Robinhood vs Fidelity Comparison 2020: Our Choice Might Surprise You

Robinhood vs Fidelity: Broker Comparison

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For investors in 2017, Robinhood was a pioneer in commission-free ETFs and mobile trading.

In fact, you could say that they were responsible for changing the way that other brokerages viewed fees, as many have changed over to commission-free investing. However, Fidelity has always been a low-cost brokerage as well.

In the past few years, Fidelity has updated its platform, and Robinhood has remained stagnant. With new tools and zero commissions, as well as a big list of mutual funds, Fidelity has pushed forward and become one of the best brokerages for all types of investors.

While Fidelity has had some ups and downs with former partners, it’s still widely regarded as one of the best brokerages for online trading.

Investor Warning: All securities trading, whether in stocks, exchange-traded funds (“ETFs”), options, or other investment vehicles, is speculative in nature and involves substantial risk of loss. Robinhood Financial encourages its Customers to invest carefully and to use the information available at the websites of the SEC at http://www.sec.gov and FINRA at http://FINRA.org.

Robinhood vs. Fidelity – Quick Comparison 

Here are some highlights from our comparison and review:

What to Expect from Robinhood

  • Simple platform meant for the savvy mobile trader
  • $0 commission fees on ETFs, stocks, and options
  • Without any research tools or streaming quotes, investors will need to look elsewhere for resources
  • Offers lower margin rates than every other brokerage at 5%, but you have to pay a $5/month subscription to Robinhood Gold

What to Expect from Fidelity

  • A robust platform with hundreds of resources for research, news, streaming data, and education
  • $0 commission fees on ETFs, stocks, options, and mutual funds
  • More investment types and market orders available
  • Customizable apps that allow you to place complex traders and access research tools
  • Customizable charts with streaming quotes and data
  •  Place orders directly from streaming quotes or charts
  •  Robo-advisory and broker-assisted trades available
  •  24/7 customer support with email, phone, and live chat

Fees and Commissions

Fidelity and Robinhood are similar in their fee structure. Both of these brokers offer commission-free trades, but Robinhood was a pioneer in “free trading.” Fidelity has far more investment types to offer, however.

Fidelity Commissions Margin Rates and FeesFidelity charges $0 for stock and ETF trades, as well as $0 plus $0.65 per contract for options. You can also purchase pink sheets, mutual funds, and bonds with Fidelity. International investors are also welcome.

Robinhood is definitely a discount brokerage and always has been. Their commission-free ETFs and stocks were legendary until most brokerages adopted the free fee structure in October 2019.

Since then, their offerings have become a little bit less competitive, since they only trade in stocks, ETFs, and options. This may work for investors who don’t need anything else though.

Investors pay zero commissions for stocks, ETFs, and options with Robinhood. In addition, there is no per contract cost for options.

While there are no mutual funds, Robinhood investors do have access to the lowest margin rates, which are 5 percent for all accounts. You will have to pay a $5 fee to join Robinhood Gold, however.

Fees and Commissions with Robinhood

  • No minimum account balance
  • Commission-free stocks, ETFs, and options
  • $0 per leg, $0 per contract options
  • Lower margin rates at 5%, must pay $5 per month to join Robinhood Gold
  • No futures, mutual funds, forex, or international trades

Fees and Commissions with Fidelity

  • No minimum account balance
  • Commission-free stocks, ETFs, options, and mutual funds
  • Pink sheets also available
  • US Treasury, corporate, and municipal bonds available
  •  International trades allowed

Winner: This is a difficult selection since they both offer commission-free stocks, ETFs, and options. Overall, we found Robinhood to have a cheaper platform for the most popular investment types, but if you want mutual funds or bonds, Fidelity would be the better choice.

Investment Selection

Fidelity has one of the best reputations for low-cost investing, especially if you like options and mutual funds. Their platform is best for retirement investors, active traders, commission-free trading, and premium investment research.

Fidelity offers:

  •  Stocks
  •  OTCBB/Pink Sheets
  •  Options brokerage
  •  Complex options
  •  Commission-free ETFs
  •  Mutual funds
  •  Bonds

There is definitely a wide selection for investors. Fidelity makes sure to offer everything a full-service brokerage does without getting into futures and forex. If you need help, you can also work with a broker, though it will cost you.

