Schwab vs Fidelity: A Neutral Comparison for High-Net-Worth Investors

Fidelity and Charles Schwab are two of the world’s largest and most recognized investment firms. As of the end of 2019, Charles Schwab had 12.3 million active brokerage accounts and client assets valued at approximately $4.04 trillion. Fidelity was even larger, reporting 30.8 million brokerage accounts and total customer assets of $7.3 trillion as of March 31, 2020.

While both Schwab and Fidelity offer advisor-assisted and automated accounts, trusts, individual retirement accounts (IRAs), and education savings plans, there are important differences to consider. Factors such as account offerings, fee structures, investment products, and platform features distinguish the two firms and may influence which institution better aligns with an investor’s goals.

Investors who already hold accounts with Fidelity or Charles Schwab may continue to benefit from the core services provided by these institutions, including asset custody, transaction management, and account accessibility. When working with a new financial advisor, it is common for clients to maintain their existing brokerage accounts at institutions like Fidelity or Schwab, ensuring continuity of account access, historical data, and cost basis information. This approach often helps avoid the complexities associated with account transfers, such as ACATs or IRA-to-IRA movements, when transitioning wealth management services.

Understanding the structure, strengths, and service offerings of each firm can help high-net-worth investors make informed decisions when selecting an investment management strategy that fits their financial needs.

What Is the Difference Between Charles Schwab and Fidelity?

As investing and trading platforms, Fidelity and Charles Schwab share many fundamental similarities. Both are well-established brokerage firms with long histories of offering personal advising, retail financial services, and wealth management solutions.

Both companies have developed comprehensive online trading platforms available through websites and mobile applications. They provide full-service platforms with a wide range of asset classes, research tools, and educational resources accessible to individual investors.

Here is a breakdown of the key similarities and differences between the two firms:

Schwab vs Fidelity – Usability

Charles Schwab offers two main trading platforms: Schwab.com and StreetSmart Edge. Opening and funding an account is straightforward and can be completed online, through the mobile app, by phone, or at a local branch.

Fidelity provides three platforms: the Fidelity Mobile App, Active Trader Pro, and a web-based platform. Opening an account is also relatively easy, although additional paperwork may be required for features like options trading or margin accounts.

Both firms offer user-friendly websites with filtering tools, market news, portfolio analysis features, order tracking, and educational content. Their mobile apps are useful, although, like many broker-supported apps, they may have reduced functionality compared to desktop versions.

Schwab vs Fidelity – Services and Features

Both Schwab and Fidelity offer extensive asset classes, although there are slight differences. Fidelity supports direct forex trading, a feature not available at Schwab. Conversely, Schwab supports futures and Bitcoin trading, which Fidelity does not offer. While these distinctions exist, they are less likely to affect the average investor, as both asset classes tend to carry higher risk.

Both platforms provide access to comprehensive trading data, including critical statistics, technical indicators, and extensive historical price information.

There are also slight differences in account types. Schwab supports traditional retirement accounts like IRAs, Roth IRAs, and 401(k)s but does not directly support products such as CDs, annuities, or money market retirement accounts within its primary offerings.

Schwab vs Fidelity – Account Minimums

Both Schwab and Fidelity maintain $0 minimums for standard brokerage accounts. However, minimums apply to specific managed services:

• Fidelity Personalized Planning and Advice: $25,000 minimum
• Schwab Intelligent Portfolios: $5,000 minimum
• Schwab Intelligent Portfolios Premium: $25,000 minimum

Schwab vs Fidelity – Costs and Fees

Both brokers offer $0 commissions on online equity, ETF, and OTCBB trades for U.S.-based customers. Options trades incur a fee of $0.65 per contract at both firms. Mutual funds not included in the no-transaction-fee lists generally have a transaction fee of around $50.

Broker-assisted trades cost $32.95 with Fidelity and $25 with Schwab. For automated investment services, Fidelity charges up to 0.35%, while Schwab’s fees range from $0 to $30, depending on the service.

Both firms also generate interest income from client cash balances, though investors have the option to move idle cash into money market funds to earn higher interest rates.

Additionally, both brokers offer stock loan programs that share revenue generated by lending shares to other traders or hedge funds. Fidelity provides investors with the ability to select specific stocks to loan, offering a degree of flexibility not available at Schwab.

Schwab vs Fidelity – Portfolio Analysis

Portfolio analysis features are similar at both firms. Investors can access real-time margin information, realized and unrealized gains, and tax reporting tools. Schwab additionally offers tools to estimate the tax impact of future trades, providing an extra layer of portfolio planning capability.

