Fidelity Introduces Discretionary Management Service For Retirement Plan Investors
MARLBOROUGH, MA, March 6, 2003 -- Recognizing that retirement savers are looking for more help with their investment portfolios than ever before, Fidelity Investments today introduced a discretionary management service for the nearly 10 million participants it serves through 401k and employer-established 403(b) plans.
Fidelity Retirement Plan ManagerSM enables participants to delegate the management of their defined contribution plans to professional investment managers. This month Fidelity will begin offering Fidelity Retirement Plan Manager to corporate and tax-exempt retirement savings plans.
Strategic Advisers, Inc., Fidelity's registered investment adviser that manages $19 billion in assets, will deliver the discretionary management service.
"Recent market activity reinforces the need for participants to reevaluate their portfolios and adjust for the impact of market fluctuations. While many participants are leveraging existing tools and investment options to take the appropriate action, some want professional help," said Kathryn Hopkins, executive vice president, Fidelity Institutional Retirement Services Company, the nation's 401k leader. "Fidelity Retirement Plan Manager is ideally suited for participants who want more assistance with managing and rebalancing their accounts on an ongoing basis."
How Fidelity Retirement Plan Manager Works
After receiving information about Fidelity Retirement Plan Manager, plan participants call licensed representatives to complete an Investor Profile Questionnaire, which helps identify participants' time horizon, risk tolerance and financial situation.
With this information, the service invests a participant's 401k or 403(b) account according to one of the model portfolios customized to their plan's investment options. If plan participants hold company stock in their retirement savings plans, Fidelity Retirement Plan Manager model portfolios take the company stock holdings into account, but the service does not manage them. As needed, the professional investment managers will adjust model portfolios for changes in the markets, the economy and plan investment options.
To qualify for the service, plan participants must have $10,000 or more in eligible plan assets. The maximum net annual advisory fee ranges from .35% to .60% of average daily balances, with the lower fee rates charged on higher balances. The net fee can be deducted directly from participants' accounts, or plan sponsors can choose to pay for the service for their participants.
Meeting Evolving Needs
Fidelity Retirement Plan Manager is the latest addition to the series of discretionary management services that Strategic Advisers has offered to individual investors since 1989. This service is an extension of Fidelity's comprehensive array of education services and investment tools designed to address the diverse needs of plan participants. Fidelity's suite includes the Fidelity PortfolioPlannerSM interactive planning tool and the Fidelity Freedom Funds family of lifestyle mutual funds.
"Our experience shows that online tools are popular with self-directed investors, while lifestyle funds draw participants seeking a one-stop shopping investment option," said Hopkins. "With our new discretionary management service, we can now provide a solution for participants who want to delegate the establishment and maintenance of an appropriate investment mix to professional investment managers, based on the options in their workplace retirement plans."
Through its Workplace Services offering, Fidelity Investments provides human resources administration and employee benefits solutions to more than 14 million participants in more than 11,500 retirement, pension, health and welfare, payroll and stock plans as of December 31, 2002.
Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of $1.4 trillion, including managed assets of $759.6 billion as of January 31, 2003. Fidelity offers investment management, retirement planning, brokerage, human resources and benefits outsourcing services to 18 million individuals and institutions, as well as through 5,500 financial intermediaries. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, one of the largest mutual fund supermarkets and a leading online brokerage firm. For more information about Fidelity Investments, visit www.fidelity.com.
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