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Portfolio > Portfolio Construction

Fidelity Expands Reach of Its Model Portfolios

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stock image of Fidelity Investments' sign (Photo: Shutterstock)

Just days after Schwab announced its Model Portfolios were added to the Riskalyze platform for the first time, Fidelity Investments said its model portfolios were added to the Orion Portfolio Solutions, Orion Communities and SMArtX Advisory Solutions platforms and integrated into Fidelity’s Modeling and Rebalancing tool on its Wealthscape fintech platform for advisors. 

(Related: Schwab Model Portfolios Added to Riskalyze Platform for Advisors)

The Fidelity Model Portfolios are now available on 16 different platforms  including Envestnet and Riskalyze Partner Stores, where they’ve been included since 2018, the year they launched.

More than 70% of financial advisors currently use asset allocation models, allowing them to spend more time working with clients on financial planning and other personal interactions, according to Fidelity.

In addition, one-quarter of advisors in a recent Fidelity study said portfolio modeling and rebalancing tools had become more valuable during the COVID-19 crisis as they look for ways to increase productivity.

Today, more than 6,000 financial advisors subscribe to Fidelity Model Portfolio updates, up from less than 2,000 last year. Matt Goulet, senior vice president of portfolio solutions at Fidelity Institutional, notes that those update subscriptions do not constitute actual usage  though many of these advisors ultimately may use the portfolios.

Fidelity has 21 model portfolios, including five target date models that consist exclusively of Fidelity funds and have on average outperformed 96% of their peers over the past 12 months ending Sept. 30, according to Morningstar. 

Its other model portfolios blend Fidelity funds with ETFs from BlackRock’s iShares and from State Street Global Advisors as well as active and passive funds.

“Model portfolios are only a starting point for dialogue between asset managers and advisors on portfolio construction,” Goulet says. “Ultimately the increased utilization of models by financial advisors will come through the dialogue about customization and the customization process itself. We can help advisors do that.“ 

Fidelity is now beginning to roll out customized model portfolios at the advisor and firm levels — portfolios that can substitute ETFs for mutual funds, favor certain portfolio managers, customize risk profiles and more. That customization will be the focus for next year, Goulet said.

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