Competition among robo-advisors is fierce and it only got tougher when the largest U.S. retirement provider, Fidelity Investments, entered the fray with its “Go” offering.
In this Fidelity Go review, we’ll see how it compares to other top robo-advisors on fees, investment minimums, tax strategy, and investment approach.
As you will see, Fidelity shines brightest on cost and fee transparency. It also offers extensive research capability powered by Fidelity Investments.
Investors who are hesitant to trust their money entirely to computer algorithms that manage their money should will be comforted to know that a team of investment experts oversee client portfolio selections.
The real question is should you sign up to Fidelity Go? Let’s find out!
Table of Contents
- Fidelity Go Review
- Fidelity Fee Transparency Is Refreshing!
- Fidelity Go Fees
- Is Fidelity Go Right For You?
- Fidelity Go Investment Method
- Financial Planning Tools
- Fidelity Go Tax Strategy
- Fidelity Go Pros and Cons
- Fidelity Go Investment Minimums
- Fidelity Go Account Types
- Fidelity Go Tax Strategy
- Fidelity Go Review Summary
Fidelity Go Review
4 out of 5 stars
via Fidelity secure site
Fidelity Fee Transparency Is Refreshing!
Most financial advisors advertise management fees to clients who often don’t realize that the total fees they pay are higher.
Total fees include both management fees and expense ratios, which are costs incurred at the fund level and passed on to investors by financial advisors – human and robot alike.
Instead of spotlighting management fees, it emphasizes total fees.
A closer examination highlights that Fidelity Go actually stands toe-to-toe with its low-cost rivals. The “confusion” stems from Fidelity Go bundling all fees under one easy-to-understand umbrella.
Among financial advisors, this is groundbreaking and wholly refreshing. We award Fidelity Go 5-stars for fee transparency and keeping costs low.
Fidelity Go Fees
Depending on whether clients sign up for taxable or retirement accounts, Fidelity Go fees vary ever so slightly.
- 0.35% inclusive of investment expenses on retirement accounts
- 0.40% inclusive of investment expenses on taxable accounts
Most robo-advisors pass on investment expenses to clients but because Fidelity client portfolios feature primarily its own Fidelity Flex funds, the expenses can be waived – a luxury most other robo-advisors don’t enjoy.
Is Fidelity Go Right For You?
Fidelity Go is best for fee-savvy investors who don’t want the headache or hassle of actively monitoring their own portfolios yet still want the benefit of human oversight over their portfolios.
Investors who are attracted to the robo-advisor model of low-fees but still have some concerns about a robot making all the decisions will find Fidelity Go’s model a rarity in the robo-advisor world.
A team of experts from Geode Capital Management, an institutional investment advisor, monitors portfolios and rebalances them as warranted.
Fidelity Go makes arguably the most compelling case to fee-conscious investors to earn their business.
Retirement accounts incur fees of just 0.35% and taxable accounts are charged management fees of 0.40%, both inclusive of investment expenses.
The Fidelity Go website offers a somewhat convoluted explanation of how it arrives at those fees but the short version is a variable fee credit relating to the revenue it earns from funds are credited back to clients.
Fidelity Go is best for:
- Fee-conscious investors
- Fidelity customers
- Hands-off investors
- Investors seeking human oversight beyond what a pure robo-advisor can do
Fidelity Go Investment Method
Day-to-day investment and trading decisions are handled by Geode Capital Management, an unaffiliated investment advisor, founded in 2001, that Fidelity has partnered with since 2003.
Accounts typically hold a combination of exchange-traded funds and mutual funds depending on the investment strategy a client selects. Funds chosen generally hold domestic and foreign stocks, bonds, and short-term investments.
As a client, it’s not permitted to buy and sell investments in your Fidelity Go account however it is permissible to impose restrictions on how the portfolio is managed. Clients are able to change the investment strategy at any time to any suitable options based on user profile.
Fidelity Go gets high marks for including not just its own funds but including iShares ETFs from Blackrock too; research from Morningstar shows that 81% of Blackrock core exchange-traded funds have outperformed mutual funds.
Tax-advantaged municipal bond funds are employed in taxable accounts also to minimize the impact of taxes.
Financial Planning Tools
Clients can set goals, track them to monitor progress, and evaluate Fidelity Go performance returns over time.
Fidelity Investments customers will find Fidelity Go seamlessly integrates to their existing platform login area, and makes for easy viewing of all brokerage accounts.
