Our bottom line
Fidelity’s Stocks & Shares ISA is ideal for novice investors. Its tools help you find suitable investments based on your own specific preferences. While it’s not your cheapest option, Fidelity’s fund discounts may help you recoup the cost of your account. Small account holders can also reduce the cost by setting up a regular savings plan.
Remember, if you’re ever unsure about the suitability of an investment for your own circumstances, please seek independent financial advice first.
Top feature of Fidelity’s ISA account
Fidelity’s “Pathfinder” tool makes it effortless to pick a fund that’s right for you. Simply tell it how much risk you’re willing to bear, and whether you’re investing for income or growth. Fidelity presents you with a shortlist of options for easy comparison. And it has negotiated discounts with many of its featured funds on your behalf.
Fidelity’s commission prices
Fidelity charges £10 for online trades, which is about average for the industry. However, phone trades cost substantially more at £30.
If you’re reinvesting dividends, or placing trades through a regular savings plan, these cost £1.50 each.
Fees you should know about
Fidelity charges a small annual fee – usually based on a percentage of your account balance. Here’s how it works:
- On less than £7,500, you pay £45 per year (or 0.35% with a regular savings plan)
- Junior ISAs pay £25 per year
- On £7,500-£250,000, you pay 0.35% per year.
- On £250,000-£1million, you pay 0.20% per year.
You always pay the lowest possible amount on your total balance. Suppose you invested £500,000 with Fidelity (quite a lot of money, I know). You would only pay 0.20% on the full amount. You would not pay 0.35% on the first £250,000 and 0.20% on the rest.
Since this year’s ISA allowance is £20,000, you would most likely pay the 0.35% account fee. You can, however, transfer your other ISAs to Fidelity, which may raise your account balance.
In fact, if you move a minimum of £1,000, Fidelity will cover up to £500 of your exit fees. You can get £20-£1,000 cashback when you transfer over £10,000. Right now, Fidelity also offers £25 cashback when you invest a £2,500 lump sum or set up a regular savings plan of £200/month.
Small account holders should seriously consider a regular payment plan. Not only can it dramatically reduce your account fees, it could also lower your trading commissions.
Buying shares, ETFs and funds with a Fidelity ISA account
Fidelity offers you a wide range of shares and funds. And it’s easy to pick investments based on your preferences. Use the “Investment Finder” tool to choose between shares, funds, ETFs and Investment Trusts. Fidelity explains – in simple language – how each of them work.
Once you’ve chosen an investment, Fidelity’s filters help narrow down your search. Shortlist company shares based on factors like dividend yield and company size.
Fidelity is also connected to Morningstar (a respected fund rating service) to help you compare funds’ performances. You can pick funds based on their Morningstar rating. Just keep in mind that top performing investments are often priced accordingly by the market, and don’t always offer the best value.
Fidelity ISA’s platform
Setting up a Fidelity ISA takes less than 10 minutes.
All you need is your National Insurance number, debit details, and bank details (if you’re setting up a regular payment plan). You only need £50 to begin.
Fidelity’s platform can be used online, or with a mobile app. It’s easy and intuitive for beginner investors. And you could potentially recoup the cost of your account by getting a special discount on funds.
As I write this, Fidelity have negotiated discounts with 246 funds. Many are quite generous, with savings of up to 0.75%. This may not sound like a huge benefit. However, compounded over your lifetime, a small percentage saving could have a big impact on your wealth.
Fidelity ISA’s research offerings
Normally when you buy shares, you’d enter your brokerage account knowing what companies and funds you’re interested in. From there, you’d use your brokerage tools to help you make a more solid decision.
Fidelity’s tools reverse this process.
It helps you find the right investments for you, even if you have no idea where to start. You need only answer a couple of questions about your preferences. Fidelity gives you a shortlist of suitable funds to match your needs.
Also useful is the ‘Select 50’ tool. This lets you search the top fund picks chosen by Fidelity’s expert analysts. This could be particularly powerful if you already do some light financial reading of your own.
Let’s say you’re reading an article on Fool.co.uk, and you discover that Asia and Emerging Markets might be a good place to invest. In a few clicks, you can pull up all of Fidelity’s favourite emerging market funds. Compare their fees, past performances and investing approaches at a glance.
When you see a fund you like, click the “Our View” button. You get a brief expert summary on what the fund does. Hours of research is distilled into a few succinct paragraphs.
Keep in mind though that any investment information and expert opinion provided on Fidelity’s website is not personal advice and is designed for investors who are happy making their own investment decisions. If you’re unsure about the suitability of an investment for your circumstances, you’ll want to seek out your own independent financial advice.
Service and support
Fidelity’s call centres are based in the UK and Ireland. They’re open 6 days a week.
Since your ISA will probably hold the bulk of your savings, this is a huge benefit. Just knowing there’s someone available when needed makes the world of difference.
And Fidelity has an admirable track record with customers, scoring 4.1 stars on Trustpilot.
Is a Fidelity Stocks & Shares ISA right for you?
If you’re an investing beginner, or short on time, Fidelity is probably a good choice for you.
You could enjoy savings and cashback benefits with its regular savings plan. Plus, you could take advantage of the numerous discounts available on featured funds.
Its easy-to-use search tools help you target the investments which match your specific needs. And the analysts’ top 50 funds list provides fascinating expert guidance as you look for fresh ideas.
It’s like having a professional investor right there in the room with you.
Fidelity’s fees and trading commissions could weigh on the short-term trader’s account. This is more appropriate for the buy-and-hold, long-term investor.
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