Fidelity vs. Robinhood (2024)

Fidelity and Robinhood are fundamentally different in that Fidelity is an established, full service financial brokerage firm and Robinhood is a newer, app-based investment platform targeting younger investors. Fidelity was founded in 1946 and has evolved into a significant force in the online brokerage space with a vast roster of financial products and services suitable for everyone from beginners to experts. Robinhood was founded in 2013 and has stood out as a disrupter in the traditional brokerage industry. However, it's important to note that Robinhood’s overall offering is lacking compared to traditional brokers like Fidelity. Although both Fidelity and Robinhood are popular choices for casual investors and traders, we’ll explore some of the key differences between the two brokers to help you determine which one is the right fit for you and your investment needs.

Usability

Fidelity and Robinhood are vastly different when it comes to the look and feel of their platforms. The differing products and services make a head-to-head comparison somewhat tricky. Fidelity is revamping their entire website to improve the vast legacy website. The user experience at Fidelity is organized with a clean dashboard that contains the usual account information like summary, positions, balances, activity, orders, and documents. The menu items provide one-click access to every corner of the website including customer service, open an account, accounts and trade, planning and advice, news and research, and investment products.

Robinhood does a good job with usability as well, but benefits from having fewer products and services to pack in. Although designed as a mobile-first app, Robinhood’s web portal might actually be easier to use for users looking for the most comprehensive experience. The main menu enables easy navigation to all areas of the website including invest, crypto, cash card, learn, and support. Robinhood recently added advanced charting, but that can’t compete with Fidelity’s ActiveTrader Pro downloadable trading platform. Overall, Robinhood and Fidelity offer good usability—with the caveat that the feature depth of the two brokers isn’t equivalent.

Trade Experience

Desktop Trade Experience

The trading experience on Robinhood’s web and mobile platforms is fast, simple, and streamlined. For new investors, Robinhood has the functionality necessary to trade, but more experienced investors will find the trading platform is missing key features and tools. Additionally, there are no customization features available on Robinhood’s web platform.

Fidelity’s trading experience also has a seamless workflow, but pairs it with comprehensive tools and research. Fidelity’s platforms are highly customizable, enabling you to create personalized layouts, set trade defaults, set hotkeys, and so forth. Fidelity’s platforms also support trading from charts or placing basket trades, which are features not available with Robinhood. Both Fidelity and Robinhood have suitable trading experiences for new investors, but Fidelity is superior to Robinhood for intermediate and advanced investors.

Mobile Trade Experience

Robinhood is a mobile-first brokerage aimed at investors who want a simple trading app without the bells and whistles. Considering this, Robinhood’s mobile experience is what attracts many of its users. Although Robinhood’s quote information streams in real time, it does not offer the same in-depth tools that larger, traditional brokers like Fidelity bring to the table. For instance, you don’t have the ability to trade directly from the chart, the platform does not support conditional orders, and you can’t enter multiple orders simultaneously or stage orders for later entry.

In contrast, Fidelity’s mobile offering is comprehensive, with much of the same functionality as the desktop trading platform. Fundamental analysis, charting, and research are limited in the app, however, and you can't place conditional orders through mobile. That said, Fidelity has recently introduced a beta version, which supports many of the new requested features from its users.

Robinhood is good for simple trades, while Fidelity’s mobile offering is more comprehensive and a better platform when it comes to the complete mobile trade experience. We also found that both platforms were easier to use on the web than with the mobile app. This is an obvious thing in Fidelity’s case, but surprising in terms of Robinhood and speaks to the improvements they have made in their web platform rather than a worsening mobile offering.

Range of Offerings

Fidelity, like most major financial firms, offers a plethora of asset classes, including recently added cryptocurrency as an alternative for 401k providers. One notable limitation is that Fidelity does not offer futures trading and crypto is not currently accessible to retail clients. Robinhood supports stock, ETF, options, and crypto currency trading from a single account. Robinhood just built a non-custodial web3 cryptocurrency wallet. There’s a waitlist and the wallet should be available by the end of 2022.

Fidelity has the clear edge in this category with a wider range of assets. Investors seeking bonds, CDs, mutual funds, and international trading will find Fidelity a better fit than Robinhood.

Order Types

There’s a similar chasm between the order types at Robinhood versus Fidelity. Robinhood has market and limit order types—no conditional orders or order staging is available. Fidelity supports numerous orders, with the most complex only available on the Active Trader Pro platform. Fidelity web users can access market, limit, stop loss, and trailing stop orders. Mobile traders lack access to conditional orders at both brokers, but Fidelity is beta testing this feature while Robinhood looks unlikely to change.

