Fidelity offering model portfolios

Custodian believes these will help advisers scale their business and offer more financial planning

Jul 12, 2018 @ 1:55 pm

By Ryan W. Neal

Fidelity Investments is jumping on the model portfolio bandwagon.

The Boston-based custodian with $7 trillion in assets under advisement launched on Thursday the Fidelity Target Allocation Model Portfolios, which offers five different asset mixes that align to different risk profiles. The portfolios have a mix of Fidelity active and passive mutual funds.

The firm said model portfolios can provide advisers with a lower cost way to offer clients institutional-quality investment management.

(More: DOL fiduciary rule helped birth new model portfolio breeds)

In the face of fee compression, advisers are turning client assets over to model portfolios to scale their practice and offer more financial planning, said Matt Goulet, senior vice president of Fidelity Institutional Asset Management.

"The model portfolio space is a natural extension of our existing portfolio construction capabilities," Mr. Goulet said in a statement.

According to Fidelity's research, 81% of advisers use some form of model to construct client portfolios.

(More: TD Ameritrade finds momentum in its new model portfolio marketplace)

The firm also cited data from Cerulli Associates that show the managed accounts market is $6 trillion and expected to grow at a 14.5% annual rate. Model portfolios are intended to help advisers tap into those assets.


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