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If you’re looking for a low-cost robo-advisor with a combination of computer and human interaction, look no further than Fidelity Go.
You can open an account with no money, but need at least $10 to invest. This is down from its original $5,000 minimum 2 years ago, so Fidelity Go is trying to lure in the younger and beginning investors. Should you consider it?
Check out my review below.
What is Fidelity Go?
Fidelity Go is Fidelity’s version of a robo-advisor. It works differently than the robo-advisors you’re used to, though. For starters, it’s free for investors with less than $10,000 invested. Fidelity Go builds your portfolio with the help of its algorithm and human advisors – not something you normally see with robo-advisors which are usually all technologically driven.
Fidelity Go handles your account’s rebalancing on an as-needed basis, rather than a predetermined schedule, like most robo-advisors.
Again, Fidelity gives the human touch by having human advisors handle the rebalancing, not a computer. If your account falls too far from its intended goal, advisors get it back on track by reallocating your investments.
If you already have a Fidelity retail account, you can also use Fidelity Go and integrate both accounts. 401K clients can’t manage their 401K with Fidelity Go, but anyone can roll over an existing (old) 401K to it.
Something I love is the access to Fidelity’s rich financial tools. Everyone knows Fidelity for its rich education and support of its clients and all Fidelity Go clients get the same treatment.
While anyone could benefit from Fidelity Go, investors looking for a hands-off approach with a simple goal in mind that wants a little human oversight do the best with this robo-advisor.
How does it work?
Opening an account is easy. You start by answering a handful of questions. Fidelity uses this information to create the perfect portfolio based on your goals and risk tolerance.
You can even see what portfolio Fidelity would recommend for you without signing up or providing any personal information. This gives you time to think without the pressure of having your money sitting idle.
You don’t need a minimum balance to open a Fidelity account, so you can start with nothing, but obviously, to invest you’ll need money. Fidelity requires you to invest in $10 increments.
Deposit and withdrawal
Fund your account easily with the ‘Add Money’ button on your dashboard. You may add an external bank account or a Fidelity account. You may also transfer securities from both a Fidelity and non-Fidelity account. If you transfer securities, Fidelity will settle (sell) the securities and use the cash to purchase the assets in your designated portfolio.
You may also deposit a check into your Fidelity account. You can deposit it via the Fidelity mobile app or mail the check in to Fidelity. Just make sure you note your account number on the check.
Withdrawals are just as easy with Fidelity Go. You must leave a balance of at least $10 in your account, but all other available cash is accessible. If you don’t have the cash available, Fidelity will settle the appropriate securities, which may take up to 10 days.
Geared towards millennials, this broker offers a simple user interface that allows one goal and helps new investors get the hang of investing without giving up their profits to exorbitant fees.
Fidelity Go has a mobile app and a desktop program. It was built on the mobile app, though, so expect the most responsiveness there, which is why it’s great for millennials. The desktop version is Fidelity’s main program.
There isn’t a separate Fidelity Go desktop program, so it does get a little confusing, especially if you have more than one goal, which means you have more than one Fidelity Go account. Fidelity doesn’t limit the number of accounts, but I recommend that you rename each of your accounts according to its specified goal to avoid confusion.
Fidelity Go offers both individual and joint accounts as:
- Taxable accounts
- IRA accounts
- Roth IRA accounts
- Rollover IRA accounts
What can you trade?
Most Fidelity Go portfolios have Fidelity Flex mutual funds. In the mutual funds, you’ll find your standard stocks (both domestic and foreign), bonds, and other short-term investments. The nice thing is the lack of expense ratios or management fees.
Here’s where Fidelity Go really shines. If you have a balance lower than $10,000, there’s no fee. This is new to Fidelity since the spring of 2018. If you have a balance higher than $10,000 but less than $49,999, the fee is $3 per month or $36 per year. If you have more than $49,999 invested, the fee is 0.35 percent per year.
Fidelity Go has no hidden fees, account closing fees, transaction fees, or any other fees which make it great for new investors.
- Cash account
You can have a cash balance, and Fidelity pays an interest rate of less than 1 percent on balances less than $100,000.
- Are there human advisers that can help you out?
This seems a little deceiving. While human advisors oversee your account and even rebalance it, there aren’t advisors for you to talk to for financial advice. You may call customer service for general questions, but not specific financial advice.
- Customer service
Fidelity go offers 24/7 phone support, which is great for those that love to obsess about their finances late at night. They also offer online chat from 8 AM to 6 PM ET Monday through Friday.
It’s hard to find better educational materials anywhere else. Fidelity Go clients have access to all of Fidelity’s robust educational materials. You don’t have to limit yourself to the few resources offered on Fidelity Go’s website – you have access to all educational materials including videos and classes on Fidelity.
Fidelity also has an app called Fidelity Spire. Meant for young investors, this app helps you set goals and meet them. Whether you choose to invest the money yourself or use Fidelity go, Fidelity Spire guides you through the process.
