So I opened up a Fido account last week to explore their offerings / experience. The internet is awash with Schwab-v-Fido comparisons, reviews, groupies, and detractors, but nothing beats first-hand due diligence and impressions, obviously.
From what I can tell thus far:
Cash management seems much nicer/efficient than Schwab, since they auto-sell MMFs to cover purchases and sweep into MMFs versus a pissant-paying bank account. (Which I knew anyway)
FI prices seem somewhat more competitive - I notice a few points difference between Schwab and Fido when scanning for treasuries and corporates, which presumably is another way Schwab eekes a few more bucks out of people.
Schwab doesn't let me reinvest foreign (Canada) dividends, but I understand that Fido doesn't reinvest preferred dividends.
'Active Trader Pro' blows battleship-sized chunks compared to ThinkorSwim. Seems trapped in 1999 and is downright ugly, too.
Research on Schwab is far better - access to a bunch of quant sources and full M* reports. Fido just offers a few newsfeeds like Benzinga.
I've had some data problems on Schwab recently. For over a month, a preferred stock position does not show up on the income projections screen and the data never updates, despite it being a liquid stock.
... while I'm not sure 'the grass is always greener' I'm inclined to stay put at Schwab since both seem generally okay ... but I'm still poking around Fido for curiosity's sake just in case Blue's service/experience ever really goes south. *shrug*
Comments
Thanks for your review.
p.s. 'Active Trader Pro' truly does suck! Massively! Especially on a Mac.
A bit hard to spot, but with your account positions displayed, there is a link at the top called “more”. Clicking that pulls up their portfolio analyzer. Decent, ISTM, but not great. It bugs me every time about having “a portfolio concentration” (5% in NSRGY) which it seems to feel is in some way bad. And without any concentration it says “Great job.” … Am I to sell some NSRGY just to receive their “Great job” accolade? I think not.
I’m confident that if @Stillers or @FD1000 used their analyzer both would receive a “Great Great Great Job” response.
Several years ago when I had accounts at both brokerages I compared bond prices and came to the same conclusion that Fidelity was slightly better. Curiously, the full service broker I used for munis was finding bonds for me at prices that essentially matched Fidelity's.
Regarding Fidelity cash management - it will shortly be adding SPAXX (current SEC yield is 4.97%) as a core account option to its CMA account. Currently you're limited to a bank sweep paying 2.69% APR (2.72% APY).
Regarding trading equities and ETFs: Schwab receives payment for order flow. Fidelity does not. (It does receive PFOF on options.) You can search for newer figures, but in 2021 "Order flow revenue made up approximately ten percent of [Schwab's] total revenue."
https://www.aboutschwab.com/story/schwab-statement-on-payment-for-order-flow
https://brokerchooser.com/education/news/data-dashboard/payment-for-order-flow
Duh. I didn’t realize that. I just figured the Cash Management account paid normal money market rates (around 5%.) If what @msf said is true (I believe so) I’ve been duped because I typically keep well north of 10K in the CMA. It comes in as an automatic monthly transfer from my local bank and serves budgeting needs.
Thanks @msf for the timely links. I’ll wait until june 15 and take advantage of the new SPAXX option. Better late than never I suppose.
It pays to read everything @msf posts. He must eat, breathe and sleep investing! (Even better than AI)
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Any juice for the NBA Championship tip-off ?
In a taxable Fidelity Account, one may use SPAXX or FZFXX as a core account, or let Fidelity hold your cash on its books as a general liability (i.e. you're lumped in with all its other creditors) in something called FCASH. But one does not have a bank sweep option. (It does have cash management features like bill pay.)
In a retirement Fidelity Account, one may use SPAXX or a bank sweep paying 2.72% APY.
See the second FAQ for this information.
https://www.fidelity.com/trading/faqs-about-account
A CMA account is slightly different.
https://www.fidelity.com/spend-save/fidelity-cash-management-account/overview
It offers only a bank sweep as a core account. But it also provides rebates on all ATM surcharges, worldwide. (I just got a 3,90€ surcharge rebated.) To get rebates on ATM withdrawals from a Fidelity Account you need to be a Premium, Private Client, or Wealth Management (advised) customer, or have some other more obscure relationship with Fidelity.
See fn 2 here.
The ATM withdrawal reimbursement feature seems to be the main reason to have a CMA account. Schwab provides something similar for its bank's checking account. AFAIK, Schwab offers cash management services only through its bank. OTOH, Fidelity has no "real" bank; it uses UMB Bank as a proxy.
dI remember when my Fido retirement accounts used SPAXX. Than that changed a year ago to “money market.” I didn’t realize there was a difference. Duh. Please advise what step I need to take in order to change my settings so that SPAXX serves as the sweep account for my retirement accounts.As noted elsewhere, I’ve bumped the retirement cash up as I prepare for significant need for cash / distribution late summer. Rather pissed at Fido.
https://www.fidelity.com/trading/faqs-about-account#faq_about2
Fidelity taxable MMFs.
As noted elsewhere, I’ve bumped the retirement cash up to 15+% as I prepare for significant need for cash late summer. Rather pissed at Fido.
If you've got at least $10K in cash in your IRA, you can open up a position in FZDXX ($10K min for retirement accounts). It's currently paying 5.15%. Fidelity officially requires one to maintain at least $10K in the fund, but generally it is quite forgiving so long as you don't bring the balance down to zero.
This is not a core fund, so any time you have cash in the IRA (e.g. non-reinvested divs), you'll have to move it to FDRXX yourself or the cash will sit in your "Cash, Held in Money Market" fund.