Trade Experience

Both Fidelity and Schwab offer investors access to web-based platforms, desktop applications, and mobile apps designed for managing accounts and executing trades.

Fidelity’s desktop experience includes planning tools, market news, and research resources. ActiveTrader Pro, Fidelity’s advanced desktop platform, provides users with smart trading insights, visual data displays, real-time monitoring, and idea generation features. Fidelity also integrates account access with voice assistants such as Google Assistant and Alexa for added convenience.

Schwab’s web-based platform, Schwab.com, features the All-in-One Trade Ticket for executing trades across multiple product types. The platform also provides access to real-time market data, expert commentary, research tools, and product comparisons.

The Fidelity mobile app enables investors to trade U.S. stocks and ETFs, track portfolios, access streaming quotes, and utilize trading tools for informed decision-making.

Similarly, the Schwab mobile app allows users to securely access and manage their accounts, execute trades, and monitor portfolio positions conveniently from mobile devices.

Both firms offer versatile, multi-platform experiences designed to accommodate the trading and account management needs of individual investors.

Trading Technology

Charles Schwab’s order routing system directs most stock orders to third-party wholesalers, aiming to balance execution quality with cost efficiency. This results in a reported average price improvement of $1.03 per equity order for trades involving up to 99 shares. For trades between 1–99 shares, Schwab reports an average execution speed of 0.06 seconds, while trades of more than 99 shares average an execution speed of 0.03 seconds.

Fidelity’s order routing technology is designed to access a wide variety of markets. Fidelity reports a net price improvement of $1.86 per 100-share equity trade, with an average execution speed of 0.08 seconds. Notably, Fidelity does not accept payment for order flow on stocks or ETFs, which may influence routing practices and order execution quality.

For options trading, Fidelity collects an average of $0.22 per contract, while Schwab collects approximately $0.60 per contract.

Both firms place a strong emphasis on order execution quality and provide competitive technologies to support investors’ trading activities.

Education

Fidelity’s platform provides research tools and quotes across all of the company’s investment products. The Fidelity Learning Center offers a range of educational resources, including live online webinars, coaching sessions, and weekly classes designed for beginner traders. Users can also find information on personal finance topics such as money management, retirement savings, charitable giving, investing principles, and trading strategies. Fidelity’s professionals regularly share insights and commentary on market developments.

Additionally, users have the option to subscribe to Fidelity Viewpoints, a weekly email featuring market updates and educational content.

Charles Schwab offers a variety of educational resources, including podcasts, the Schwab magazine, and Schwab Live Daily, a live broadcast starting at 10 a.m. ET on weekdays that features market discussions and live Q&A sessions.

Schwab’s educational materials include articles covering the basics of investing, retirement planning, investment insights, and commentary from Schwab researchers. The insights span the company’s full range of product offerings and aim to help investors better understand market dynamics.

Both platforms provide extensive educational resources designed to support investors at various stages of their financial journey.

Customer Service

Fidelity offers a Virtual Assistant that is available 24/7 to answer investors’ questions. In addition to the Virtual Assistant, users can engage in live chat with Fidelity’s support team on weekdays from 8 a.m. to 10 p.m. ET and on weekends from 9 a.m. to 4 p.m. ET. Phone support is also available, with dedicated numbers provided for customer inquiries.

Charles Schwab provides customer service support for both brokerage and banking services via phone. After logging into their account, customers can access a “contact us” link that connects them to a live chat feature for real-time assistance.

Both firms offer multiple channels for client support, ensuring investors have access to help when managing their accounts or addressing service-related questions.

Security   

Charles Schwab offers protection against losses due to unauthorized activity within Schwab accounts. The platform uses encryption and risk-based security technologies to safeguard account access. Schwab employs two-factor authentication, automated alerts, and offers Voice ID technology for secure phone access to accounts.

Fidelity provides a Customer Protection Guarantee that covers losses from unauthorized activity. Fidelity participates in the Federal Deposit Insurance Corporation (FDIC) and Securities Investor Protection Corporation (SIPC) programs for additional coverage. Accounts are secured with two-factor authentication and voice verification options. Customers also have the ability to block electronic transfers out of their accounts. Wealth Management clients have access to advanced identity protection services, including identity theft insurance.

Both Schwab and Fidelity implement comprehensive security measures designed to help protect investors’ personal information and financial assets.

Account Types    

Both Charles Schwab and Fidelity offer a wide range of standard account types, including individual and joint brokerage accounts, individual retirement accounts (IRAs), 529 education savings plans, trust and estate accounts, and health savings accounts (HSAs).

Each firm provides account options designed to accommodate various financial goals, from investing for retirement and education to managing wealth and planning for healthcare expenses.

