Fidelity vs. Robinhood: A Comparison of Two Highly-Rated Beginner Investment Apps
What do investment apps do?
Investment apps are a great option for beginner investors or those wishing to invest in small amounts on a consistent basis. Some apps let the user make micro-investments of a few dollars or cents, which are appealing to those with a lower income looking to invest some spare change in smaller increments. Other options for investment apps allow the user to trade stocks directly on relatively streamlined, accessible platforms like Robinhood or Fidelity.
Below is a brief breakdown of what is offered on two of the highest rated investment apps, Robinhood and Fidelity.
Fees: $0 trading
Account minimums: none
Beginner investing advice
Ability to explore size-based EFTs
Stock news and statistics
Comparisons to other EFTs (not a recommendation, based on portfolios of Robinhood users)
Free stock offered by Robinhood
Compared to Fidelity, Robinhood is definitely on the simplistic side, making it much more accessible for those who may not be as familiar with investing. There is little to offer in terms of customization and personalization, but one facet that distinguishes Robinhood from Fidelity is its cryptocurrency trade offering.
The only other significant drawback of Robinhood’s services is its lack of order flow reporting; though the standard for the industry is to report on a per-share basis, Robinhood reports on a per-dollar basis, and it also does not disclose its price improvement statistics.
Overall, for an easy-to-use interface, Robinhood does a pretty good job at offering the most essential information to someone looking to begin investing with minimal experience. With increased transparency regarding its order routing practices and more research available, Robinhood could become slightly more well-rounded in its features.
Fees: $0 trading (equity, EFT, options); $0.65 per contract for options
Account Minimums: none
Virtual assistant chatbot
Extensive ‘Learning Center’ resource
A slightly more mature investment app, Fidelity’s features are much more extensive than Robinhood’s, making it even more user-friendly for beginner investors who need to see some context regarding what they’re potentially investing in. One of these features includes a ‘Learning Center’ resource full of how-to’s, definitions, and financial planning/management tools.
Unlike Robinhood, Fidelity does not offer cryptocurrency trading as well as futures or future options. However, one major advantage Fidelity has over Robinhood is its trade executive engine which offers users a high rate of price improvement on orders, though they are low on options.
In summation, Fidelity seems to offer the most extensive professional research to its clients, ensuring better investment choices are made. As long as the user is willing to search through a larger body of information, Fidelity’s tools will lend themselves well to investors of all experience and knowledge levels. Robinhood remains a worthwhile consideration, though its lack of price improvement information should be accounted for, especially if a client is concerned about making a well-informed trade decision.