What Exactly Does Fidelity Do

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Have you ever wondered about the powerful financial entity known as Fidelity? Perhaps you've seen their advertisements, heard their name in financial news, or even have an account with them. But what exactly do they do? It's a question that many people ponder, and the answer is far more comprehensive than a simple one-liner.

Fidelity Investments is a multinational financial services corporation based in Boston, Massachusetts. Established in 1946, it has grown to become one of the largest and most influential asset managers in the world. In essence, Fidelity helps individuals and institutions manage their money, invest for the future, and achieve their financial goals. They do this through a vast array of products and services, acting as a one-stop shop for many different financial needs.

Let's dive deeper into the world of Fidelity and explore their core functions step-by-step.


Step 1: Let's Unlock Your Financial Potential Together!

Are you ready to take control of your financial future? Excellent! Because understanding Fidelity's offerings is the first crucial step in leveraging their expertise for your own benefit. Think of Fidelity as a comprehensive financial partner, offering solutions for every stage of your financial journey, from your first savings account to retirement planning and beyond.

Step 2: Investment Management: The Core of Fidelity's Business

At its heart, Fidelity is an investment powerhouse. They manage trillions of dollars in assets for millions of clients worldwide. This involves a sophisticated process of research, analysis, and strategic allocation of funds to various investment vehicles.

2.1: Mutual Funds: A Cornerstone Offering

  • What they are: Mutual funds are professionally managed portfolios of stocks, bonds, or other securities. When you invest in a mutual fund, you're pooling your money with other investors, and a fund manager makes investment decisions on behalf of the group.

  • Fidelity's Role: Fidelity is renowned for its extensive lineup of mutual funds, covering almost every conceivable investment objective and risk tolerance. From actively managed funds seeking to outperform the market to passively managed index funds that track specific market benchmarks, Fidelity offers a solution for nearly every investor. They employ teams of skilled portfolio managers and analysts who conduct in-depth research to identify promising investment opportunities.

  • Examples of Fidelity's popular mutual funds include: Fidelity Contrafund (FCNTX), Fidelity 500 Index Fund (FXAIX), and Fidelity Total Bond Fund (FTBFX).

2.2: Exchange-Traded Funds (ETFs): A Growing Trend

  • What they are: Similar to mutual funds, ETFs are collections of investments, but they trade on stock exchanges like individual stocks. This offers greater flexibility and intraday trading capabilities.

  • Fidelity's Role: Fidelity has a strong and expanding presence in the ETF market, offering its own branded ETFs and allowing clients to trade a wide variety of ETFs from other providers. They recognize the growing popularity of ETFs due to their low expense ratios and tax efficiency.

2.3: Individual Stocks and Bonds: Direct Investment Opportunities

  • What they are: For investors who prefer to pick individual securities, Fidelity provides the platforms and tools to do so. This involves buying and selling shares of individual companies (stocks) or lending money to governments or corporations (bonds).

  • Fidelity's Role: Fidelity offers robust trading platforms with competitive commission structures, extensive research tools, and real-time market data. Their platforms are designed to cater to both novice and experienced traders, providing resources like equity research reports, analyst ratings, and customizable watchlists.

Step 3: Brokerage Services: Empowering Your Trading Journey

Beyond managing funds, Fidelity provides comprehensive brokerage services, enabling individuals to execute their own investment decisions.

3.1: Online Brokerage Accounts: Your Gateway to Investing

  • What they are: These are accounts that allow you to buy and sell investments online.

  • Fidelity's Role: Fidelity offers various types of brokerage accounts, including individual taxable accounts, joint accounts, and custodial accounts (for minors). They are known for their user-friendly online interface and mobile app, making it easy for clients to place trades, monitor their portfolios, and access account information from anywhere.

3.2: Retirement Accounts: Securing Your Future

  • What they are: Specialized accounts designed to help individuals save and invest for retirement, often with tax advantages.

  • Fidelity's Role: Fidelity is a leading provider of retirement accounts such as:

    • Individual Retirement Accounts (IRAs): Both traditional and Roth IRAs, offering different tax benefits. Fidelity guides clients through the complexities of IRA contributions and distributions.

    • 401(k) and 403(b) Plans: Fidelity often acts as the record keeper and investment provider for employer-sponsored retirement plans. They help employees enroll in these plans, choose investments, and manage their retirement savings.

    • SEP IRAs and SIMPLE IRAs: For self-employed individuals and small businesses.

3.3: Education Savings Accounts: Investing in the Next Generation

  • What they are: Accounts specifically designed to save for educational expenses, often with tax benefits.

