Fidelity and Robinhood are fundamentally different in that Fidelity is an established, full service brokerage firm and Robinhood is a newer player that has received a lot of publicity, both good and bad. Fidelity was founded in 1946 and has evolved into a significant force in the online brokerage space. 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 current offering is lacking compared to legacy brokers like Fidelity. Although both Fidelity and Robinhood are popular choices for casual investors and traders, we’ll look at 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. Fidelity is quite seamless and easy to use. Opening a brokerage account is simple and the website is easy to navigate once you find the numerous sub-menus. You can also use the search bar at the top of each page if you can’t find what you’re looking for. That said, Robinhood is even easier to use and provides a user experience that is one of a kind. Thanks to a mobile app with a clean design that focuses on the basics, Robinhood is an easy choice for investors who primarily use mobile devices to manage their accounts. One caveat is that there is very little you can do to personalize or customize Robinhood’s app to your desired trading experience. In contrast, Fidelity’s Active Trader Pro program is fully customizable. Nonetheless, Robinhood has the one up on Fidelity as it pertains to usability.

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 to be less than adequate. Additionally, there are no customization features available on the web platform. On the other hand, Fidelity’s trading experience has a seamless workflow. Fidelity’s platforms are also highly customizable, enabling you to create personalized layouts, set trade defaults, set hotkeys, and so forth. Fidelity’s platforms also supports trading from charts, or placing basket trades—features not available with Robinhood. Both Fidelity and Robinhood have trading experiences that will be suitable for new investors, but we think Fidelity has a clear advantage in this category because of its ability to serve investors of all experience levels.

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, such as Fidelity, do. 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 and charting 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. Altogether, Fidelity’s mobile offering is more comprehensive and robust than Robinhood’s and we found it the better platform when it comes to the complete mobile trade experience.

Range of Offerings

Fidelity clients will be able to trade a plethora of asset classes due to the broker’s wide range of offerings. One notable limitation is that Fidelity does not offer futures, futures options, or cryptocurrency trading. On the other hand, Robinhood allows you to trade cryptocurrencies in the same account that you use for equities and options. Beyond that, Robinhood has a very limited range of offerings in comparison to Fidelity, so Fidelity has the edge in this category.

Order Types

Robinhood has a limited set of order types. You can either enter market orders or limit orders for the available assets. You will not be able to enter conditional orders. Comparatively, Fidelity supports numerous order types on the web and Active Trader Pro platforms, which includes the common orders available at most brokers in addition to conditional orders. It is important to note that conditional orders are not available on Fidelity’s mobile app. Both brokers allow their customers to select certain tax lots when selling. Overall, Fidelity has the upper hand over Robinhood in this category as it offers a wider range of orders overall, even if not all of the orders are available on mobile.

Trading Technology

Fidelity uses proprietary smart order routing technology that seeks the best available price. The average execution speed is 0.04 seconds, and 85.53% of shares are price-improved, meaning a sale above the bid or a buy below the offer. According to July 2020 to June 2021 statistics, if you execute a 1,000-share marketable order, you will save an average of $18.97 on the transaction compared to the quote at order entry. Unlike many other brokers, 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. Because Fidelity’s price improvement is notably higher than the industry average, it has a clear edge over Robinhood for its trading technology.

Costs

Both Robinhood and Fidelity are similar in that they offer commission free trading for stocks, ETFs, and options contracts. Additionally, there are no account opening fees, account inactivity fees, or fees for domestic wires with either broker. However, while Robinhood charges $75 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 2.5% interest, which is relatively low. At Fidelity, Margin interest is 8.325% for a $10,000 balance and 6.825% at $100,000, which is below the industry average. 

Both brokers earn money from interest earned from cash, margin interest, portfolio margining, stock loan programs, and payment for order flow. However, Fidelity is much more transparent around its payment for order flow activity. The broker does not accept PFOF for equity trades, but it receives an average of $0.2514 per options contract. Although the costs of working with these brokers are relatively similar, we think Fidelity has the better offering and a healthier amount of cost transparency.

Account and Research Amenities

Fidelity has all the account and research amenities you would expect from a large broker. These include flexible screeners, trading idea generators, advanced charting, access to in-house and third-party research, and more. Contrasted with Fidelity, Robinhood does not have any stock, ETF, mutual fund, or options screeners. It also does not offer any tools, calculators, or trade idea generators. Robinhood does offer news, third-party research, and dividend reinvestment plans, but these are basic features you would expect from an online broker. Although Robinhood’s overall account and research amenities are meager in comparison to larger rivals, it has some useful features including cash sweeps and basic charting. Overall, however, it is clear that Fidelity has the edge when it comes to account and research amenities.

Portfolio Analysis

Here again, 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. There is no asset allocation analysis, internal rate of return, or way to estimate the tax impact of a planned trade. There is also no trading journal. 

In contrast, Fidelity offers a variety of tools to help you figure out if your portfolio is on track. As a customer, you can see an overview of your top positions and ratings, asset allocation, stock analysis, and fixed income analysis. You will also be able to see unrealized and realized gains/losses, account balances, margin, buying power, and internal rate of return all displayed in real-time. For these reasons, investors who want to track different metrics pertaining to their portfolio will be better served using Fidelity, as the broker enjoys a large advantage over Robinhood in this category.

Education

Although both Robinhood and Fidelity provide educational resources for their customers, Robinhood’s education offerings aren’t as robust as they should be considering they are a broker whose target client is new to investing. Robinhood currently offers Snacks, a podcast, newsletter, and video series which delivers the day’s top financial news stories to its customers every weekday. It also offers a Learn resource, which offers financial information, definitions, and market explainers to educate you on financial terms and concepts. 

The Fidelity Learning Center is robust in comparison and offers educational content in various formats, including articles, videos, webinars, infographics, 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 again 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. Additionally, Robinhood has chat box capabilities, and all customer service is done through the website or app. 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. We found Fidelity has a strong advantage over Robinhood for customer service.

Security

Both online brokers are similar in the security measures implemented. The two platforms support two factor authentication, biometric recognition, as well as additional security measures for unknown devices. Although two-factor authentication is optional for Robinhood users, it is required for high risk transactions at Fidelity. 

Robinhood is a member of Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). However, Robinhood carries no excess SIPC insurance. Fidelity carries excess SIPC insurance with a $1.9 million limit on uninvested cash. According to Fidelity, this is the maximum excess SIPC protection currently available in the brokerage industry.

As far as reliability is concerned, Fidelity reported no widespread or serious platform outages and the Identity Theft Research Center reported no significant data breaches. At the same time, Robinhood has reported data breaches within the past 4 years. The most recent was in 2021 impacting millions of customers. Although both brokers have security features in common, Fidelity has an advantage over Robinhood in this category because of its additional features and overall reliability.

Our Verdict

The competition between Robinhood and Fidelity is not close. Fidelity is one of the more well-rounded brokerage firms out there, and it can be a good fit for retail investors and traders of all experience levels. Buy-and-hold investors will likely find all the tools they need within the web platform while more active investors and traders can use Active Trader Pro, which offers more bells and whistles—and more customization options. 

While Robinhood could be the place to get you accustomed to investing, there are other zero-fee brokers with more resources that are worth serious consideration. If you’re an active investor or trader, there are much better options on the market as Robinhood does not support robust charts, screeners, tools and so on. Investors should also consider the lack of transparency around payment for order flow and other issues when making a decision to use Robinhood as an online trading platform. In this match up, Fidelity has a far better overall offering than Robinhood.