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Fidelity Investments, the firm that built a marketing identity around not selling your stock orders to the highest bidder, is now doing exactly that. The brokerage giant has begun accepting payment for order flow on equity trades, routing customer orders to wholesale market makers like Citadel Securities in exchange for compensation.
The policy change, disclosed in a regulatory filing earlier this year, drew significant attention after the Wall Street Journal reported on it in late August. Claims circulating online suggest the practice is generating roughly $10 million per month in revenue, though no public regulatory filing has confirmed that specific figure.
What payment for order flow actually means
Payment for order flow, or PFOF, works like this: instead of sending your buy or sell order directly to a stock exchange, your broker routes it to a middleman, typically a large market-making firm. That middleman pays your broker a small fee per share for the privilege of executing the trade. The market maker profits from the spread between buy and sell prices, your broker gets a revenue stream, and you, the retail investor, get what everyone promises is still a good deal.
Fidelity’s Q2 2026 order routing report confirms the firm is receiving compensation at rates of up to $0.0008 per share for marketable equity orders and up to $0.003 per share for non-marketable orders.
Before this shift, Fidelity only accepted PFOF on options trades. For equities, the firm leaned hard into its reputation for superior execution quality and price improvement, essentially arguing that customers got better prices precisely because Fidelity wasn’t taking kickbacks from market makers.
Why this reversal matters
For years, Fidelity occupied a unique position in the brokerage industry. While competitors like Schwab, E*Trade, and Robinhood openly accepted PFOF on stock trades, Fidelity wore its refusal like a badge of honor, regularly publishing statistics showing strong price improvement for customers.
The shift brings Fidelity into alignment with industry standards that have been entrenched since the wave of zero-commission trading that swept the brokerage world in 2019. When brokers eliminated trading fees, they needed alternative revenue sources. PFOF became the quiet engine powering “free” stock trading across the industry. Fidelity was the notable holdout. That holdout is over.
The SEC, particularly under Chair Gary Gensler’s tenure, scrutinized PFOF extensively over concerns that the practice creates conflicts of interest with brokers’ best-execution obligations. The European Union tightened regulations around PFOF practices. In the US, the practice remains legal.
What investors should watch
Retail investors should pay attention to Fidelity’s Rule 606 reports, which are quarterly disclosures that detail where customer orders are routed and what compensation the broker receives. These filings are publicly available and will provide the clearest picture of how this policy change affects execution over time.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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