(investors) -- Fidelity brokerage is keeping its streak alive by ranking among the top brokers in IBD's seventh annual Best Online Brokers survey.
Despite stiff competition from rivals, the Boston-based company made the top five brokers for a seventh straight year and top two for the past six years. According to its customers, Fidelity brokerage excelled in 13 of 14 important performance categories, including Customer Service, Educational Resources and Research Tools.
Those attributes gave Fidelity one of the highest overall Customer Experience Index ratings among all the brokers in the survey. They also drove a 6% increase in the number of clients to 20.5 million, from the prior year.
"We believe it's our commitment to value, transparency and innovation," Scott Ignall, head of Fidelity's retail brokerage business, told IBD. "Value isn't just headline commission, but the total platform of research, education, products and customer service that we expose to our customers. Transparency is making sure customers know exactly what they are paying before they hit the buy button."
That includes features such as a flat annual fee of 0.35% of assets for its Fidelity Go digital advisor and four ZERO-expense ratio index funds. The four funds — Fidelity ZERO Large Cap Index Fund (FNILX), Fidelity ZERO Total Market Index Fund (FZROX), Fidelity ZERO Extended Market Index Fund (FZIPX) and Fidelity ZERO International Index Fund (FZILX) — generated $2.25 billion in net flows as of Dec. 31.
Fidelity also offers value with price improvement, by scanning a wide variety of available trades and getting the best execution order for clients.
"Fidelity receives no payment for order flow from market makers, so we can achieve the best price improvement in the industry," Ignall said. "Fidelity customers average more than $17 in price improvement for every 1,000-share market order, which is more than six times better than the industry average."
Fidelity Brokerage Research Scores High Marks
Fidelity brokerage earned the highest rating in the following research-related categories: Educational Resources, Investment Research, Portfolio Analysis & Reports, and Research Tools.
"Innovation spans both technology like our mobile platform and our voice-based authentication, and also how we make it easier for investors to generate new ideas with our streamlined research tools," Ignall said.
The broker offers in-house and third-party research from more than 20 firms on stocks, ETFs, mutual funds and other investment vehicles. Fidelity also provides an online learning center and offers free live webinars. It charges a $4.95 trading commission for all online U.S. equity trades.
Advanced trading tools are available for more active traders. The Active Trader Pro platform's features include streaming market data, interactive charts, advanced option analytics and portfolio management tools.
Wealth-Lab Pro is available to clients with at least $25,000 in assets who trade more than 36 times in a rolling 12-month period. The platform lets users test prebuilt or customized trading strategies based on technical and fundamental analysis. It also provides access to up to 20 years of historical data.
Fidelity Brokerage Adds New Features
During the past year, Fidelity brokerage improved or added a number of new tools to its trading platforms. For instance, it created Shares Calculator to help customers more accurately buy the right amount of shares, given the dollar amount they want to invest.
"Our two most frequent trade errors are buying-power related. ... Customers are trying to buy more than they can afford and we know many customers think in terms of dollars rather than shares when creating a trade," Ignall explained. "Testing the shares calculator showed that those that used the calculator saw nearly a 20% increase in trade completion."
On the mobile trading front, Fidelity brokerage launched an update that lets users customize the app launch screen. Other updates include the ability to track the detailed status of complex financial transactions such as bank wires.
"New features coming soon include peer-to-peer payments to friends and family via PayPal partnership and our virtual assistant embedded within the apps themselves," Ignall said," and also iMessage for immediate access to customer service."
Fidelity brokerage holds steady near the top in the Customer Service category of IBD's annual Best Online Brokers survey. And 72% of those surveyed said they were "very satisfied" with Fidelity.
So, how does the online broker stay on top of what its customers want and/or need?
For one, Fidelity brokerage develops new products and services with the help of customers' input, Ignall says.
Engages In 'Agile Development'
"We bring in groups of customers to give feedback on the development decisions, and we listen to suggestions given us through customer service interactions and on our social media channels," he noted. And it's changed the way it launches products based on that feedback, he adds.
"Instead of spending a year or more building a fully developed product, we put out incremental builds to a subset of customers and get real-time feedback on how to further develop them," Ignall said. "We call it agile development."
Customers are apparently happy with the results. Fidelity scored the highest rating in IBD's annual Best Online Brokers Survey for the Site Performance category.
Because Fidelity is a private company and as such, doesn't need to worry about quarterly earnings, it can make "bold" short- and long-term investments to improve its products and services. That allows the brokerage to always makes customer-centric decisions, Ignall says.
"For example, we don't receive payment for order flow for stocks or ETFs, which competing brokers rely on for revenue," he said. "We have 24/7 customer service, while some competitors offer limited hours. We charge $1 per bond, while other brokers charge hidden markup fees. (And) we alone offer a 2% unlimited cash back credit card, while others offer lesser rates or none at all."