Financial planning tools are robust and benefit from the extensive resources at Fidelity Investments. The simplicity begins during the sign up process where Fidelity Go will recommend a portfolio and email it for later consideration.
Fidelity Investments clients will find Fidelity Go seamlessly links to an existing brokerage account, and is visible side by side.
Surprisingly, portfolio value over time is not available still at some brokerage firms but at Fidelity Go that’s not an issue; Fidelity Go returns along with the current balance, allocation, holdings and status relative to goals are all presented in a polished, clean, easy-to-navigate interface.
Fidelity Go Tax Strategy
Where Fidelity Go falls short is its lack of tax strategies.
If we compare Fidelity Go vs Betterment, we can see how stark the difference is. Betterment offers tax-loss harvesting on taxable account to keep more money in your pocket and less in Uncle Sam’s!
Tax-loss harvesting is a process of selling losing positions to offset realized gains from winners and replacing those losers to ensure portfolios remain diversified.
Betterment tax coordinated portfolios is another strategy that aims to optimize tax implications across taxable and retirement accounts. Tax-efficient assets are placed in taxable accounts while tax inefficient assets are placed in tax-advantaged retirement accounts.
Another shortfall is the lack of in-kind transfers at Fidelity. You can only open an account with cash which means if you sell positions elsewhere, you could be liable for a hefty tax bill at the end of the year.
Fidelity Go Pros and Cons
Fidelity Go shines with low fees, human management, extensive research and low minimums. Drawbacks related to tax-optimization: no in-kind transfers and no tax-loss harvesting tools.
|Fidelity Go Pros||Fidelity Go Cons|
|✅ Low Fees: It’s not fair to say that Fidelity Go wins hands down on fees. But Fidelity Go combines human portfolio management with a technology-powered solution at fee levels that are virtually unmatched, particularly when considering that investment expenses are included.||❌ No In-Kind Transfers: When setting up a new account at Fidelity Go, all portfolio positions elsewhere must first be encashed, which has the potential to create large tax liabilities. Only cash transfers are permitted which should be carefully evaluated before proceeding.|
|✅ Low Investment Minimum: Fidelity Go has a low hurdle of just $10 which compares well to the best robo-advisors.||❌ No Tax-Loss Harvesting: Unlike many other robo-advisory firms, Fidelity Go does not offer a tax-loss harvesting strategy to minimize the impact of taxes.|
|✅ Portfolio Management by Investment Experts: Human management of portfolios distinguishes Fidelity Go from most purely technology-powered robo-advisors.|
|✅ Extensive Research: Easy integration with Fidelity Investments means that Fidelity Go customers are able to easily access extensive research from Fidelity Investments.|
|✅ Financial Planning Tools: Goal-based financial planning tools that allow users track wealth status relative to financial goals are clear and allow for easy monitoring.|
Fidelity Go Investment Minimums
Low fees that include investment expenses are a standout feature among robo-advisory firms. Fidelity Go’s low account minimum of $10 and absence of nickel-and-diming annual, transfer and closing fees further vouch for its status as a low cost leader.
|Account Management Fees|
(inclusive of investment expenses)
|0.35% for retirement account|
0.40% for taxable accounts
|Investment Expense Ratio||FREE|
(conducted by portfolio managers,
|Annual, Transfer, Closing Fees||None|
Fidelity Go Account Types
Fidelity Go supports all types of IRA account as well as standard taxable accounts, both individual and joint. 401(k) and 529 Plans are not supported at this time.
Fidelity Go Tax Strategy
A drawback of Fidelity Go’s robo-advisory offering is the lack of an automated tax-loss harvesting strategy.
|Tax Loss Harvesting||NO|
Fidelity Go Review Summary
Fee-conscious investors savvy enough to spot that Fidelity Go bucks the trend of most robo-advisors and includes, as opposed to passes on to clients, investment expenses, will be especially pleased that the management fees are so low.
Customers at both Fidelity Investments and Fidelity Go will also be thrilled to discover that the bells and whistles available at Fidelity Investments, such as extensive research and financial planning tools, are available on the Fidelity Go platform and easily viewable.
For investors who value tax strategy optimization, Fidelity Go leaves much to be desired but it remains to be seen whether human management of portfolio selections versus a purely technology-powered robo-advisory approach leads to outperformance.