If you’re seeking advanced orders, Fidelity is the logical choice. Beginners who need basic market and limit orders will be fine with either platform.

Trading Technology

Fidelity uses proprietary smart order routing technology that seeks the best available price. The average execution speed is 0.05 seconds, and 87.99% of shares are price-improved, meaning a sale above the bid or a buy below the offer. If you execute a 1,000-share marketable order, you will save an average of $19.24 on the transaction compared to the quote at order entry. Fidelity does not take payment for order flow (PFOF) for stock and ETF transactions.

Robinhood does not publish its trading statistics. This lack of transparency and recent events involving trading restrictions may leave investors wondering whether Robinhood is indeed seeking out the best pricing for customer trades. In contrast with Fidelity, Robinhood takes payment for order flow, which ultimately adds to your trading costs as brokers may start seeking out PFOF to generate revenue. While brokers that accept PFOF are common, Robinhood is on the high end in terms of PFOF per share and the overall revenue generated from PFOF.

Because Fidelity’s price improvement is notably higher than the industry average and doesn’t take payment for order flow, it has a clear edge over Robinhood for its trading technology.

Costs

Like most investment platforms today, Robinhood and Fidelity offer commission free stock and ETF trading. Robinhood also offers free cryptocurrency trading. Additionally, there are no account opening fees, account inactivity fees, or fees for domestic wires with either broker.

However, while Robinhood charges $100 to transfer your account off of the platform, Fidelity does not. Trading on margin requires a Robinhood Gold subscription at $5 per month, which includes $1,000 of margin. Margin usage above $1,000 is charged 7.75% interest.

At Fidelity, margin interest is 10.0575% for a $10,000 balance and 9.075% at $100,000. Both brokers earn money from interest earned from cash, margin interest, portfolio margining, and stock loan programs. Only Robinhood receives payment for order flow.

Robinhood requires a $5 per month Robinhood Gold account to receive margin and other services while access to all Fidelity’s products and services is free. In most areas, Fidelity is more cost efficient than Robinhood. This is particularly true if you consider the overall value Fidelity is providing in terms of platform capabilities, and that is a key reason Fidelity was our 2023 for best online broker overall and best low cost broker.

Research Amenities

Fidelity offers comprehensive research screeners for stocks, ETFs, fixed income, and options, along with many third party research reports. Fidelity users can access trade idea generators, charting, technical and fundamental data, and more. Fidelity’s research offerings stand out even among its peers, so Robinhood is at a steep disadvantage here.

Robinhood’s research offerings are limited and lack asset screeners. Robinhood Gold users have access to Morningstar stock research reports and Nasdaq Level II Market Data powered by NASDAQ Totalview. Robinhood recently improved its charting capabilities and now includes more advanced charts and indicators such as moving averages, relative strength index (RSI), moving average convergence divergence (MACD), Bollinger Bands, and more. Traders will note that this is the bare minimum, but it is a significant improvement from where Robinhood’s charting was.

Fidelity research is extensive and will satisfy all but perhaps the highest level professional traders. Average investors will find basic and advanced research screeners, charting, and external research at Fidelity that can greatly improve the quality of information going into their investing decisions. Robinhood’s research capabilities are slim by comparison. This lack of research amenities at Robinhood is unfortunate because the newer investors the broker serves could greatly benefit from more support in this area.

Portfolio Analysis

Fidelity’s portfolio analysis tools provide information about your Fidelity assets as well as external accounts. The basic Fidelity account dashboard analyzes the usual gains, losses, asset allocation, and performance data. After linking external accounts, the Fidelity free Financial Plan provides a graphical view of account assets, with asset allocation including industry weightings, and comparisons of industry sector weightings within your portfolio. The planner offers digital advice similar to a human financial advisor.

Robinhood offers very little portfolio analysis, especially in comparison to its larger rivals. You can see real-time balances, margin, and buying power, but that’s about it. The home screen shows a one-day graph of your portfolio value and you can click or tap a different time period at the bottom of the graph to see specific dates and values. Robinhood lacks asset allocation analysis, internal rate of return, or a way to estimate the tax impact of a planned trade.

The portfolio analysis win clearly goes to Fidelity. The portfolio analysis tools at Fidelity are suitable for the beginner to advanced investor.

