Who Should Choose Fidelity Go®?
Fidelity Go® is a go-to choice for existing Fidelity Investments clients who want a basic robo-advisor to manage a low-cost automated portfolio.
New investors looking for a very basic robo-advisor might consider Fidelity Go® thanks to rock-bottom costs for balances under $25,000. The platform is from a well-regarded brand, offers reasonably diversified portfolios along with access to solid financial planning guidance—although there are no options for consulting with live financial advisors.
While this robo-advisor does everything it promises, investors need to understand that annual advisory fees kick in once their account balance climbs above $25,000. In addition, when compared to its competitors, average costs for Fidelity Go® users with larger balances are roughly in the middle of the pack.
Meanwhile, investors who are looking for a comprehensive robo-advisor with access to tax-loss harvesting and cash management options should look elsewhere.
How Fidelity Go® Works
Like many other robo-advisors, prospective Fidelity Go® users begin by answering a short series of questions about their finances, goals and risk tolerance. The answers help the platform create a sample investment portfolio, tailored to your needs.
The questions ask for the user’s birth year, whether they prefer a single or joint account, and whether they are investing for retirement or another goal. The final two questions cover investment amount and risk score.
You indicate your risk tolerance on a spectrum from 1 to 10, with 1 the most conservative and 10 the most aggressive. In our evaluation, we chose 7, which yielded a moderately aggressive 85% stock, 15% fixed income portfolio made up of six funds. More conservative investors will have more bonds and less equity, while more risk tolerant users get greater stock allocations and less fixed income.
Fidelity Go® Fees and Costs
For new investors with low balances, Fidelity Go® is hard to beat. Accounts with balances under $25,000 pay no annual management fee and invest in zero expense ratio Fidelity Flex mutual funds.
Once your balance crosses the $25,000 threshold, however, you pay an annual management fee of 0.35%.
Users with larger balances can find lower annual fees at Schwab Intelligent Advisors, Betterment and Wealthfront, among other options.
Fidelity Go Management Fees
| Account Balance | Management Fee |
|---|---|
|
Less than $25,000
|
$0
|
|
More than $25,000
|
0.35% per year
|
The six proprietary Fidelity Flex mutual funds charge zero expense ratios. This contrasts with typical robo-advisor portfolios of exchange-traded funds (ETFs) that typically charge management fees ranging from 0.05% to 0.18% for some international funds. Over the long term, zero expense ratio funds add to your total returns, as abundant research correlates lower fee index funds with higher long-term gains.
How Fidelity Go® Invests Your Money
Fidelity Go® builds its user’s portfolios from a list of six proprietary zero expense ratio Fidelity Flex mutual funds. In addition to broadly diversified U.S. and global stock funds, and a total market U.S. domestic bond fund, your portfolio may include a small- or mid-cap stock index fund. We appreciate the nod to small and mid cap US companies that tend to grow more quickly than larger firms, though with more risk
Fidelity Go Mutual Funds Options
| Fund | Ticker | Net Assets |
|---|---|---|
|
Fidelity Flex 500 Index Fund
|
FDFIX
|
$2.43 billion
|
|
Fidelity Flex Small Cap Index Fund
|
FLXSX
|
$226 million
|
|
Fidelity Flex Mid Cap Index Fund
|
FLAPX
|
$228 million
|
|
Fidelity Flex International Index Fund
|
FITFX
|
$1.20 billion
|
|
Fidelity Flex Municipal Income Fund
|
FUENX
|
$571 million
|
|
Fidelity Flex US Bond Index Fund
|
FIBUX
|
$1.17 billion
|
|
Fidelity Flex Government Money Market Fund
|
FLGXX
|
$98 million
|
Based on your response to the initial interview questions, Fidelity Go® allocates your money among these funds in line with your time horizon, goals, risk tolerance and whether you chose an IRA or a taxable account. Users have the option to go with the recommended portfolio or choose another.
The fund choices among different portfolios are largely the same, except that retirement accounts get the Fidelity Flex US Bond Index Fund. Taxable accounts substitute that bond fund for the Municipal Income Fund choice. That’s the extent of Fidelity Go®’s tax optimization game, as the platform lacks tax loss harvesting.
Asset allocations range from conservative to aggressive. Conservative portfolios have greater allocations to bond funds, while aggressive portfolios put more of your money into stock funds.
All investment portfolio information is provided to you before you sign on the dotted line and fund your Fidelity Go® account. Alternate portfolio choices are also accessible by clicking on, “explore other strategies” located below the recommended portfolio. Additionally, listed below each alternate strategy are values for projected return potential under two distinct market scenarios, average and weak markets.
The platform lacks many of the diversification options that are available from competitors like Schwab Intelligent Portfolios, Betterment and Wealthfront. Fidelity Go® doesn’t offer socially responsible funds, real estate funds, commodity options or international bond funds. Investors seeking greater investment diversification might consider alternate robo-advisors.
Other Fidelity Go® Features
Fidelity Go® also offers a financial planning investment tool and guidance center.
This planning resource is available to all Fidelity Go® clients. The tool takes users through a series of questions related to their planning needs and yields financial recommendations. The planning topics are organized by goal: retirement, college, investment strategy or other.
Fidelity Go® Advantages
One of the greatest advantages of Fidelity Go® is the lack of fees for investors with a balance of less than $25,000. Combined with the low minimum balance requirement of $10, it makes this platform an excellent choice for new investors with modest amounts to invest.
Zero expense ratio Fidelity Flex mutual funds can save Fidelity Go® users anywhere from 0.05% to 0.18% in expense ratio fees. When you contrast that with the possibility of paying the 0.25% annual advisory fee plus additional ETF expense ratios at Betterment or Wealthfront, your balance should grow faster at Fidelity Go®—until it hits $25,000.
The final key advantage of Fidelity Go® is that this platform is part of the wider world of Fidelity Investments. For investors who’d like a robo-advisor option that smoothly integrates with a full-featured online brokerage, the combination of Fidelity Investments online brokerage platform and Fidelity Go® is compelling.
Fidelity Go® Disadvantages
Fidelity Go® offers few of the bells and whistles you get with other competing robo-advisors. There’s no cash management account, and no portfolio customization. The account choices are limited to individual and joint taxable accounts and IRAs. The platform doesn’t have trusts, custodial accounts or 529 options.
It’s debatable whether the lack of diversified investment funds like international bonds or real estate funds would be a detriment for most investors. But for those who want portfolio diversification, Fidelity Go® isn’t the right choice. In contrast Schwab Intelligent Portfolios offers nearly 20 diverse ETFs, as well as zero annual advisory fees (Schwab robo-advisor users must accept an 8% cash allocation).
Fidelity Go® users with balances under $25,000 also forgo access to live financial advisors, while no clients have access to tax-loss harvesting—both of which are available at many other robo-advisors. Ultimately, investors seeking a more comprehensive robo-advisor should probably look elsewhere.
