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Fidelity Investments and Questrade are two of the biggest online brokerages in North America.
As beneficiaries of the transformative nature of the internet in the financial industry, both businesses have played an integral part in the explosion of online financial activity over the last few years. Helping facilitate the participation of thousands of people in the world’s financial markets.
Even though both essentially offer online brokerage account services. They aren’t as alike as we might assume.
Equity investments are subject to market risks and may not be suitable for all investors. If you have any doubts as to the merits of an investment, you should seek advice from an independent financial advisor. So please invest at your own risk.
In this article, we will explore the many differences and similarities between these two trading platforms.
To fully understand these two companies and how they operate in comparison to one another, we must start at the beginning and understand how they began
Fidelity is based in the United States and was founded in 1946. The firm is a publicly traded company whose primary focus is U.S clients. Fidelity is considered one of the leading Brokerage firms in the United States and is part of the Big four brokerages in the U.S, alongside TD Ameritrade, Charles Schwab, and E*Trade.
Questrade, on the other hand, is a Canadian-based company founded in 1999. The firm is privately held and is primarily focused on Canadian investors. Questrade is at the forefront of Canadian online brokerages.
2. Opening an Account
Minimum account requirements. To open a Fidelity account, you only need a minimum deposit of $0; to open a Questrade account, you need a minimum of $1000.
Account Verification time. It takes about 1 day to open a Questrade account. It takes about 1- 3 days to open a Fidelity account.
3. Deposit Type
Once you’ve opened your account, you need to deposit the funds you wish to transact within the account.
Questrade allows users to deposit into their accounts using a credit/debit card, but Fidelity does not.
4. Currency Base
Fidelity currently serves 16 currency bases worldwide, while Questrade only serves 2 (USD and CAD). This means Fidelity offers traders far more opportunities for financial participation in the global arena than Questrade.
5. Product Offerings
Due to their different corporate structures and business models. Questrade and Fidelity offer different services to their clients regarding financial market participation. For example:
Fidelity offers fractional shares to its users, while Questrade does not.
Fidelity offers more markets and products to its users than Questrade. While Questrade is focused solely on online brokerage, Fidelity offers online and offline brokerage services.
Questrade offers forex trading opportunities to its traders, but Fidelity does not. This makes Questrade more appealing to North American forex traders than Fidelity.
Questrade offers Stock CFD to its users, but Fidelity does not. (It is important to note that retail investor accounts lose money 74-89% of the time when trading CFDs; hence Investors intending to invest in CFD should be wary).
As one might expect, Questrade and Fidelity have very different fee structures for their accounts and transactions. For example:
Fidelity offers Commission free Stock and ETF trades but Questrade charges $5.
Fidelity charges a margin rate of 9.8% rate while Questrade charges a 9.3% rate.
Fidelity only charges $0.45 for stock fees, while Questrade charges $5 for a transaction.
Fidelity charges 37.5 dollars for a mutual funds fee, while Questrade charges only $10 for a mutual fund.
Fidelity charges 6.5 dollars for an Options/Contract fee, while Questrade charges $20 for a similar transaction.
Note: These values change frequently and are subject to updates.
7. Educational Material and Training
Trading education is far more comprehensive and organized on Fidelity’s platform than on Questrade. On Fidelity, the education is very institutional and structured, but in Questrade, it’s just a financial blog.
Educational resources are essential to new and seasoned traders and investors alike. To get them up to speed with the current state of financial markets, they need market data.
The better organized and accessible this market data is, the better.
8. Regulation and Investor Protection
Fidelity is regulated by the financial industry regulatory authority (FINRA) and SIPC (a US Investor Protection Scheme). Fidelity has a $1 billion company insurance cover, and SIPC protects up to $500,000 and $250,000 for cash.
The firm is a publicly traded company and is expected to disclose all relevant financial information to the public. It is also regulated by the securities and exchanges commission (SEC).
Questrade is privately held and is regulated by the investment industry regulatory organization of Canada(IIROC) and the Canadian investor protection fund (CIPF).
Questrade investors are protected from the firm’s insolvency to the tune of CAD 1 million. Questrade also has $10 million worth of private insurance for their account holders.
Now that we have explored the differences. We can now take a look at the Similarities between these two brokerage houses. Some of them are:
- Both businesses allow for Bank transfers and Electronic Wallets to be used for withdrawals.
- Both businesses offer investment portfolio management services for their clients. Questrade has Questrade wealth management that performs everything from trade execution to reporting for its clients. A fee is billed quarterly and is calculated as a percentage of assets under management.
- Fidelity has its Fidelity managed accounts that offer investment advice and management services to their clients. Depending on the account, management fees can range from $0 -$350,000.
- Both platforms offer comprehensive trading tools through their Web-based, Desktop, and Mobile applications. They are making it much easier for an online broker to participate in the market more efficiently.
- None of them allow for Credit/Debit card withdrawal from their accounts.
- They both have no charge on bonds.
- They both charge zero non-trading fees.
- They charge zero Withdrawal fees.
- They do not charge Inactivity fees.
- They both have no charge on exchange-traded funds.
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Fidelity vs Questrade: The Bottom Line.
All things considered, it’s fair to say that Questrade and Fidelity square up relatively evenly with one another. The quality of their services is evenly matched, and where one fails, the other excels. As time goes on and more and more business is conducted online, it is fair to expect some degree of homogeny in their service delivery and pricing will emerge.