I'm not referring to the up-sell. They can upsell a cheaper service. Having a free service means that every customer is extra cost. When you sell something, however little you charge, you still charge just above recurring cost (unless you're a startup). If you don't charge, then every customer is an expense. Trusting that your sales team can up-sell hard enough to compensate for the recurring cost of a customer is wishful thinking.
You're assuming that all fidelity customers are competent investors, when in fact many (most?) of them are customers of fidelity only because fidelity is the custodian for their company retirement plans. Many (most?) of these folks had no idea why a ER > 1.0% was not good for them, but now that the word is out, this could easily be a gimmick to convince more folks to choose fidelity for servicing retirement plans and investments. So, 1) pick trendy topic among casual (retirement) investors, 2) blow competition out of water by offering it for free to get their attention, 3) gain trust and additional business from casual investors
My employer uses fidelity for retirement plans (so I'm a customer, whether I like it or not), and I'm bombarded by emails/communications very regularly to sign up for various services from fidelity for 'planning for my future'. These services ultimately cost a lot of money. Many of my coworkers have signed up.
Running ads pays 0, well below recurring cost. It's an expense. Free tier is an expense. Many products have a free teir, such as AWS, Google Drive, and Trader Joe's samples.
