Fidelity Investments having issues

[ochotona]

Fidelity has been hit by check kiting schemes launched off of TikTok, the same kind that previously afflicted Chase.

They extended hold times for deposits to weeks. Mostly that's from paper check scans on the app, also any time fund are pulled from outside places into Fidelity, but one person swears their payroll direct deposit was put on a several weeks hold. If true, that's super bad.

Billpay and debit were removed for some people, I guess those were part of the scamming, and new debit card requests are just frozen.

Fidelity communicated nothing at all. The way people found out is after their mortgage / rent / other bills didn't get paid, or their debit card got rejected at the grocery store. They buried all of the complaints into a megathread, with more than 1,000 comments.

I haven't had any issues, in fact I plan to keep using their Cash Management account, HSA, and Fidelity Charitable, but my eyes are opened. They definitely have an unhelpful customer relations culture at times. I'm moving my large accounts back to Schwab from whence they came. I still want to be diversified across several FIs, and if you use Fidelity Cash Management very carefully, I doubt you'll have problems. But it's sure disheartening to hear about other customers.

They totally screwed up their retirement planning tool. It was fantastic before, now you can't create reports, you get a 1-pager. They Schwabified it, basically... dumbed-it down for new investors. Made it useless for pre-retirees. I have to use external tools.

My main worry is what if they daughter takes control as Attorney-In-Fact (POA) someday, will the Fidelity security "back-office" (accountable to no one; Advisors cannot intervene) give her a huge hassle? She's not known to Fidelity now (not a customer), but very well known to Schwab. If I have all my assets locked away at Fidelity, and if she has a problem with the back-office because she'd be requesting a new online account, then I'm screwed.

Fidelity apparently gives families the run-around when they inherit assets, the disbursement can take months or a year, even when everything is properly documented. They seemingly just don't care. It's a heartless compartmentalized bureaucracy, at least more so than Schwab. All firms are like that to some degree. After watching their Reddit posts for years, Fidelity is definitely worse.

[I Shrugged]

That's very interesting. We have stuck with VG through thick and thin, even as many people were saying on Bogleheads that they were giving up and moving to Fidelity. VG has definitely struggled to keep up with its growth, but I've never felt anything like what you posted there.

[I Shrugged]

Isn't Schwab reportedly struggling? I have very limited experience with them but one thing that stood out was that they try to keep you cash in a "cash" status rather than in a low cost money market fund. It seemed I would have to move money from cash to a money market fund every time some cash became available.

[ochotona]

Default low interest cash sweep is a Schwab drawback. You have to place a manual order for a Money Market Fund or SGOV. It's an irritation definitely.

[sophie]

Fidelity's platform has been subject to glitches and inefficiencies for years. But, they're still the best game in town as an investment bank. I haven't tried Schwab, but I've seen plenty of complaints about their services on various forums including this one. Mostly about key things you can't do that make life difficult. And I don't think they can do ANY of these things that I've come to depend on at Fidelity:

1) they have an HSA account
2) they allow me to create multiple brokerage accounts that helps with organization and that I can independently link or firewall as needed
3) it's super nice to have all my different types of accounts except employer 403bs all under one roof
4) you can have a checking/savings account that contains your money market or other investments of choice, even T bills if you like. That's a powerful setup.
5) they have an account-specific lock feature that I believe is unique - despite its obvious importance in this age of massive fraud, it doesn't exist anywhere else to my knowledge. I've asked some institutions directly and they say "nope never heard of that." I keep my retirement and investment accounts locked, and let the "checking/savings" spending account remain unlocked. I can instantly lift & replace the lock at need for specific accounts. Since cash transfers between accounts are instant, the lift/transfer/re-lock procedure happens in one sitting and done in a couple of minutes.

All income goes directly to my primary bank, then I transfer funds to the Fidelity spending account via ACH - never a problem. Credit card bills are paid from Fidelity via ACH transfer with no recent problems. There was a problem with a check I wrote against the Fidelity spending account but it was not Fidelity's issue, it turned out to be the receiving bank holding the check for a ridiculously long period of time after Fidelity had paid out the funds.

Maybe Schwab will work out well for you, but give some thought to keeping your Fidelity account and using it like I do.

[dualstow]

Adding to what Sophie said,
I only have a Fidelity account because they set up a Roth Solo 401K for me back when Vanguard couldn’t. { edited Roth to Solo }
I have come to appreciate their site and services more than Vanguard’s (alhtough Vanguard has a new boss and he’s improving things).

They also have a kind of Vault of Secrets. I forget what the true name is, but it’s not as cool as Vault of Secrets. You can upload document images, passwords, etc, for your loved ones to access if something happens to you.

[ochotona]

They also have a kind of Vault of Secrets. I forget what the true name is, but it’s not as cool as Vault of Secrets. You can upload document images, passwords, etc, for your loved ones to access if something happens to you.

Oh, their document vault is secured only with SMS two-factor authentication! I'm not going to put a thing into it.

I agree though, Fidelity has the best HSA, the Cash Management is fantastic if you're not one of the people having issues with it, and I think the Donor Advised Fund is better than Schwab's. I'm going to keep using them for all of those things. But I still want to move the big pots of IRA money back to Schwab soon.

[dualstow]

That’s good to know about the SMS-only limitation. I try to get sites to use Authy, but … <shrug>

[eliasx999]

Fidelity has been hit by check kiting schemes launched off of TikTok, the same kind that previously afflicted Chase.

They extended hold times for deposits to weeks. Mostly that's from paper check scans on the app, also any time fund are pulled from outside places into Fidelity, but one person swears their payroll direct deposit was put on a several weeks hold. If true, that's super bad.

Billpay and debit were removed for some people, I guess those were part of the scamming, and new debit card requests are just frozen.

Fidelity communicated nothing at all. The way people found out is after their mortgage / rent / other bills didn't get paid, or their debit card got rejected at the grocery store. They buried all of the complaints into a megathread, with more than 1,000 comments.

I haven't had any issues, in fact I plan to keep using their Cash Management account, HSA, and Fidelity Charitable, but my eyes are opened. They definitely have an unhelpful customer relations culture at times. I'm moving my large accounts back to Schwab from whence they came. I still want to be diversified across several FIs, and if you use Fidelity Cash Management very carefully, I doubt you'll have problems. But it's sure disheartening to hear about other customers.

They totally screwed up their retirement planning tool. It was fantastic before, now you can't create reports, you get a 1-pager. They Schwabified it, basically... dumbed-it down for new investors. Made it useless for pre-retirees. I have to use external tools.

My main worry is what if they daughter takes control as Attorney-In-Fact (POA) someday, will the Fidelity security "back-office" (accountable to no one; Advisors cannot intervene) give her a huge hassle? She's not known to Fidelity now (not a customer), but very well known to Schwab. If I have all my assets locked away at Fidelity, and if she has a problem with the back-office because she'd be requesting a new online account, then I'm screwed.

Fidelity apparently gives families the run-around when they inherit assets, the disbursement can take months or a year, even when everything is properly documented. They seemingly just don't care. It's a heartless compartmentalized bureaucracy, at least more so than Schwab. All firms are like that to some degree. After watching their Reddit posts for years, Fidelity is definitely worse.

Wow, that sounds like a real mess for those affected. I haven’t had issues with Fidelity myself either, but the lack of communication is definitely concerning. It’s good you’re staying diversified across multiple institutions that seems like the safest bet these days.

[dualstow]

My main activity with Fidelity is a credit card. I guess those weren’t affected, or at least mine wasn’t.

[ochotona]

All of my retirement accounts are back at Schwab... still using Fidelity Cash Management, Brokerage (taxable), HSA, Fidelity Charitable, the Fidelity credit card issued by Elan. No issues at either place to date but I feel better about my present config.

[dualstow]

I see a hot thread at reddit about people’s $ being held hostage from mid-December to mid-January.

[yankees60]

I see a hot thread at reddit about people’s $ being held hostage from mid-December to mid-January.

On what basis? Given that it is Fidelity shouldn't that be a more wide-open story among many media?

[barrett]

I only have a Fidelity account because they set up a Roth 401K for me back when Vanguard couldn’t.

Just seeing this now, dualstow. Really? A Roth 401K and not just an Independent 401K??? If true I would be stunned as setting up a Solo 401K Roth account is something that I have been tryin to accomplish at Fidelity for years. Or maybe there is a difference between what you are calling a "Roth 401K" and I am calling a "Solo 401K Roth"?

Here is an Investopedia link explaining the two:

https://www.investopedia.com/terms/i/in ... t_401k.asp

[yankees60]

I only have a Fidelity account because they set up a Roth 401K for me back when Vanguard couldn’t.

Just seeing this now, dualstow. Really? A Roth 401K and not just an Independent 401K??? If true I would be stunned as setting up a Solo 401K Roth account is something that I have been tryin to accomplish at Fidelity for years. Or maybe there is a difference between what you are calling a "Roth 401K" and I am calling a "Solo 401K Roth"?

Here is an Investopedia link explaining the two:

https://www.investopedia.com/terms/i/in ... t_401k.asp

When we had to transfer our Vanguard Solo 401(k)'s last summer ... I know that the Roth versions of them was not available at Fidelity.

[dualstow]

Thank you for catching that, Barrett. I meant a Solo 401(k) and I will edit that.
I later set up a Roth IRA (not 401k) at Vanguard.

[dualstow]

https://www.wsj.com/finance/investing/w ... o-6c095df2

In an email, the Fidelity representative spelled out seven ways Armbruster could make up the shortfall. Several involved what the rep called “asset shift,” or moves into investments run by Fidelity affiliates—which would generate more revenue for the giant firm regardless of whether they were the best option for Armbruster’s clients.

Unsurprising, but always interesting to read.