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Fidelity Opens Managed Accounts to More Advisors

May 18, 2017

In a move to keep up with an anticipated jump in demand for fee-based accounts, Fidelity is expanding its “workplace managed accounts” whether or not they custody with the firm, WealthManagement.com writes.

Fidelity defines workplace managed accounts as follows: “Unlike other 401(k) and 403(b) investment choices, managed accounts provide a model portfolio that helps participants stay on track toward retirement,” it says in a leaflet called “The Growth of Workplace Managed Accounts.”

Adds Fidelity: “In fact, recent industry figures show that the number of plan sponsors offering managed accounts grew by more than 30% from 2008 to 2012.”

The firm will act as the fiduciary for financial advisors and recordkeepers using Fidelity’s managed accounts through Strategic Advisors, the RIA arm of Fidelity’s asset-management unit, according to the web publication.

The firm expects demand for fee-based managed accounts to pick up if the Department of Labor rolls out its fiduciary rule, which requires retirement brokers to put clients’ interests first, Fidelity executive Michael Durbin, tells WealthManagement.com.

Several aspects of financial advice once deemed “education” will be treated as fiduciary advice under the rule, says Durbin.

In making workplace managed accounts more widely available, Fidelity hopes to reach advisors with ambitions to expand their retirement-plan business. With Fidelity acting as fiduciary, advisors will be able to do this in “a very compliant and scaled way,” Durbin tells WealthManagement.com.

Fidelity is first rolling out access to recordkeepers on its FIS Relius recordkeeping platform and the advisors who already use it, but will expand to more recordkeepers in time, writes Wealth Management.

So far, Fidelity has signed up Sentinel Benefits, Alliance Benefit Group of Michigan and Alliance Benefit Group-Rocky Mountain, according to the web publication.

The DOL’s fiduciary rule, meanwhile, has been delayed from April until at least June and still faces the prospect of an outright repeal under U.S. President Donald Trump’s administration.

By Alex Padalka
  • To read the WealthManagement.com article cited in this story, click here.