  • Fidelity's Role: Fidelity offers 529 plans, which are popular college savings plans. They provide a variety of investment options within these plans, catering to different risk appetites and time horizons.

Step 4: Financial Planning and Advice: Guiding Your Path

While investment products are key, Fidelity also understands that many individuals need personalized guidance to navigate their financial lives.

4.1: Robo-Advisors: Automated Investment Management

  • What they are: Digital platforms that use algorithms to create and manage diversified investment portfolios based on your financial goals and risk tolerance.

  • Fidelity's Role: Fidelity offers its own robo-advisor service, Fidelity Go. This is ideal for investors who want professional management without the higher costs of a traditional financial advisor. Fidelity Go automates portfolio rebalancing and tax-loss harvesting.

4.2: Human Financial Advisors: Personalized Guidance

  • What they are: Certified professionals who provide one-on-one financial advice tailored to your specific situation.

  • Fidelity's Role: Fidelity provides access to a network of financial advisors who can assist with comprehensive financial planning, including retirement planning, estate planning, tax strategies, and more. They offer both in-person and virtual consultations, ensuring accessibility for a wide range of clients.

4.3: Educational Resources and Tools: Empowering Informed Decisions

  • What they are: Articles, webinars, calculators, and other resources designed to help investors learn about personal finance and investing.

  • Fidelity's Role: Fidelity is renowned for its extensive library of educational content. Their website is a treasure trove of articles, videos, and interactive tools that cover everything from basic investing concepts to advanced strategies. This commitment to financial literacy empowers clients to make informed decisions.

Step 5: Wealth Management: Comprehensive Solutions for High-Net-Worth Individuals

For individuals with significant assets, Fidelity offers specialized wealth management services.

5.1: Private Wealth Management: Tailored Strategies

  • What they are: Highly personalized financial services for high-net-worth and ultra-high-net-worth individuals and families.

  • Fidelity's Role: Fidelity's private wealth management division provides bespoke solutions, including advanced estate planning, philanthropic advising, trust services, and specialized investment strategies. They work closely with clients to develop comprehensive financial plans that address complex financial needs.

5.2: Institutional Services: Partnering with Organizations

  • What they are: Services provided to corporations, non-profits, and other institutions.

  • Fidelity's Role: Fidelity offers a range of services to institutional clients, including pension management, defined contribution plan services, and outsourced investment management. They help organizations manage their employee benefits, endowments, and other large pools of capital.


In essence, Fidelity operates as a multifaceted financial institution that aims to meet the diverse needs of individuals and organizations seeking to grow, manage, and protect their wealth. From offering a vast selection of investment products to providing personalized financial advice and sophisticated wealth management solutions, Fidelity strives to be a trusted partner in its clients' financial journeys.


10 Related FAQ Questions

How to open an account with Fidelity?

You can open an account online through Fidelity's website, which typically involves filling out an application, providing personal identification, and linking a bank account for funding.

How to transfer money to Fidelity?

You can transfer money to Fidelity via electronic funds transfer (EFT) from your bank account, wire transfer, check deposit, or by rolling over funds from another retirement account.

How to buy stocks on Fidelity?

Once your account is funded, you can buy stocks on Fidelity by navigating to the "Trade" section on their website or mobile app, searching for the stock's ticker symbol, entering the quantity, and placing your order.

How to sell mutual funds on Fidelity?

To sell mutual funds on Fidelity, log into your account, go to your portfolio, select the mutual fund you wish to sell, choose the "Sell" option, and follow the prompts to specify the amount.

How to set up a Roth IRA with Fidelity?

You can set up a Roth IRA with Fidelity by selecting the "Open an Account" option on their website, choosing "IRA," and then specifying "Roth IRA" during the application process.

How to find a financial advisor at Fidelity?

You can find a financial advisor at Fidelity by visiting the "Financial Planning & Advice" section of their website, where you can search for advisors based on your location and specific needs.

How to enroll in a 401(k) plan managed by Fidelity?

If your employer's 401(k) plan is managed by Fidelity, you will typically receive enrollment instructions from your employer. You can then log into the Fidelity NetBenefits portal to set up your contributions and choose your investments.

How to access Fidelity's research tools?

Fidelity's research tools are accessible through their website and mobile app after logging in. Look for sections like "Research," "Quotes & Research," or specific asset class tabs (e.g., "Stocks," "Mutual Funds").

How to contact Fidelity customer service?

You can contact Fidelity customer service by phone (their numbers are available on their website), through secure message in your online account, or by visiting a local Fidelity investor center.

How to learn about investing with Fidelity?

Fidelity provides extensive educational resources on its website under sections like "Learning Center," "Insights," or "Education." These include articles, videos, webinars, and online courses covering various investing topics.

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