Products July 27, 2016

Fidelity Go Digital Platform Competes With Robo Advisers

Fidelity's digital investing platform competes with robo advice providers by adding human component.
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Fidelity has launched Fidelity Go, a digital-based solution to help Americans invest their money. The program combines a professionally-managed portfolio with an easy-to-use digital dashboard.

Requiring a minimum investment of $5,000, the program offers access to investment professionals, rather than an automated robo algorithm, who will construct, monitor and rebalance users’ portfolios. It offers a low advisory fee and invests in Fidelity Index Funds Premium Class and Institutional Class shares. Current all-in costs, including the advisory fee and underlying fund fees, range from 35 basis points (bps) to 40 bps. The program is accessible via smartphones, tablets and desktop computers.

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Users first visit Fidelity.com/Go, where they are asked questions about their goals, current financial situation and risk tolerance. Fidelity Go then suggests an investment strategy based on the investor’s needs. Geode Capital Management, which has served as the subadviser to the Fidelity equity index funds, invests, monitors and manages the portfolios. Fidelity Go service representatives are available via online chat and phone to provide assistance.

Considering this announcement in the overall robo advisory marketplace, Kyle Ramsay, head of investing and retirement at NerdWallet.com, says, “Recent entries by Fidelity and E-Trade serve as further validation that low-cost, automated investment management is here to stay. That is great news for the consumer, as these offerings can save you time and money through automation and lower fees. As automation and scale make it even cheaper to provide digital investment advice, one can easily imagine that similar offerings will be added to the advisory services available from most large financial institutions.”

Data & Research July 26, 2016

Social Security is Key, Even for Affluent Investors

For nearly one-third of affluent investors, Social Security will provide half their retirement income, according to a study.
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Social Security is critical for retirees, even for affluent investors age 55 and older, Spectrem Group found. For nearly one-third of those with a net worth between $100,000 and $1 million, Social Security will provide half or more of their retirement income, according to the research firm.

Sixty-three percent of affluent Americans think there shouldn’t be an income limit to receive benefits, and 79% of those with a net worth of $5 million or more are opposed to means-testing.

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Only 31% of all investors have discussed Social Security with their adviser, and that decreases to 24% for investors with a net worth between $100,000 to $1 million. “With a sizeable portion of investors relying on Social Security income in retirement, and an array of options for when to begin receiving benefits, advisers must help clients navigate the program,” Spectrem Group says.

Spectrem’s findings are based on a survey of 634 people this past February.

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