Fidelity Expands Indie Adviser Access to Managed Accounts

The firm is expanding third-party access to the Portfolio Advisory Service at Work solution, a fiduciary managed account offering, to independent retirement advisers and recordkeepers.

Fidelity research suggests there has been a significant increase in the number of advisory firms “moving from accommodating retirement plan requests to growing their retirement plan businesses.”

It is a complicated trend unfolding for many reasons, Fidelity notes, but a big part of what is drawing more advisers into the space is the ability to leverage new technology solutions to deliver personalized fiduciary investment advice at significant scale.

With this market segment in mind, Fidelity announced it will allow wider third-party access to Portfolio Advisory Service at Work, a managed account offering that delivers personalized investment management for retirement plan participants.

“Many firms are focused on scale and looking to grow their retirement business efficiently while ensuring plan participants have the customization they need,” notes Michael Durbin, head of Fidelity Institutional Product. “We see PAS-W as a way to drive efficiency and outcomes at every level—for participants, plan sponsors, retirement advisers and recordkeepers.” 

Sangeeta Moorjani, head of Fidelity’s Workplace Managed Accounts business, suggests the offering “goes beyond the cookie cutter solutions available today and helps [advisers] grow and scale their businesses,” she adds. “An increasing number of employers and employees are recognizing that a managed account is a great option for people who may not have the experience or confidence to manage their own retirement savings, especially during times of market uncertainty.”

Advisers will be interested to see the list of independent recordkeepers who have already signed up for the service: Sentinel Benefits, Alliance Benefit Group of Michigan, and Alliance Benefit Group-Rocky Mountain. Each firm works on a system that integrates directly into the FIS Relius Administration platform. Many experts and analysts have suggested this type of an integrated third-party managed account approach could help traditional advisers, working collaboratively with the right recordkeepers, match the type of services promised by next-generation turnkey robo-advisers.  

Fidelity clearly agrees with that assessment, and the firm further points out that 97% of employees who have already joined the managed account solution have stayed invested and maintained their accounts.

The underlying investment management is offered through Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments Company. SAI acts as an Employee Retirement Income Security Act 3(38) investment manager and accepts fiduciary responsibility for making investment decisions on behalf of participants, Fidelity notes.

More information is available here