Investing your hard-earned money is an important decision that requires careful research. Two of the biggest names in the investment industry are LPL Financial and Fidelity Investments. But which one is the better choice for your investment portfolio?
In this comprehensive guide, we’ll compare the pros, cons, features and fees of LPL Financial and Fidelity to help you determine which firm best aligns with your investment goals and preferences.
A Brief Comparison Table
| Category | LPL Financial | Fidelity Investments |
| Account Minimum | Varies by advisor | Many funds with no minimum |
| Fees | Vary by advisor, may be high commissions | No fee proprietary funds, $4.95 stock trades |
| Financial Advisors | Large network of dedicated advisors | Limited personalized guidance |
| Investment Products | Stocks, bonds, funds, ETFs, more | Stocks, bonds, funds, ETFs, more |
| Mutual Funds | Mostly third-party funds | Hundreds of no-fee proprietary funds |
| Research and Tools | Varies by advisor | Robust proprietary tools and research |
| Reputation | 30+ years experience, less assets than rivals | 75+ years experience, one of the most trusted brands |
| Customer Service | Mixed reviews | Mixed reviews |
Overview Of LPL Financial
LPL Financial is one of the largest independent broker-dealers in the country. Founded in 1989 and headquartered in Boston, LPL Financial works with a network of over 17,000 financial advisors across the U.S.
Some key facts about LPL Financial:
- Over 4.6 million client accounts and over $1 trillion in custodied assets
- Offers brokerage and advisory services, including stocks, bonds, mutual funds, annuities, insurance, and more
- Advisors have access to LPL research, investment platforms, and business consulting
- Fee structure varies by advisor – fees may include commissions, account fees, advisory fees
Pros
- Large network of financial advisors across the U.S.
- Advisors have freedom and flexibility to run their practices
- Robust platform and investment products for advisors
- Ongoing advisor training and support services
Cons
- Varies by advisor, but fees may be high with commissions-based accounts
- Mixed reviews of customer service/responsiveness
- Limited proprietary investment products compared to some competitors
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Overview Of Fidelity Investments
Fidelity is one of the largest and oldest investment firms in the world. Headquartered in Boston, Fidelity offers investment and wealth management services to over 40 million customers.
Some key facts about Fidelity:
- $11 trillion in total customer assets
- Leading provider of 401(k) plans, with over 35 million 401(k) accounts
- Offers brokerage, managed accounts, advisory services, IRAs, and more
- Proprietary mutual funds with no transaction fees
Pros
- Long track record as a trusted provider of investment products and services
- Robust investment research from 200+ research professionals
- Wide range of proprietary mutual funds and index funds with no fees
- Competitive pricing for stock and ETF trades
- Strong customer support resources and guidance
Cons
- Account fees can be high for some managed products
- Mix of negative and positive reviews of customer service
- Limited personalized advice compared to independent advisor firms
Comparing LPL Financial And Fidelity
Now let’s directly compare LPL Financial and Fidelity across some key factors:
- Investment Products and Services
LPL offers stocks, bonds, mutual funds, ETFs, annuities, alternative investments, insurance, and more. Advisors can build customized portfolios based on a client’s goals.
Fidelity also provides stocks, bonds, mutual funds, ETFs, annuities and more. Fidelity is best known for their mutual funds, with several hundred no-fee, no-minimum funds.
Winner: Tie – both offer comprehensive investment products and services. Fidelity has a stronger proprietary mutual fund offering, while LPL may provide more portfolio customization through its advisor network.
- Account and Advisory Fees
LPL fees vary widely by advisor. Expect to pay trading commissions, account fees, advisory fees, 12b-1 fees, and more. Accounts can be commission-based or fee-based.
Fidelity has no minimums or fees for many mutual funds. Stock and ETF trades are competitively priced at $4.95. Managed account fees start at 0.30% – 0.65%. Account and advisory fees may be higher than rivals.
Winner: Fidelity – while managed account fees are high, Fidelity wins for no minimums and fees on funds and competitively priced stock trades. LPL costs are opaque and may run high.
Also Read: Comparison Between Edward Jones And Raymond James.
- Financial Advisors and Customer Service
LPL has a large nationwide network of financial advisors. Support and responsiveness varies by advisor. LPL as a company has mixed reviews on customer service.
Fidelity has in-house professionals and phone support, but less personalized guidance compared to LPL’s dedicated advisor model. Customer service reviews are mixed.
Winner: LPL – LPL’s dedicated financial advisor model gives them the edge here. But advisor quality and fit varies, so choose carefully.
- Research and Tools
LPL provides advisors access to trading tools, research, compliance support and more. Offerings vary by advisor.
Fidelity has robust proprietary research and 100+ professionals. Offerings include market insights, planning tools, education, and more.
Winner: Fidelity – LPL’s tools depend on your advisor. Fidelity provides industry-leading proprietary research and tools.
- Reputation and Track Record
LPL has over 30 years of experience supporting independent financial advisors. They’ve built a strong brand but still lag big rivals in assets and accounts.
Fidelity is one of the most established and trusted names in the financial services industry with over 75 years of experience.
Winner: Fidelity – Fidelity is hands-down the winner when it comes to brand reputation and longevity.
Also Read: Comparison Between UBS And Morgan Stanley Wealth Management.
Frequently Asked Questions (FAQ)
There is no definitive “winner” – it depends on your preferences. LPL Financial has a dedicated advisor model, so may be better if you want personalized guidance. Fidelity wins on proprietary mutual funds, research, brand reputation and DIY approach.
No, LPL Financial and Fidelity Investments are completely separate and independent companies. They are competitors in the investment industry.
Yes, LPL Financial is one of the largest independent broker-dealers. They have over 30 years of experience supporting financial advisors. However, Fidelity has a longer track record and higher assets under management.
LPL Financial fees vary significantly by financial advisor. Some advisors charge high commissions, account fees, 12b-1 fees and advisory fees. Fee-only RIAs may have more competitive asset-based fees. Always vet advisor fees carefully.
Also Read: Comparison Between Merrill Lynch And Northwestern Mutual.
The Verdict
If you want personalized guidance and advisor relationships, LPL Financial may be a better choice. But vet advisors carefully, as quality varies.
If you want robust research, tools and proprietary funds, Fidelity is hard to beat with their range of offerings. But lower level of personalized services.
Both LPL and Fidelity offer comprehensive investment products and services. Fidelity tends to win on fees, brand reputation, and proprietary tools and research. LPL’s advisor model creates more personalized guidance and portfolios.
Do you want to be in complete control of your investments and have robust DIY research? Go with Fidelity.
Do you value an advisor relationship to develop plans and portfolios? LPL Financial may be a better fit.
And there you have it – a comprehensive comparison of LPL Financial Vs. Fidelity Investments!
The ‘winner’ will depend on your personal preferences and investment approach. Be sure to carefully consider fees, advisors, research, tools and overall reputation as you evaluate both firms.