and philanthropy.
• Family Office Services: Comprehensive management of financial affairs, often including advanced investment strategies and succession planning.

6. Cash Management and Banking

Fidelity offers cash management solutions that include:

• Fidelity Cash Management Account: This account works like a checking account, providing free ATM withdrawals, checkwriting, bill pay services, and more.
• Direct Deposit and Money Transfers: Quick and seamless transfer of funds using Fidelity’s secure electronic systems.

7. Insurance Services

Fidelity assists clients in managing risk with insurance products:

• Life Insurance: Options to help protect the financial future of loved ones.
• Long-Term Care Insurance: Planning for healthcare needs later in life.
• Annuities: A range of annuity products aiming to provide steady income during retirement.

Fidelity’s Technological Innovations

Fidelity heavily invests in technology to enhance client experience and improve service delivery. Notable innovations include:

• Fidelity Mobile App: This app allows clients to trade, check balances, and manage their investments on-the-go.
• Digital Innovations: Fidelity Labs experiments with new technologies, including blockchain, to ensure they remain at the forefront of financial tech advancement.

Fidelity’s Commitment to Investors

Trust and Transparency

Fidelity prides itself on its commitment to trust and transparency, offering independent research and insights to its clients. They are devoted to protecting clients' interests and maintaining high ethical standards.

Education and Resources

Fidelity provides extensive educational resources to help investors make informed decisions. This includes webinars, articles, and real-time analysis of financial markets.

ESG and Sustainable Investing

Fidelity supports Environmental, Social, and Governance (ESG) investing, reflecting a growing trend among investors who wish to consider these factors in their investment decisions.

Common Questions & Misconceptions

Is Fidelity Only for Wealthy Investors?

While Fidelity offers premium services for high net-worth individuals, they provide investment solutions and resources suitable for investors of all levels, including those just beginning to invest.

Does Fidelity Charge High Fees?

Fidelity has actively reduced and eliminated fees on many of their products, including offering zero expense ratio mutual funds and $0 commission trades for U.S. stocks, ETFs, and options.

Can I Access International Markets with Fidelity?

Yes, Fidelity offers access to a wide range of global markets, allowing investors to diversify their portfolios internationally.

Final Thoughts

Fidelity Investments stands out as a comprehensive financial services provider with a strong commitment to client service, innovation, and education. Whether you’re looking to save for retirement, manage wealth, or simply invest wisely, Fidelity offers an array of tools and services to help you navigate towards your goals. By continually prioritizing client needs, embracing technology, and maintaining rigorous ethical standards, Fidelity works tirelessly to empower its clients to achieve financial success and security. For those interested in furthering their financial understanding or investment strategies, Fidelity’s wealth of resources and expert guidance make it a formidable ally in the financial landscape.