Fidelity Offers Free Savings Tools

Fidelity Investments said individuals need more help than ever and is stepping up its efforts with a personal finance campaign aimed at individuals in and out of its retirement plans.

Fidelity Investments unveiled new free tools for consumers in and out of its retirement plans, including online budgeting and portfolio guidance and seminars. The company said the new financial guidance program called Guide to Personal Savings (GPS) will help Americans get back on track with their finances. The program includes seminars, online tools (, and the launch of a new communications campaign from Fidelity.

Fidelity said its recent survey of 1,472 people found that 83% of Americans have no sought financial help in the past 12 months, primarily because they thought they couldn’t afford it. The firm also said that while many Americans are reining in spending and saving more, more than one-third (37%) don’t understand where to place their savings dollars.

“Clearly there is a misperception that financial help is only available to the affluent,” said Kathleen Murphy, president Fidelity Personal Investing, in a conference call Tuesday. “We believe this new initiatives will help Americans get back on track with their finances.”

Questioning Risk Tolerance

One aspect of the online tools offered to consumers is a portfolio review. Murphy said the current crisis has led many individual investors and retirement plan participants to question their risk tolerance. “Many individuals are looking at their asset allocation with a new set of eyes,” she said.

The financial crisis did not seem to make the firm question its own stance about equity allocation. Currently Fidelity’s target-date offering, Freedom Funds, has a 65-year-old invested 50% in equities at retirement, similar to other fund management offerings (see “What Is a Target Date?). John Sweeny, senior vice president, Personal Investing at Fidelity, said during the conference call that the firm did not decide to change this since last year. “We continuously evaluate the underlying investments and the underlying allocation and the funds are actively managed on a daily basis,’ he added. He said an individual with a long retirement horizon should continue to be invested in equities.

Savings Help

As part of the campaign, Fidelity said it plans to hold a series of weekly live Webinars for participants in its workplace savings plans. It also will work with employers through the year to host regional in-person seminars in major metro markets. Outside of workplace plans, Fidelity will also be increasing seminars at its Investors Centers nationwide.

Another aspect of the Fidelity campaign is a Savings Planner calculator that gives advice about saving toward future goals versus paying down debt. Using the tool, individuals can plug in a few personal details and five financial priorities (retirement, mortgage debt, credit card debt, college savings, and auto loans), and receive a suggested hierarchy about financial savings.

The calculator reflects Fidelity’s view of putting retirement savings as the first priority, before other savings such as paying down a high-interest credit card, according to the firm. It then also pushes for the importance of other savings, such as an emergency fund.

“Our savings point-of-view goes beyond retirement to help address an individual’s entire financial picture,” said Murphy in the Fidelity release. “For example, in an environment where 21% of Americans report having a member of their household laid off in the last 12 months, the existence of an emergency fund becomes critical, and must be factored into an overall financial plan if families are to be successful.”

Fidelity’s research found that nearly nine in 10 Americans (87%) say the current economic crisis has made them realize the importance of having an emergency fund, but less than half of Americans (46%) have such a fund. Behaviors may be changing though, with half (51%) of those who do not yet have an emergency fund indicating they plan to start one in the next six months, the company said.