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'Guidance' offering to see Fidelity grab share of low-cost market
by Emma Dunkley on Feb 20, 2013 at 07:50
Fidelity Worldwide Investment has unveiled a 'guidance service' for investors unwilling to pay a fee for financial advice.
The new service has also brought the launch of 15 new risk-rated funds, which are exclusive to the guidance offering.
The move is aimed at helping individuals make investment decisions while addressing the so-called ‘guidance gap' - an estimate by the Cass Business School only 14% of the population is willing to pay for advice while 50% would prefer a guidance service.
Alongside the new 15-strong ‘Pathfinder’ fund range, Fidelity’s service includes model portfolios and an updated Select List, which it hopes will make it easier for investors to choose from over 2,200 fund share classes.
The Pathfinder funds are multi-asset options that vary in risk and have a mix of up to five asset classes, comprising cash, bonds, equities, property and commodities.
The funds invest via a range of underlying funds selected by managers and analysts at Fidelity.
The range also uses tactical asset allocation, where the team alters the asset mix based on their expectations of future market moves. 10 of the 15 funds are open architecture, investing in funds outside of Fidelity.
The ‘Headstart’ portfolios offered in the service are a range of open architecture funds based on an individual’s attitude to risk or themes Fidelity believes are important, such as income and emerging markets.
The range provides the option of a ready-made selection of funds, or allows investors to choose their own funds based on the pre-determined asset allocation suggested by Fidelity’s experts.
It is then up to investors to monitor their funds and rebalance in response to market changes.
The Select List is a selection of 140 funds chosen by in-house experts at Fidelity, taken from 85 different investment companies, after research into their ability to add value.
Additionally, the firm’s Fund Supermarket is on offer for those who have the confidence to ‘go it alone’.
In terms of other support, the guidance service also offers help via web, phone, face-to-face, post and mobile.
In relation to charges, the firm has dropped annual management charges on the ISA if investors buy a new Fidelity SIPP.
If investors opt for just the ISA, it is half price if bought before the end of this tax year. This is achieved by a cash rebate of 50% of the AMC of the funds invested in and held over a 12 month period.
For example, if £6,000 is invested into a fund with an AMC of 1.5%, the cash rebate for the 12 month period will be £45, or 50% of the 1.5%.
A rebate of 0.75% is also included for anyone who brings their ISA or personal pension from another provider by the end of April.
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