In comparison, Robinhood is pretty simple. It focuses on the most popular investment types for today’s traders including:

  •  Stocks
  •  Options
  •  Complex options
  •  Commission-free ETFs
  •  Cryptocurrency

For the long-term investor or retirement planner who enjoys mutual funds, Robinhood is not going to be the choice for you. They do not come close to any other brokerage offerings, but this is largely on purpose. Since the beginning, Robinhood has made it a point to only cater to certain types of investors.

If you are an options investor, the $0 per leg and $0 per contract investment selection with Robinhood will help you save a bit of money, but it may not be worth it without robust tools and options strategy testing. We provide some more insights into this bare-bones approach in “Online advisors and education offerings.”

In addition, Robinhood Crypto is a new trade experience that is offered to certain customers in specific states. You can trade in Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic, and Litecoin.

Winner: Fidelity, hands-down. This discount brokerage really provides a plethora of investment types to satisfy any type of investor.

Trade Experience and Security

The main difference here is in speed and trade execution accuracy. Fidelity has been commended previously for its price improvement.

Most trades get a slight price improvement due to the accuracy of Fidelity’s trade execution. You can also use Active Trader Pro, which is the advanced Fidelity platform, to trade on streaming data and customizable charts.

Fidelity Online Trading Page

Fidelity spiffed up its platform to include more guidance and contextual help. While this can be a bit more complicated, the brokerage genuinely tries to help beginner investors learn more about their selections and what would be best to trade.

Robinhood has a different approach. They expect investors to know what they want to trade. The simple, stripped-down approach works if you are looking for budget-friendly trades and little else.

The platform is easy-to-use and offers free commissions on all of its products, so you don’t have to worry about any fees.

The platform offers a website and mobile app that helps you send market orders quickly, and there are some options trading capabilities if you already have a strategy. However, it’s not as robust as Fidelity when it comes to testing and digging into different options. Quotes are also delayed, and all trades must be manually entered.

In terms of security, Fidelity and Robinhood’s investors are protected under the Securities Investor Protector Corporation (SIPC), and they offer secure logins.

However, Robinhood may look too easy for beginner investors. Without any research tools or streaming quotes, it can be easy to enter trades that won’t pay off well in the end. In contrast, Fidelity gives investors every type of risk management information and other tips to increase their chances of earning more.

In addition, Fidelity allowed you to place trades on international stock exchanges. You can play markets in 25 different countries. This is a significant advantage over many brokerages, not just Robinhood, as online brokerages typically shy away from other foreign markets.

Winner: Fidelity offers the best platform for trading. Though Robinhood is sleek and efficient, you really do not get any additional help to make the right trades, which could lead to more losses.

Online Advisors and Educational Offerings

Fidelity offers an abundance of screening tools to help you manage risk and pick new investments. You can screen all types of investments including stocks, ETFs, options, fixed income, and mutual funds.

Many of the tools are proprietary and have been built for the Fidelity platform, so they are extremely easy-to-use, and they come with hints and tips to help beginners.

On Active Trade Pro with Fidelity, investors can set up streaming video and select multiple news feeds to follow, including Bloomberg TV. There are also stock snapshot pages, which deliver a quick view of ratings from MSCI. These cover environmental, social, and governance ratings.

Screenshot of Fidelity Active Trader Pro Page

Fidelity’s online learning center has everything you could want as an investor.

Whether you are a beginner learning about the basics or an advanced trader looking to up your positions, you will find articles, videos, webinars, and infographics about all kinds of topics. There are also several channels for analysis, whether you want fundamental or technical.

Robinhood is not as robust when it comes to screening and educational tools. There isn’t a learning center beyond learning how to use Robinhood’s tools.

The brokerage expects traders to understand their strategies and look elsewhere for help. There is always a trade-off for paying $0 commission on all investments.

However, Robinhood does allow you to set up news stories from Seeking Alpha, Yahoo Finance, Associated Press, Marketwatch, and many other sources. Clicking on any news headline will open up a window for you to read through.

Charting – for the purpose of technical analysis –  is also pretty basic with this platform, and you have to refresh to get the latest data. Robinhood does not have streaming data or quotes.

