Fidelity Adds More Target Allocation Mixes to Model Portfolio Lineup

Fidelity has added four new target allocation mixes to its model portfolio lineup, ranging from 10% to 100% stocks with the remainder, if any, in bonds.

The expansion is designed to give advisors the ability to address a wider range of investor risk profiles and meet the needs of their practices as the use of model portfolios continues to grow. Advisors do not have to use Fidelity for custody or clearing services to access the firm’s model portfolios. The  four new model portfolios have equity/fixed income allocations of 10/90, 30/70, 50/50 and 100/0.

“As the marketplace continues to evolve, “We’re leveraging Fidelity’s investment experience, deep understanding of advisor needs, robust technology platforms, and relationships with other industry leaders to enhance the advisor experience and empower them to better serve clients through diversified offerings, flexibility and customization,” said Matt Goulet, senior vice president for portfolio solutions at Fidelity Institutional, in a statement.

Fidelity said its Target Allocation Model Portfolios, which use institutional shares of funds and ETFs including proprietary and third-party funds, were launched three years ago. Since then they have outperformed an average 88% of peers as of May 31, 2021, and its 60/40 model, its most popular, has outperformed 95% of its peers, according to Morningstar data.

In 2020, Fidelity began rolling out customized model portfolios at both the advisor and firm levels with customizations that allowed for ETFs or mutual funds, preferences for certain managers, custom risk profiles and more. More than 7,000 wealth management advisors currently subscribe to Fidelity Model Portfolio updates.

Advisors can access Fidelity’s broad range of model portfolios across more than 20 platforms including Fidelity’s own managed account FMAX platform. The model portfolios are also  integrated into Fidelity’s Wealthscape Modeling & Rebalancing tools and directly integrated into a growing number of third-party platforms, such as Envestnet, 55ip and more. Advisors don’t have to use Fidelity for custody or clearing to access the model portfolios.

“Customized model portfolios help us further differentiate our firm and meet a wide range of client needs more efficiently, so that our advisors have more time to focus on helping clients work towards their goals and plan for the future,” said James M. Beale, head of Managed Solutions & Capital Markets at Rockefeller Capital Management, in a statement.

Fidelity said it is now exploring adding ESG and tax-aware capabilities to its model portfolios and continues to enhance the ability for advisors to leverage its model portfolios as building blocks within a larger unified management account (UMA). More than 7,000 wealth management advisors are now subscribed to Fidelity Model Portfolio updates. As of May 31, 2021, Fidelity had $10.8 trillion in assets under administration which includes $4.1 trillion in discretionary assets.

European Compliance Association

European Compliance Association