Review of Fidelity Personal and Workplace Advisors

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Updated on Thursday, April 30, 2020

Fidelity Personal and Workplace Advisors is the registered investment advisory division of its behemoth parent company, Fidelity Investments. This division of nearly 8,200 investment advisors and researchers offers portfolio management and financial planning services for middle- and upper-income individuals, as well as some corporations, pension plans and charitable organizations. All together, Fidelity Personal and Workplace Advisors operates more than 1,100 offices and nearly $453.3 billion in assets under management (AUM).

All information included in this profile is accurate as of April 30, 2020. For more information, please consult Fidelity Personal and Workplace Advisors’ website.

Assets under management: $453,297,086,677
Minimum investment: $50,000 for portfolio management and financial planning services
Fee structure: A tiered percentage of AUM for investment management; a flat fee for financial planning, with a maximum fee of $20,000
Headquarters:245 Summer Street, V2A
Boston, MA 02210
(617) 563-7000
Fidelity.com

Overview of Fidelity

Fidelity Personal and Workplace Advisors, a registered investment advisory firm, is fairly new to the advisory scene, forming in 2017 to serve retail and workplace clients. However, its parent company FMR LLC, collectively known with its affiliates as Fidelity, has roots dating back to 1946, when Fidelity Management & Research Company was founded by Edward C. Johnson 2d.

Today, the privately owned company is run by Abigail “Abby” Johnson, the third generation of the family to lead the company. Headquartered in Boston, Fidelity Personal and Workplace Advisors has offices nationwide, with more than 1,100 in total.

All of Fidelity Personal and Workplace Advisors’ nearly 8,200 employees perform investment advisory and research functions, helping to manage the division’s $453.3 billion in AUM.

What types of clients does Fidelity serve?

Fidelity Personal and Workplace Advisors serves a mix of clients, largely individuals and high net worth individuals, plus some pension and profit-sharing plans, charitable organizations, corporations and other businesses.

Clients must reside in the United States and have a valid U.S. permanent mailing address and taxpayer identification number. Minimum investment requirements at Fidelity vary depending on which level of service clients opt for:

  • Digital advisory services: For those interested in the firm’s online advisory program, they must maintain a balance of just $10, though the addition of digital financial planning alongside investment management requires a higher minimum investment.
  • Customized financial planning and discretionary investment management: In-person help and customized accounts require a higher minimum investment, starting at $50,000 and ranging higher depending on client preferences and the investment strategy selected.
  • Fidelity Private Wealth Management: To access the firm’s premium private wealth services, which offer “enhanced” investment management and/or financial planning, clients typically must invest a minimum of $2 million and have at least $10 million in investable assets.

Services offered by Fidelity

Fidelity Personal and Workplace Advisors offers discretionary portfolio management (meaning it does not consult the client for each trade), as well as advice and guidance to reach certain financial goals held either in person or over the phone. The financial planning services are often geared toward a specific life event, such as saving to buy a house or pay for college. Fidelity representatives can offer strategies or tactics to help clients successfully reach their goals.

The premium level of service that Fidelity offers is through the Private Wealth program, which requires a $2 million minimum investment. Clients receive enhanced portfolio management and financial planning services, such as access to a dedicated investment manager to create a tailored portfolio across all of a client’s accounts, as well as a dedicated team of specialists to help with topics such as estate planning or employee benefits.

For exposure to individual securities, the team also offers separately managed accounts that offer focused, single-asset class portfolios. There are eight investment strategies total, each designed to meet a specific objective, such as dividend income or tax-free investment income. The minimum investment is usually $200,000 for equity strategies and $500,000 for fixed income strategies.

Finally, for clients comfortable with online-only services, the firm offers two digital advisory programs. Fidelity Go provides simple portfolio management, while Fidelity Personalized Planning & Advice includes portfolio management, as well as financial planning, through the web or over the phone; in both cases, clients will answer a few questions about their age, goals, risk tolerance and income. Then a proprietary algorithm produces a long-term asset allocation recommendation that may include stocks, bonds and short-term investments, and client money is generally invested in Fidelity Flex mutual funds. The Go Program requires $10 to start investing, while the Personalized Planning & Advice program requires a minimum of $25,000.

Here is a full list of services offered by Fidelity Personal and Workplace Advisors:

  • Investment advisory services/portfolio management (separately managed and wrap fee accounts; mainly discretionary)
  • Financial planning
    • Retirement planning
    • Education planning
    • Insurance planning
    • Employee benefits planning
    • Estate planning
    • Tax planning
  • Educational seminars and workshops

Separate from its registered investment advisory unit for individual investors, parent company Fidelity also offers many other services across the financial services industry, including investment advisory, brokerage, banking and insurance businesses. Clients can choose to place investment trades individually through Fidelity’s brokerage business and pay per transaction, instead of choosing one of the flat fee advisory programs described here.

How Fidelity invests your money

To manage your portfolio in a discretionary manner — meaning clients do not approve each individual trade — Fidelity taps its affiliate firm Strategic Advisers. Based on your investment goals, risk tolerance, time horizon and other assets, Strategic Advisers will propose a long-term asset allocation for your account.

Accounts may include a mix of affiliated and unaffiliated mutual funds and exchange-traded products and, in certain tax-sensitive accounts, even individual securities. Retirement accounts in particular are generally invested in a model-based portfolio of mutual funds and exchange-traded products. Some of the mutual funds or exchange-traded product offerings give clients exposure to real estate, commodities, inflation-protected debt securities and other alternative investments. Accounts will be rebalanced as appropriate.