Is Fidelity or Schwab Better?

Both Charles Schwab and Fidelity offer comprehensive, full-service investing and trading platforms designed to support a wide range of investor needs. Whether you are an active trader or focused on long-term retirement planning, each platform provides a robust set of tools and resources to help meet your financial goals.

Fidelity’s platform may be more appealing to newer or casual investors due to its user-friendly design and intuitive navigation, which can make it easier to explore investment options and manage accounts. Educational resources and portfolio-building tools are readily accessible, supporting individuals who are still building experience with investing.

Charles Schwab, on the other hand, may appeal more strongly to experienced investors. The platform offers enhanced personalization features, a broader selection of advanced data sets, and access to more specialized trading tools, particularly through its StreetSmart platform. Investors seeking deeper market analysis and more extensive research tools may find Schwab’s offering particularly valuable.

Ultimately, the best choice depends on individual investment styles, goals, and platform preferences. Evaluating the available tools, account features, and services at each firm can help investors select the platform that best fits their needs.

Importance of Using a Financial Services Company

Some high-net-worth individuals and families may hesitate to work with a financial services company, believing that all necessary financial information is readily available online. While self-research is valuable, it is important to consider whether you have a comprehensive understanding of complex financial instruments, strategies, and market dynamics.

Even knowledgeable investors can sometimes make emotional, fear-driven, or suboptimal decisions without objective advice. In many cases, partnering with an experienced financial services firm can provide added value, helping to avoid costly mistakes and strengthen long-term financial security.

Here are two key situations where working with a financial services company may offer significant benefits:

1. Optimizing Asset Allocation

Asset allocation is a foundational investment strategy aimed at achieving the right balance between investment risks and returns. Financial services companies with expertise in high-net-worth portfolios can assist in constructing diversified portfolios tailored to individual goals and risk tolerances. Strategic asset allocation not only helps investors stay aligned with their objectives but also mitigates the impact of market volatility and economic fluctuations over time.

2. Minimizing Risk Exposure

Another advantage of working with a financial services firm is the access to professional risk management services. Skilled advisors can assess whether your asset distribution and diversification strategies effectively protect your wealth against market unpredictability. Additionally, they can help evaluate options such as insurance solutions to safeguard financial well-being against unforeseen health or life events. Comprehensive risk management plays a critical role in preserving and enhancing long-term wealth.

Choosing to work with a financial services company can offer access to personalized advice, sophisticated planning strategies, and objective guidance—all of which contribute to building a resilient financial future.

Why You Should Enlist Pillar Wealth Management

Financial services companies play an important role in helping individuals and families achieve both short- and long-term financial goals. For affluent individuals, working with a specialized wealth management firm can offer additional advantages by providing personalized strategies aligned with unique financial circumstances.

Here are key factors to consider when evaluating a wealth management firm:

1. Experience

Experience is a critical factor when assessing the credibility and effectiveness of a financial services provider. Firms with decades of experience often have deeper insight into the specific needs of high-net-worth and ultra-high-net-worth investors. An experienced wealth management team brings accumulated knowledge and refined strategies designed to support complex financial objectives across market cycles.

2. Personalized Wealth Management and Financial Strategies

Tailored financial planning is an important differentiator when selecting a wealth manager. Unlike standardized approaches that apply the same solutions to all clients, personalized wealth management involves carefully assessing each individual’s financial goals, risk tolerance, and investment timeline. Customized strategies can help investors better navigate changing market conditions and meet specific legacy, retirement, and wealth preservation objectives.

3. Comprehensive Range of Services

Working with a wealth management firm that offers a broad suite of services can provide added convenience and strategic cohesion. Services may include legacy and estate planning, wealth transfer strategies, insurance planning, charitable giving planning, and retirement income solutions. A holistic approach helps align all aspects of a client’s financial life, creating an integrated strategy for long-term success.

Selecting the right wealth management partner is an important decision that can help affluent investors achieve greater clarity, security, and control over their financial future.

Wrapping Up!

Investors seeking support with wealth management, financial planning, retirement strategies, or investment planning often recognize the benefits of working with experienced financial services providers. For high-net-worth and ultra-high-net-worth individuals, having access to objective guidance, transparent fee structures, and customized financial strategies can be critical in achieving long-term financial success.

Tailored advice that accounts for each client’s unique financial background and investment goals plays an important role in building strategies that adapt over time and support evolving needs. Working with a trusted and experienced wealth management firm can help ensure that financial planning remains aligned with personal priorities, market conditions, and future aspirations.

If you are exploring opportunities to refine your financial strategy, you can take the next step by: