Fidelity Investments vs Pepperstone — which broker is better?

Pros

• USD 0 online US stock and ETF commissions, and Fidelity does not accept payment for order flow on equity orders
• Zero-expense-ratio index mutual funds (the FZROX family) — no other major US broker matches this on fund cost
• Options exercise and assignment cost USD 0, and buy-to-close orders at USD 0.65 or less are free
• No outgoing account transfer fee, no domestic wire fee and no inactivity or maintenance fee
• Idle cash defaults into the SPAXX money market fund rather than a near-zero bank sweep, so uninvested balances earn a market-linked yield without manual intervention
• International trading in 25 markets with settlement in 16 currencies, at GBP 9 for the UK and EUR 19 for euro-zone markets
• Best-in-class research: roughly seven third-party report providers plus the proprietary Equity Summary Score, and consistently rated first for research and education
• Fractional share investing from USD 1 across a broad US universe, not just large-cap index constituents

Cons

• No futures, no futures options and no retail forex — a hard stop for macro and commodity traders
• No paper trading or simulator, so there is no way to rehearse a strategy inside the platform
• Crypto is limited to Bitcoin, Ethereum and Litecoin with a spread of up to 1% built into the price, and is not SIPC-protected
• New accounts are effectively US residents only; Fidelity states it does not open accounts for customers residing outside the United States and restricts existing accounts when clients move abroad
• Charting and drawing tools in Trader+ are weaker than thinkorswim's, and there is no backtesting engine
• The FX markup on international trades settled in USD starts at a full 100 basis points below USD 100,000 — expensive for small foreign orders

Pros

• Razor all-in EUR/USD cost of about 0.8 pips - a 0.0 to 0.1 pip raw spread plus USD 3.50 per lot per side
• No inactivity fee, no account-keeping fee and no account closure fee, confirmed on Pepperstone's own costs page
• Five execution venues on one account: MT4, MT5, cTrader, TradingView and the in-house Pepperstone Platform
• Three top-tier licences - FCA 684312, ASIC AFSL 414530 and BaFin 151148 - so most clients contract with a tier-1 supervised entity
• EUR, CHF and GBP accounts at every European entity (UK, Cyprus, Germany), which removes a layer of conversion cost for European clients
• Account approval typically inside 4-8 hours, with a USD 10 minimum first deposit and no minimum by bank transfer
• Active Trader rebates take the all-in EUR/USD cost down to roughly 0.26 pips at high volume
• UK clients get the same book as spread bets, with EUR/USD from 0.6 points

Cons

• Everything is a CFD. You never own the share or ETF, so there are no voting rights, no transferable holdings and no dividend tax reclaim
• Overnight financing on index and share CFDs is charged at 2.5 percent over the benchmark rate, which quietly punishes anyone holding for more than a few weeks
• No options, futures, bonds or mutual funds - the product shelf is narrow next to a full-service broker
• Education is a webinar and article archive rather than a curriculum; ForexBrokers.com marks it down for having no interactive courses or quizzes
• FIX API access is reported to need around USD 250 million in monthly volume, so systematic traders are confined to MT4, MT5 or cTrader automation
• Pepperstone publishes no headline currency conversion rate, which makes the true cost of a US share CFD from a EUR account hard to model before you trade