Education

Robinhood has recently improved its Learn portal with additional investment content suited to beginner investors. The app also offers Snacks, a daily email newsletter, a podcast, and a smattering of videos on its YouTube Channel. Robinhood’s educational content is basic and suitable for those seeking “how to” articles about the platform and fundamental investment concepts.

In contrast, Fidelity’s educational resources are suitable for the whole range of investors from beginners to experts. Fidelity’s educational resources are available in various formats, including articles, videos, webinars, and recorded webinars. Fidelity also hosts interactive coaching sessions with the Trading Strategy Desk, where you can discuss questions with a professional trading coach. Moreover, Fidelity provides content that is intended to guide you through major life changes, including marriage and partnering, getting divorced, navigating the college journey, losing a loved one, buying a home, and so on. Rounding out Fidelity's educational offerings are an investing glossary, a comprehensive FAQ section, and guest access for non-customers to use its research and education.

All in all, Fidelity has a sound educational offering and beats Robinhood handily in this category.

Customer Service

Comparatively speaking, customer service between Fidelity and Robinhood are vastly different. Since there is no telephone number, you cannot call Robinhood for assistance. However, you can enter your own phone number for a callback. The Robinhood callback feature is available 24/7. Additionally, Robinhood has a chat box. Perhaps because of this web only approach, Robinhood has not earned a good reputation for its customer service.

Conversely, Fidelity has a 24/7 phone line as well as a chatbox. You can also talk with a live broker or online chat with a live agent. You’ll also find Fidelity branch offices within most major cities across the U.S.

Fidelity has a strong advantage over Robinhood when it comes to customer service.

Security

The security features at both Robinhood and Fidelity are up to industry standards. Both offer two factor authentication, biometric recognition and additional security for unknown devices. Fidelity offers encryption, firewalls, secure email, and 24/7 system surveillance.

Both firms offer FDIC insurance for cash accounts and SIPC insurance for investment accounts. Robinhood’s SIPC insurance includes the basic limits of $500,000 protection, including $250,000 for cash. Fidelity provides additional SIPC insurance covering up to $1.9 million in cash per account. Fidelity also has an additional $1 billion in excess insurance coverage. This insurance protects against institution failure, corporate malfeasance and firm bankruptcy. There is no insurance that protects assets against normal market volatility.

The security features at Fidelity and Robinhood meet industry standards. Large investors with greater assets will be best served at Fidelity due to protection for larger asset amounts.

Account Types

Fidelity has the full range of commonly used accounts and much more. You can open a wide variety of accounts, including:

• Taxable brokerage account
• Rollover individual retirement accounts (IRA)
• Traditional IRAs
• Roth IRAs
• Inherited IRAs
• Simplified employee pension (SEP) IRA
• Self-employed 401(k)s,
• SIMPLE IRAs
• Custodial accounts
• 529 accounts
• Health savings account (HSA)
• Youth account (these are not custodial accounts, as investment decisions are made by young investors)
• Trust and estate accounts
• Fully managed accounts

By contrast, Robinhood only offered taxable cash and margin accounts until January 2023, when the company introduced IRA and Roth IRA retirement vehicles to eligible customers. These accounts even offer a 1% match up to the annual federal limit if funds are electronically deposited and held in the account for five years.

In terms of account types, Fidelity is the clear winner with its wide range of account types.

Final Verdict

For all but the cryptocurrency investor, Fidelity wins in a competition between these two brokers. Fidelity’s span of products, support specialists, platforms (including full-featured Active Trader Pro), and educational resources make the company a good choice for all investors from beginner to expert.

Robinhood gets the job done in terms of basic stock, ETF, and options trading, but it often feels like the bare minimum effort. That said, the free cryptocurrency trading and upcoming web3 wallet make Robinhood a contender in the crypto realm, and this is an area where Fidelity currently does not play a direct role. Despite recent improvements in the Learn portal, new investors should go beyond the Robinhood website to learn about investing before allocating large sums of money to the financial markets.

Ultimately, Fidelity is a better choice than Robinhood for almost all investors—and certainly for all investors uninterested in direct cryptocurrency exposure.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Before trading options, please readCharacteristics and Risks of Standardized Options. Supporting documentation for any claims, if applicable, will be furnished upon request.

There is an Options Regulatory Fee that applies to both option buy and sell transactions. The fee is subject to change. SeeFidelity.com/commissionsfor details.