While the financial services industry waits for Fidelity Investments to eliminate commission trades for stocks, ETFs and options, as Schwab, TD Ameritrade, E-Trade and Ally Financial announced last week, Fidelity instead is trimming fees on many of its direct-sold 529 savings plans.
Effective Oct. 1, Fidelity cut fees on 15 of 22 529 plan portfolios, both actively managed and passive index-based portfolios. Most of the cuts were for 1 to 2 basis points, but one portfolio — the conservative Fidelity Index 529 fund — had a 5 basis-point cut.
Expense ratios for the actively managed 529 portfolios now range between 31 and 78 basis points, and investors are charged an additional 20 basis points for a program and state fee.
Expense ratios for the passive index 529 portfolios range between 4 and 5 basis points, and investors pay another 9 basis points for the program and state fee.
For both types of portfolios, investors can choose among different target dates, up to the year 2036, or different risk levels — aggressive growth, moderate growth and conservative.
“We’re lowering fees on the majority of our 529 portfolios because we’re committed to do even more to help those who choose to invest their college savings with us,” said Eric Kaplan, head of target date and 529 product at Fidelity Investments.