To answer the original question: click on the cash link as described above. You may see a "Change Core Position" button if other options are available.
Good news. I followed Yogi’s directions and stumbled upon the Fido settings for cash positions. When I clicked on “cash” in my portfolio overview it pulled up the current setting as SPAXX.
FWIW - My nominal IRA cash weighting (including PRIHX) is 10%. So at 15.5% today there is an excess amount equal to around 5.5% that is earmarked for some needs later this summer.
I am rewarded nearly every time I log in to this great board!
>> Currently you're limited to a bank sweep paying 2.69% APR
? When I sell something in my Fido account the proceeds go automatically into FDRXX, 4.99%. Has been the case for a long time. Maybe I am missing something.
A Fidelity CMA account is different from a Fidelity brokerage account.
What you have is a "Fidelity brokerage account, not a CMA account. If you are receiving reimbursements for ATM withdrawals, that is because you are classified as a Premium or above customer.
Here's a Reddit thread with a complete explanation from Fidelity.
https://www.reddit.com/r/fidelityinvestments/comments/16cltzc/confused_about_the_different_types_of_fidelity/
points out one of the redditors at that site. Appears quite so; I am having trouble finding meaningful limitations. If you can manually buy (from your sweep) one of their 5% money funds, looks like a complete winner.
Schwab trade ticket was not a prize either until they acquired TD and copied TD's. I am hoping and Schwab Reps claim they are trying furiously to copy best practices from TD. For our sake, let us hope they are sincere.
In your Fidelity brokerage account, "When [you] sell something in [your] Fido account the proceeds go automatically into FDRXX."
I was speaking of having a CMA. Is it the case that within a CMA one can buy a Fidelity mm fund? If so, are there are any important drawbacks to the CMA? I am finding none but the "lower returns" complaint, solvable istm by being able to buy Fidelity mm funds. (I did read about no crypto etc.)
Fidelity envisioned the CMA and brokerage accounts as being complementary. Personally, I use two brokerage accounts that way. One holds MMFs, "near cash" funds (with divs going into the core account to avoid potential wash sale issues), and T-bills. The other holds my taxable investments. The former is configured as a cash account, the latter has margin enabled.
And more important, apart from margin and crypto, why have a brokerage account?
I don't know - you didn't define "meaningful". All I can do is keep adding to a list of differences and see if you consider any of them meaningful.
Some people consider added inconveniences to be meaningful differences. They find it meaningful that at Schwab one must take explicit actions to get similar cash rates to what Fidelity provides automatically. Worded somewhat differently, this was the OP's first differentiator between the two houses.
And more important, apart from margin and crypto, why have a brokerage account?
Convenience. For mutual funds, one doesn't need a brokerage account. For cash management, one doesn't need a brokerage account. For Treasuries, one doesn't need a brokerage account. For gold, buy gold, build your own vault.
Like teaching
Can one buy 5% Fidelity money market funds within a CMA?
y/n
I addressed the second question, which was predicated on the answer to the first being affirmative. Yes, one can buy a Fidelity mm fund within a CMA. It would be rather odd if one could buy securities except for house funds. (Though as I recall, that was an original restriction on Vanguard's brokerage - odd indeed.)
whew
tnx
A !
1. MM is a small problem. I sell a fund and buy a MM and Schwab pays more.
2. Schwab pays the monthly distribution on the same day while Fidelity is late by 1-2 days.
3. Schwab online is more intuitive.
4. Here come the biggest advantage for Schwab. I trade only mutual funds and preferably Inst shares. Schwab waves the $49.95 fee while at Fidelity I hardly ever got that. 4 switches annually for 5 accounts is a $1000.
5. This is the most annoying at Fidelity. My trade goes like this. I sell all the shares and buy the new position on the same day and most of the money is in IRA. I trade bond fund.
Suppose I sold PIMIX worth 1 million. Fidelity would not allow you to buy another fund online, you must call a rep. They would only allow you to buy 90%=$900K, even if you sold a bond fund. Sometimes I have to argue with rookie reps who say you can't do it.
The above means that in 20 trades if I miss just 0.1% or more equals to another $1-3K annually.
At Schwab I sell one fund at 1 Mill and buy another at $995 online, no rep or wasting time is needed because these funds hardly move.
5. Schwab is a real bank, Fidelity isn't.
6. Schwab will match any cash rewards on bringing in money, even on smaller amounts Fidelity doesn't, all you do ask your branch rep.
7. I get constant calls from Fidelity reps to "help" me which I don
need, I never got a call from Schwab.
8. Schwab has more new funds I like. I also brought 2 funds I like into Schwab by calling in, could never do it at Fidelity.
9. I have a Fidelity account over 25 years and Schwab over 20 years.
10. In the last several years Schwab rep knowledge went down a bit, Fidelity much more.
Some great discussion here! I thought my comments would've just been another thimbleful in the maelstrom here, i had no idea it would take off as it has. Interesting points are being made in this thread, which I appreciate.
The reason I ask is that the advantage Fidelity has had is that they only charge $49.95 to buy TF-funds but also they charge nothing to sell them. One can also buy certain institutional fund shares w/o paying the usually required 6&7 figure minimums.
I'm not a Schwab customer so please explain. TY.
Edited to correct inaccurate fee numbers.
Schwab NTF has the highest platform fees.
Then, Schwab TF has 2 tiers - those who pay some platform fee and Schwab charges $49.99 for their funds, and those that pay zilch and Schwab charges $74.95 for their funds.
https://www.schwab.com/mutual-funds/costs-fees