Robinhood

  • No screeners
  • No advisors – broker nor robo
  • Basic education mostly involving how to use the app
  • Some charting but with only five years of pricing history
  • The app is not made to help you with research or education

Fidelity

  • Offers multiple screeners for stocks, ETFs, fixed income, mutual funds, and options
  • Access to top robo-advisors and real brokers
  • Look at stock snapshot profile pages to see data and social responsibility signals
  • Streaming quotes available and customizable charts with real-time data
  • Custom charting package available with data from Recognia
  • Fidelity offers more education tools and testing options to help investors learn more about trade methodologies

Winner: Fidelity! The brokerage was made to help investors pick the best investment. Robinhood’s basic platform is only made to offer free trades to specific investors who already know what they want to trade. You would need to look elsewhere for research and testing strategies if you solely used Robinhood.

Mobile and New Trade Tech

Fidelity has improved its mobile apps, and they are easier to use than the website. This reflects some new statistics showing that there was a 50 percent increase in trades placed with mobile trading apps from 2017 to 2018.

Screenshot of Fidelity Mobile App Download PageYou can customize your Fidelity home screen to include news, streaming quotes, and watchlists. If you make changes on mobile devices to your watchlists, these will reflect on the website as well.

Robinhood was one of the first mobile brokerage apps. For that reason, it’s still pretty fresh, but it’s also stripped down.

There aren’t as many tools available as with Fidelity. You can search by collections of stocks, which groups them by categories such as tech stocks or female CEO.

Watchlists are also synced with the mobile app and website. However, you won’t get any streaming quotes or real-time data help from Robinhood.

Robinhood

  • Very simple app with stripped down ordering tools
  • Sync watchlists from web to app
  • No streaming quotes or real-time data

Fidelity

  • Get streaming data and customizable home screen with news feeds
  • Watchlists sync up between app and web
  • Research and advisory tools available

Frequently Asked Questions about Robinhood and Fidelity

Is Robinhood or Fidelity Best for Retirement?

Fidelity wins for retirement planning and mutual funds. In fact, it’s one of the best brokerages to choose if you want low-cost mutual funds. It was the first to offer market index funds with no expense ratio, which is basically unheard of in the industry.

These index funds included Fidelity Zero Total Market Index Fund, Fidelity Zero Large Cap Index Fund, Fidelity Zero Extended Market Index Fund, and Fidelity Zero International Index Fund.

In addition, Fidelity offers a high cash sweep rate. The brokerage places all-cash directly into a new retail brokerage and retirement accounts into the Fidelity Government Money Market Fund.

As of October 2019, the fund had a 1.61% interest rate. Investors may opt to sweep cash into a low-cost FDIC-insured account if they choose.

Does Robinhood or Fidelity Provide the Best Stock Research? 

Robinhood does not provide any stock research. Without streaming quotes or data, you really only have news feeds and watchlists available. Fidelity is a whole other beast when it comes to research.

In fact, the brokerage excels in stock research and makes it easy to manage risk with a variety of tools. You can analyze your portfolio with research from over 20 different data providers, including Recognia, Ned Davis, McLean Capital Management, and Thomson Reuters.

What Brokerage Offers Better Customer Support: Fidelity or Robinhood?

Robinhood is a stripped-down platform that does not offer phone support or chat help. You can use their website to send an email to support. They may respond within 24h hours.

Fidelity receives high praise for its 24/7 customer service by phone, chat or email, and you can walk into a branch location for broker help or seminars. You can use their virtual assistants to find more information, or they have live chat available.

Which One is Right for You?

In our books, Fidelity is a clear winner when stacked up against Robinhood.

The main difference is that Fidelity charges as little as possible while offering as many resources as it can. Even though it is a discount broker, Fidelity still offers more services, resources, screeners, education, and convenience than Robinhood’s stripped-down platform.

In addition, Robinhood is only made to handle the most popular investment types. Fidelity offers way more possibilities for long-term investors and beginner traders, and you won’t pay much in terms of fees.

Most stock traders can find everything they need to manage risk and make the smartest investments with Fidelity. For everything else, there is a 24/7 customer support line or a branch location with brokers who can assist with your trades.

About Author

Tim Fries Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim is also the co-founder of Protective Technologies Capital (protechcap.com).