Fidelity Go is the robo-advisor product for investment giant Fidelity. Unlike many other robo-advisors, this is a supplementary offering to an existing investment advisor. As such, its reporting to the SEC is wrapped up in other investment activity, and it’s difficult to ascertain specifics about the service.
AUM and account numbers aren’t available for Fidelity Go, and neither is average account size. FG only offers taxable accounts and IRA/Roth IRAs for robo-advising, while a wider arrange of accounts is available through Fidelity’s other services.
Fees and investing
It has a single fee that covers all account expenses, so you won’t be hit with any initial buy-in fees or other transaction fees. The annual advisory fee for retirement portfolios is 0.35%, with taxable accounts costing slightly more at 0.4%. It offers a variety of index funds and ETFs, as well as human oversight and live support. To open an account, you need to invest a minimum of $5,000.
Like any financial advisor, robo or otherwise, this fee covers advisor and management fees, but not fund costs. All mutual, index and exchange traded funds (ETFs) have operating costs that are expressed as an expense ratio, and are deducted from your investment daily. Fidelity Go focuses on low-cost funds that have an expense ratio below that of other funds in the same asset class.
The signup flow takes you through your age, whether it’s a single or joint account, and the goal of saving. Only two goals are offered: “retirement” or “something else”. You’ll also choose your general account type, taxable or tax advantaged. Bear in mind that the only tax-advantaged accounts currently available are IRAs and Roth IRAs.
You’ll also set your initial contribution, minimum $5,000, and planned monthly contribution. After you set your household income and risk tolerance, you’ll be suggested a strategy. The strategy consists of one of seven portfolios sorted by risk. You can take the suggested offered to you or select another risk level, and that will change the mix of stocks and bonds chosen for your account.
To finalize account setup, you verify the financial data and plan that you’ve just gone through. Then you create a Fidelity account (or sign into an existing one) which will require entering personal and contact information. Be ready with your Social Security number, and if you don’t have one, be aware that you must be a U.S. resident with a valid U.S. address to sign up.
What you get
Your portfolio will be a mix of mutual funds and exchange traded funds (ETFs). ETFs are a type of index fund, which is a broad holding of stocks and bonds traded on a market. Index funds are meant to track with the market so your holdings grow as the market does, instead of trying to “beat” the market like actively managed funds.
There are currently seven different portfolio options with allocations based on risk. The funds are spread across four broad asset classes: domestic and foreign stocks, bond, and short-term investments. When your investment allocations stray from pre-set percentages, your investments are automatically rebalanced. No tax-loss harvesting is offered. The day-to-day portfolio management is done by a Fidelity partner, Geode Capital Management, LLC.
Fidelity itself will provide an annual review of your strategy and recommend changes based on your personal information and account performance. You can also change your approach yourself by updating the questions answered at signup, or by adjusting your risk tolerance.
Fidelity’s main site hosts news, research, guides and calculators, and has live chat representatives. The Planning and Guidance Center tool analyzes your current investment strategy and helps you create a plan to align your strategy with specific goals.
Fidelity Go is a solid offering from an existing financial services company. The 0.35% fee is competitive, and the established name is attractive, as is the institutional knowledge that comes with it. You get access to some of this knowledge through your annual reports, phone and live chats.
While planning assistance for goal-setting exists, it would be nice to see this integrated into portfolio construction, along with more portfolio personalization options. Combined with the $5,000 minimum, that raises the barrier-to-entry for Fidelity Go. However, if you have the money and can make use of the resources provided, Fidelity Go offers the peace of mind that comes with an traditional, established financial advisor.