Screenshots / Tutorial
Upon answering a series of questions such as your age, income etc… an investment strategy will be designed:
Fidelity Go Pros and Cons
Is Fidelity Go good for beginners?
You’d be hard-pressed to find a better robo-advisor for beginners. From the $0 management fee until you have $10,000 of assets under management to the human advisors handling your account and the numerous educational materials, beginners learn a lot and meet their goals with Fidelity Go.
What happens if my balance falls below $10?
You may open a Fidelity Go account with no money, but to invest you need at least $10. Once you start investing (which you must do within 6 months of opening an account or they cancel it), you need to keep a $10 balance. If you withdraw funds leaving your balance lower than $10, they’ll ask you to add more funds. If your account falls below $10 due to market performance, they won’t ask you to fund your account.
Does Fidelity charge a fee to close my account?
You can cancel your account at any time and withdraw your funds. There isn’t a fee from Fidelity; however, if you have an IRA, you may pay an IRS 10 percent penalty plus taxes unless you rollover your IRA into another qualified IRA.
How do I pay my Fidelity Go fees?
Fidelity automatically withdraws your fees from your account quarterly. They determine your fees in arrears, charging you the appropriate management fee based on your account balance over the last three months. You won’t receive a bill and you will see the deduction on your account statement.
How many accounts can you open?
Fidelity Go doesn’t limit the number of accounts you open at one time. You may fund as many accounts as you wish, if you have more than one goal. Keep in mind, you must fund and use the account within 6 months of setting it up or they will cancel your account.
Can I change my risk tolerance or goals?
Yes, Fidelity Go allows you to make changes to your account at any time. You can’t choose your individual investments, but you can change the answers to your questions which may change your risk tolerance and portfolio allocations.
What is the fee to close a Fidelity Go account?
Fidelity Go is transparent with their fees. They do not charge any account fees including an account closing fee. Your only fees are the disclosed management fees based on the amount you invested.
How does Fidelity Go make money?
Fidelity makes money in various ways. Fidelity Go is just a subsidiary of Fidelity’s main offerings. Plus, Fidelity makes money on the interest earned on any assets under management. Cash balances earn a meager interest rate from Fidelity, which means they earn the difference themselves making up for the lack of management fees for clients with less than $10,000 invested.
Fidelity Go vs Schwab Intelligent Portfolios
Schwab Intelligent Portfolios is for advanced investors with at least $5,000 to invest (that’s the minimum required). Schwab doesn’t charge a management fee for any account, but they hold a large amount of your portfolio as a cash balance.
Unlike Fidelity, there are expense ratios, which average 0.14 percent and Schwab charges $50 to close out your account. Schwab invests in 20 different assets classes and around 53 different ETFs.
Fidelity Go vs Wealthfront
Wealthfront is another robo great for beginners with at least $500 to invest.
It’s a hands-off robo-advisor that invests in ETFs across 11 asset classes. Wealthfront offers access to a 529 college savings plan in addition to the standard taxable and retirement accounts. They offer tax-loss harvesting on all accounts and charge 0.25 percent of assets under management. You don’t have access to human advisors but rebalancing is automatic, giving beginning investors a completely a hands-off approach.
Fidelity Go vs Acorns
Acorns is for the beginning investor with little to no money to invest. They have an interesting concept which allows you to invest your spare change by rounding up your purchases in your linked bank account. Once you accumulate $5, Acorns invests your money. Investors pay between $1 – $5 per month depending on the amount invested and has average expense ratios between 0.03 percent and 0.18 percent. Acorns invests across 5 asset classes and there are no human advisors either.
Fidelity Go vs Betterment
Betterment is for the goals-oriented investor. Its basic program (Digital) has no minimum balance requirement with a 0.25 percent of assets under management cost. Betterment offers fractional investments, which means you don’t have a lot of cash drag and can invest most of your money. Betterment is great for investors just starting out with big goals but with little money to invest right off the bat.
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Worth It or a Scam?
Fidelity Go is one of the most secure robo-advisors available today. Since its parent company is Fidelity, investors looking for a solid company with a reputable history, it doesn’t get much better. They use 128-bit security and two-way data encryption. The mobile app uses two-factor authentication.
Since Fidelity Go has the ‘Fidelity’ name, many beginning investors feel good about their decision to invest. Even though there are plenty of other reputable advisors out there, Fidelity Go has a solid reputation.
Is Fidelity Go the right choice for you? It depends on what you’re looking for. If you plan to sell securities often and rely on tax loss harvesting, you won’t find it here, which could mean a lot of lost earnings.
However, if you rely on big names and feel better about investing your money with Fidelity, you can’t go wrong with Fidelity Go. With its affordable management prices, no expense ratios, and attractive investments, investors of all walks of life do well with it, just make sure you know what you are and aren’t getting before you start.
Michael is a senior writer at The Robo Investor. He earned his master’s at the Craig Newmark School of Journalism at CUNY, and is currently taking CFP courses at the University of Scranton. He has been an avid finance enthusiast ever since he started investing at the age of 23. Meet the Team