Besides nabbing the top score in Overall Customer Experience, Fidelity held on to the top rung in four of the 13 categories — research tools, portfolio analysis and reports, investment research and educational resources. Plus, it garnered the highest rating in a new category, investment and retirement planning tools.
And Fidelity received the second-highest score in all eight of the other categories, spanning from ETF choices to trade reliability to mobile trading platforms.
One of the best examples of how Fidelity's vast knowledge of the capital markets translates into better value for its retail customers is perhaps its price improvement feature on all equity trades. Based on an independent study commissioned by Fidelity, over a 12-month period through November 2016, the average discount on equity trades involving a minimum 1,000 shares was $10.97 for Fidelity customers vs. average savings of just $1.90 per trade industrywide in the 12 months through Sept. 30, 2016.
That savings represents a better buy price than the national market system's best offer and a better sell price than the national best bid price at the time of the order. The average price improvement is also larger than the $7.95 that Fidelity charges for each equity order. How does Fidelity pull this off?
According to Subramaniam, Fidelity has a capital markets group that specializes in order execution, and it actively seeks the best venues for executing customer trades. "We try to create competition among market makers," he said. "We take a lot of pride in that price improvement work."
A Fidelity investor, upon logging in, can easily track these trade execution savings on a month-to-date and year-to-date basis.
Here are other milestones that Fidelity hit in 2016 in its drive to be the No. 1 destination for retail investors:
More incentives to save for retirement: For customers who open a new IRA, Fidelity matches contributions of up to $1,950 each year for three years, and the reason is simple. "We'd like people to save more for retirement," Subramaniam said.
Fidelity also now offers a Visa credit card with no annual fee and a 2% cash-back reward for all purchases. Subramaniam says that a family that spends between $30,000 to $40,000 per year can generate $800 in cash back each year, enough money over time to pay a good deal of a child's college tuition costs for a year.
More commission-free investment vehicles: 91 ETFs are now commission-free, triple the number from four to five years ago. They include all 18 core iShares ETFs. Fidelity also offers 3,600 mutual funds with zero transaction fees.
More mobile services: Subramaniam says that the number of check deposits made by simply taking a smartphone snapshot of the check has jumped 250% over the past three years.
A completely overhauled research section: Its web pages are now fully responsive to the type of internet-enabled device being used, and contain more relevant data on specific stocks in a customer's account. Subramaniam calls it "personalized data." He adds, "It's really about driving well-informed decisions by the customer."
Lower bond commissions: According to Subramaniam, a study found that Fidelity can help customers save as much as $14 for every bond with a $1,000 face value traded. So a buyer of $100,000 worth of corporate debt can save as much as $1,400 in transaction fees.
More robust ETF screening: Last year, Fidelity debuted a thematic ETF screener, allowing customers to search exchange traded funds by category, such as international and fixed income.
A more useful platform for active traders: Fidelity enhanced its active trading platform's dashboard so that a user can quickly spot key macroeconomic news and a heat map to spot unusual buying and selling across various industries and sectors in the equity markets.
Fidelity engaged with a group of active traders to co-create, test and improve the platform. It also launched a "strategy desk" in which customers can call in to receive one-on-one or one-to-many coaching on advanced trading such as options.
One more way that a retail customer benefits by having a Fidelity account is the immediate access to perspectives from Fidelity's seasoned team of money managers — or the buy side.
In the Jan. 4 article "Bonds 2017: A New Dynamic," found in the Investing Ideas section of "Fidelity Viewpoints," Ford O'Neil, who manages the Fidelity Total Bond Fund (FTBFX), singles out the financial and energy sectors as investing opportunities in the corporate bond space. Why?
He, like many Wall Street observers, sees the new Donald Trump administration as likely to take away some of the burdensome and costly regulations placed on companies in both fields during the eight-year term of former President Obama.
"Many companies have told me that regulatory burdens are among the largest challenges they've had to deal with in the last eight years," O'Neil was quoted as saying. O'Neil is not related to William O'Neil, IBD's founder and chairman.
O'Neil stresses caution in agency mortgage-backed securities because they "are trading at valuations that are closer to Treasuries than what is typically seen. In other words, the yield spread between these two categories of bonds has tightened," according to the article.
A potential rise in inflation is a key theme for 2017. O'Neil suggests not just TIPS (Treasury inflation-protected securities) but also floating-rate loans, while holding credit risk, offer relatively high yields and could counter the effects of higher prices.
"If the Fed raises rates more aggressively than expected, floating-rate loans probably won't be hurt as much as traditional bonds because floating rate payments are indexed to interest rate levels," Fidelity wrote.