SoFi vs Fidelity 2023: Which brokerage platform is better for you?
Modern investors have many different brokerage services to choose from these days. Online broker services are especially popular, most likely due to their overall convenience, support for multiple types of accounts, and generally low—or non-existent—management fees.
Choosing the right financial product is an important part of your investment strategy. If the service you decide to go with suggests poor investment decisions (and you decide to go along with these suggestions), then you may find the value of your stock market to decrease quite a bit.
Different investors come from various financial situations. Often, the best services that could help them reach their investment goals are too expensive or simply unachievable. Fortunately, today we’ll be taking a look at two services that anyone can use to better their financial future.
Which service will come out on top? Find out in this SoFi vs Fidelity comparison!
What is SoFi?
SoFi is an online financial platform that provides a range of services including investing, banking, retirement accounts, loans, and student loan refinancing. They offer commission-free trading on most asset types, robo-investing, and access to live human advisors at no extra charge. SoFi is known for its versatile offerings which are suitable for both new and seasoned investors.
What is Fidelity?
Fidelity is a well-established financial institution offering trading options on various asset types, including mutual funds, with commission-free trades. They allow users to open retirement accounts and provide both robo-advisory and human advisor services, although the latter is not free. Fidelity’s range of investment and banking solutions makes it a preferred choice for many investors.
|SoFi is Better for:||Fidelity is Better for:|
|Automated investing||Transfer out fees|
|Educational resources||Mutual funds|
|Human advisory service||Investment portfolio diversification|
Having access to additional resources can be helpful when trying to reach your investment goals. Fortunately, both services offer additional features beyond commission-free stock trading such as automated investing, financial advice, and investment strategy advice, from professionals.
Bother services grant unlimited access to diversified portfolios via their automated investing, which helps less experienced investors start making their money work for them right away.
Historically, these have been successful. However, it is important to mention that past performance is not indicative of future performance, so you should only ever invest as much as your risk tolerance allows.
|Free Features||Commission-free trading, access to human advisors, automated investing, fractional shares||Trading of stocks, ETFs, account creation, cash management account, robo-advisory (sub $10k), outgoing transfers|
|Paid Features||Outgoing transfers||Robo-advisory ($10k+), human advisor, options contracts, bonds, CDs, margin investing|
|Annual Subscription Fees||N/A||N/A|
|Securities Analyzed||Stocks, ETFs||Stocks, ETFs, options, mutual funds, bonds, CDs, IPOs, and precious metals|
|Investing Approach||Active & passive||Active & passive|
|Best Use||Meeting Multiple Financial Needs||Meeting Multiple Financial Needs|
|Modest Money Overall Rating|
Factor 1: Free Features
To start things off, we’ll take a look at the free features offered by Sofi Invest and Fidelity. There are many similarities here, including the availability of financial advice in the form of articles and advisors, as well as banking solutions.
Future success starts with making a financial plan, so take close note of all the features offered to determine how you can implement them into your investing journey moving forward.
SoFi Comes Out on Top
- SoFi offers a wide variety of education resources
- Fidelity supports mutual funds
- SoFi makes it easy to use multiple services
Although SoFi invest is their investing service, you can access any of the SoFi Securities, LLC products from the same website. Other services include SoFi bank, retirement accounts, loans, student loan refinancing, and more
While SoFi Invest doesn’t support mutual funds, it does support options trading, offers commission-free trading on most asset types, and doesn’t incur any maintenance or account fees.
SoFi Invest’s users can look at the website for investment advice (as well as advice on pretty much any other financial topic). If they’d rather have a robot do their investing for them, SoFi Invest offers robo investing.
Not interested in a robot making trades for you? All SoFi Invest users have access to a live human advisor (free of charge), which is one of the biggest advantages that SoFi Invest has over Fidelity.
Fidelity offers many of the same features as SoFi. It supports options trading, offers commission-free trades on most asset types, allows users to open retirement accounts, and even supports trading mutual funds (unlike SoFi).
However, getting a second-hand opinion can often be very helpful when you’re trying to reach your investment goals. Like SoFi, Fidelity does offer human advisors, but they’re not free.
Factor 2: Paid Features
Next, let’s take a look at the paid features offered by these trading platforms. Fortunately, such fees are minimal, as the main benefits of these trading platforms are their largely-free services.
SoFi Gives More for Less
- Both services offer commission-free trading
- Fidelity doesn’t charge an outgoing transfer fee
- SoFi provides human advisors for free
Neither SoFi Invest nor SoFi bank charges any fees to use their services. While it’s possible to incur fees from using the investment tools, SoFi itself doesn’t charge any fees. An example of this is SoFi Invest’s robo investing, which uses ETFs.
Although SoFi Invest will let you use its robo investing feature for free, the ETFs (Exchange-traded funds) themselves may charge you a small management fee. Still, considering how small these additional fund fees are, they shouldn’t drastically affect your overall investment return.
However, if you decide to close your SoFi account, transferring the funds out of your account will incur a $75 fee. This is the only real drawback of SoFi.
Like Sofi, Fidelity offers a wide range of investment options. Similarly, although Fidelity doesn’t charge you to use most of its services, some transactions—such as margin trades—may incur small fees.
You’ll also need to pay for its robo advisory services if your account balance exceeds $25,000. Once you cross the $25k mark, Fidelity will charge you 0.35% of your AUM for access to the robo advisor.
Lastly, Fidelity charges users a fee if they want to talk with a financial advisor. To talk to a human advisor, Fidelity will charge you a fee based on your AUM (assets under management). This fee is low, ranging from 0.20% to 1.50%, but it’s not free like it is with SoFi.
Factor 3: Banking Solutions
While the main offering of each service is their investing services, banking solutions play a vital role in reaching one’s financial goals. Lastly, let’s take a quick look at each platform’s banking options to compare.
SoFi Offers a Higher Interest Rate
- SoFi APY goes up to 3.5%
- Fidelity APY tops out at 2.21%
- SoFi requires direct deposit for higher APY
This company offers both Checking and Savings accounts. Without a direct deposit, members will earn a 1.20% APY on each account. With a qualifying direct deposit, members earn 3.75% APY on their Savings account, and 2.50% APY on their Checking account.
Fidelity offers a “Cash Management” account to help users meet their financial goals. This account includes both a “Checking” and a “Savings,” which earn 2.21& APY. Although similar in terms of functionality, it’s important to note that—as Fidelity is not a bank—the Cash Management account is technically a brokerage account, not a Checking/Saving account.
SoFi vs Fidelity: Which One is Better?
On the surface, both brokerage firm options seem very similar. They both offer automated investing, human advisors, and commission-free trading. Additionally, they also both offer complimentary services—such as banking or personal loans—that can help investors reach their financial goals faster.
That said, we think that SoFi Invest is the superior service. While the $75 outgoing transfer fee is definitely a minus, Sofi Invest outperforms Fidelity in nearly every other aspect. If you want to expand your investment portfolio and reach your investment goals while spending as little as possible, SoFi Invest is the way to go.