Compliance July 27, 2016

Advisory Council Meeting to Focus on Plan Transfers, Cybersecurity

Organizations and individuals in the retirement plan community are invited to submit comments or request to address the ERISA Advisory Council.
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The Department of Labor’s (DOL’s) Employee Benefit Security Administration will hold a three-day ERISA Advisory Council meeting August 23 through August 25.

The Advisory Council will study participant plan transfers and account consolidation for the advancement of lifetime plan participation. Cybersecurity for benefit plans will also be addressed. 

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The Council is asking individuals or organizations who wish to submit a written statement to do so on or before August 16. Those wishing to address the Advisory Council may request by August 16 to do so.

More information is here.

Products July 27, 2016

Fidelity Go Digital Platform Competes With Robo Advisers

Fidelity's digital investing platform competes with robo advice providers by adding human component.
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Fidelity has launched Fidelity Go, a digital-based solution to help Americans invest their money. The program combines a professionally-managed portfolio with an easy-to-use digital dashboard.

Requiring a minimum investment of $5,000, the program offers access to investment professionals, rather than an automated robo algorithm, who will construct, monitor and rebalance users’ portfolios. It offers a low advisory fee and invests in Fidelity Index Funds Premium Class and Institutional Class shares. Current all-in costs, including the advisory fee and underlying fund fees, range from 35 basis points (bps) to 40 bps. The program is accessible via smartphones, tablets and desktop computers.

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Users first visit Fidelity.com/Go, where they are asked questions about their goals, current financial situation and risk tolerance. Fidelity Go then suggests an investment strategy based on the investor’s needs. Geode Capital Management, which has served as the subadviser to the Fidelity equity index funds, invests, monitors and manages the portfolios. Fidelity Go service representatives are available via online chat and phone to provide assistance.

Considering this announcement in the overall robo advisory marketplace, Kyle Ramsay, head of investing and retirement at NerdWallet.com, says, “Recent entries by Fidelity and E-Trade serve as further validation that low-cost, automated investment management is here to stay. That is great news for the consumer, as these offerings can save you time and money through automation and lower fees. As automation and scale make it even cheaper to provide digital investment advice, one can easily imagine that similar offerings will be added to the advisory services available from most large financial institutions.”

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