Which automated portfolio is right for you?


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Fidelity vs. Charles Schwab Automated Investing: The Biggest Differences

Fidelity and Charles Schwab each offer two different automated investment accounts for hands-off investors. Each brokerage allows you to invest through vehicles such as individual brokerage accounts, joint accounts, and IRAs, but fees, investment choices, and features vary by platform.

Fidelity is the best choice for investors looking for lower cost securities. It uses Fidelity Flex mutual funds for its two automated accounts, and all of these funds are free of expense ratios (which means you’ll only have to worry about the advisory fees).

However, Schwab is the best option for a low advisory fee and availability of the account type. Its standard automated investment account has no advisory fees, and the brokerage’s managed portfolios are compatible with multiple types of accounts.

Fidelity and Schwab fees and features also vary.

Are Fidelity Automated Accounts Right For You?

Fidelity offers two different automated accounts: Fidelity Go and Fidelity Personal Planning and Advice. Both accounts better serve unsolicited investors who want their investments managed for them, but Fidelity Personalized Planning & Advice is a better option if you are looking for both automated portfolio management and the assistance of a human advisor.

If you are only looking for low cost automated portfolio management, Fidelity Go is the best choice. The account has a minimum requirement of $ 0 (although you need at least $ 10 to invest) and it invests your money in a combination of Fidelity Flex mutual funds that contain national stocks, bonds, stocks. foreign and other investments.

When it comes to fees, the amount you pay depends on your account balance. For example, you will pay $ 0 in advisory fees if your account balance is less than $ 10,000. Fidelity has a fee of $ 3 / month for investors with a balance between $ 10,000 and $ 49,999. Those with $ 50,000 and over must pay 0.35% per year.

Fidelity Personalized Planning & Advice, on the other hand, merges automated investing and adviser support. This account offers everything that Fidelity Go does, but it also includes unlimited one-to-one calls with Fidelity financial advisors.

While you are responsible for a minimum requirement of $ 25,000 and a 0.50% annual fee, this account is ideal if you are looking for professional advice on topics such as saving for retirement, creating a emergency fund, debt reduction and designing a financial plan.

Overall, Fidelity Go and Fidelity Personalized Planning & Advice give you access to investment accounts managed by a team of Fidelity professionals and 24/7 customer support. Both accounts also allow you to adjust your risk tolerance and investment goals at any time, and Fidelity will automatically rebalance your portfolio to make sure it’s on track.

The best account for you depends on the amount of advice you are looking for.

Are Charles Schwab Automated Accounts Right For You?

Like Fidelity, Schwab’s automated accounts – Schwab Intelligent Portfolios and Schwab Intelligent Portfolios Premium – also include an automated-only account and an automated plus advice option. In addition, each account offers automatic rebalancing, tax loss recovery and professional monitoring.

The automated-only account, Schwab Intelligent Portfolios, beats Fidelity when it comes to advisory fees (it has no advisory fees or commission). But since the account has a minimum requirement of $ 5,000, Fidelity Go is a better choice for those with lower balances.

Schwab Intelligent Portfolios Premium combines all the functionality of the Schwab Intelligent Portfolios with unlimited individual advice from a certified financial planner (CFP). This account shares Fidelity Personalized Planning & Advice’s minimum requirement of $ 25,000, but it has a quite different fee structure.

Instead of an annual asset-based fee, Schwab charges a one-time planning fee of $ 300, plus an advisory fee of $ 30 / month. Those with a balance of less than $ 72,000 will pay comparatively less advisory fees (excluding investment / fund fees) with Fidelity Personalized Planning & Advice. Schwab’s $ 30 / month fee is $ 360 per year, but if you subtract Fidelity’s 0.50% fee from $ 72,000, you’ll get the same result of $ 360.

So in other words, Fidelity account becomes more expensive than Schwab’s once your account balance exceeds $ 72,000.

When it comes to its selection of investments, Schwab’s two automated accounts invest your assets in a diverse mix of low-cost ETFs. According to its website, Schwab builds custom portfolios with more than 80 variations of investments. It offers over 51 ETFs, three different investment strategies (Global, US-focused, and Income-focused), and six different risk profiles. You can find more information about its underlying ETF fees here.

Finally, if platform seaworthiness and customer support are important to you, you shouldn’t have any issues with either at Schwab. You can use either automated account with the brokerage’s web and mobile interfaces, and Schwab offers 24/7 live chat, phone support, and plenty of physical branches.

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