Fidelity Investments has joined the growing group of asset managers offering model portfolios for advisor clients.
Fidelity Model Portfolios debuted Thursday with an initial offering of five different asset mixes called Target Allocation Model Portfolios. The portfolios consist entirely of Fidelity mutual funds with stock/bond allocations based on different risk profiles, ranging from a conservative 20% stocks/80% bonds portfolio to an aggressive 85% stocks/15% bonds mix. In between are stock/bond ratios of 40/60, 60/40 and 70/30.
There are 7 to 12 funds in each portfolio chosen from a group of 39 Fidelity funds, both active (Fidelity Advisor funds) and passive (Index Funds). Target allocations will rebalance quarterly and the average expense ratios range from 36 to 40 basis points. There are no additional advisory fees.
Fidelity is marketing Model Portfolios as a means for advisors to deliver the services their clients want, which stretch well beyond investment management and asset allocation, while operating in an environment where fee compression is rampant.
“With this new offering, advisors can feel confident that they’re delivering institutional-quality portfolios, and they can spend more time focusing on services that can help them deliver even higher value, including helping their clients achieve their life goals,” said Matt Goulet, senior vice president, Fidelity Institutional Asset Management, in a statement. “Advisors are increasingly demanding choice,” Goulet told ThinkAdvisor.
All financial advisors can access Fidelity Model Portfolios, not just advisors who use Fidelity’s platform.