Beyond these offerings, clients willing to invest $200,000 can access a model portfolio provided by BlackRock that aims to find mutual funds and exchange-traded products that will provide risk-adjusted income given the prevailing market conditions.

For clients looking for exposure to individual securities through separately managed accounts, Fidelity offers its Fidelity Strategic Disciplines program. Clients have access to eight different strategies: the Breckinridge Intermediate Municipal, Fidelity Intermediate Municipal, Fidelity Core Bond, Fidelity Tax-Managed U.S. Equity Index, Fidelity U.S. Large Cap Equity, Fidelity Equity-Income Strategy, Fidelity International Equity and Fidelity Tax-Managed International Equity Index.

Fees Fidelity charges for its services

Clients typically pay a percentage of assets under management based on how much they invest. For portfolio management, the fee also covers access to financial planning services, assistance from a Fidelity representative, as well as the custody and brokerage services of a Fidelity affiliated firm. The fee does not include any internal mutual fund fees or certain costs incurred when an outside broker or model provider is used. More complex financial planning requests may also cost more.

Client money is often invested in products that earn revenue for Fidelity, which creates a conflict of interest. To address that conflict, the firm credits back to clients the amount that Fidelity earned as a result of the investment, such as the management fee for Fidelity funds or the distribution and servicing fees for non-Fidelity funds. This credit reduces the gross advisory fee.

Annual Gross Advisory Fee for Accounts Less Than $500,000
$500,000 or less1.50% minus credit (up to a maximum of $6,250)
Annual Gross Advisory Fee for Accounts Over $500,000
First $500,0001.25% minus credit
Next $500,0001.10% minus credit
Next $1 million0.90% minus credit
Next $3 million0.70% minus credit
Over $5 million0.50% minus credit

In addition to the portfolio management fees above, accounts that have what’s called a separately managed account sleeve to gain exposure to individual securities, may pay an additional fee ranging from 0% to 0.40% when they choose strategies with unaffiliated providers.

Clients who opt for Fidelity’s separately managed account program as opposed to its wealth services program will pay a percentage of AUM, ranging anywhere from 0.20% to 0.90% depending on the account size and which of the eight strategies offered is used. Clients who go the digital route will pay a 0.35% annual fee for Fidelity Go and 0.50% for the Personalized Planning and Advice.

Fidelity’s highlights

  • Offers a digital advisory account. Clients looking for the lowest fees or who have little money to invest can use Fidelity’s online-only product, in which a proprietary algorithm recommends an asset allocation. They must agree to receive all communication electronically.
  • Low account minimum. Clients can access Fidelity’s simple online portfolio management tool for as little as $10. In-person or over the phone portfolio management and financial planning services require a minimum investment as low as $50,000.
  • Accessible nationwide. Even if you do not live near one of Fidelity’s offices that offer advisory services, you can call the team of representatives who are licensed to assist clients in every state.
  • Offers financial planning as part of the portfolio management fee. While some firms charge separately for financial planning, Fidelity includes it in the portfolio management fee. However, it’s important to note that clients with more complex situations may incur additional costs.
  • National recognition. In 2020, Fidelity was named the best online broker by Barron’s, as well as Investors Business Daily. Also in 2020, 16 of the firm’s mutual funds won 26 best fund awards in the annual Lipper Fund awards. The firm’s long track record dates back more than 200 years.

Fidelity’s downsides

  • A dedicated advisor requires a $250,000 investment. To have access to a dedicated investment advisor to discuss your accounts, you’ll need to invest at least $250,000. Smaller accounts only have access to a team of representatives who can assist you with questions.
  • Earns money from selling products and making referrals. The firm earns compensation by referring clients to certain independent financial advisors, as well as from selling life insurance or annuities. This creates a potential conflict of interest as advisors may be financially incentivized to make certain recommendations.
  • Uses affiliated brokers. You may be required to use Fidelity’s brokerage services, perhaps forgoing a better price or execution elsewhere. In contrast, other firms may allow you to choose your broker-dealer.

Fidelity disciplinary disclosures

All registered investment advisors are required by the SEC to disclose in paperwork they file, known as the Form ADV, any legal, regulatory or civil disciplinary actions against the firm that would be material in evaluating the firm or its management team. Fidelity Personal and Workplace Advisors reports disclosures that are relatively minor in scope, such as filing required notifications a few days late, or related to select individuals at the firm.

Fidelity onboarding process

The firm offers three ways to get started: Call 800-544-1766, fill out an online form with your contact information to have a representative get in touch with you or search for a local investor center in your area to visit. To enroll in a program, clients must sign a client agreement, which details the services, fees and other terms. Clients then have 90 days to fund their account with the program minimum.

Clients should contact Fidelity, not the other advisors such as Strategic, BlackRock or Breckenridge, with questions about their accounts. Fidelity will contact clients at least annually to find out if their personal situation has changed. That said, clients are also responsible for notifying Fidelity throughout the year if their goals, time horizon, risk tolerance or other key factors change.

Is Fidelity right for you?

Fidelity provides novice as well as wealthy investors with a menu of account options through its registered investment advisory service. Investors starting out and trying to reach one goal may want to consider the online-only accounts that have low minimum requirements and provide simple portfolio management tools. Investors focused on getting ready for retirement will find mutual funds and exchange-traded products and a particular focus on taxes.

However, investors should be aware that Fidelity does earn money from making recommendations and selling certain products, which can pose a potential conflict of interest. As always, whenever you’re shopping for an investment advisor it’s your responsibility to make sure you understand the specific services you’re getting, and for what price. Don’t hesitate to ask tough or pointed questions to ensure you’re getting the best service for your financial life.

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