In Practice March 22, 2010

Level Comp Coming Soon from Fidelity for 401(k) Advisers

Fidelity Investments will be unveiling a new fee structure as well as enhanced reporting and payment processes for advisers who sell its plans.
Reported by

Later this year, the investment firm will begin allowing advisers selling its plans to receive level 12(b)-1 mutual fund fees, as first reported by InvestmentNews and confirmed by Fidelity spokesman Steve Austin. He said the firm is aiming for August to launch the changes.

For about five years, Fidelity has allowed advisers to receive level fees through institutional shares. In response to increasing interest from advisers, the firm will implement the changes to enable advisers to receive level fees across other fund shares, Austin said. “The program continues to evolve as the marketplace has evolved,” he told PLANADVISER.

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In addition, Austin said Fidelity will be rolling out enhanced reporting and payment processes for adviser compensation. “Our goal is to make doing business easier for advisers,” Austin said.

Products March 22, 2010

Northern Trust Offers New Collective Trust Products

Northern Trust has launched a new investment fund platform that will consist of a series of collective funds sub-advised by investment managers retained and overseen by Northern Trust.
Reported by

The Northern Trust Company Sub-Advised Collective Funds Trust will provide access to the U.S. private and public retirement market, the company said. Each collective fund will be marketed and distributed by its respective sub-adviser.

The offering will be supported through the Global Fund Services unit (GFS), which services more than 430 investment managers around the globe encompassing approximately 4,000 funds. As trustee of the funds, Northern Trust will provide due diligence review of all sub-advisers as well as transparent reporting to plan sponsors and recordkeepers.      

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The company noted that collective trust funds typically have a lower cost structure than mutual funds, making them an attractive alternative for plan sponsors with fiduciary responsibility.      

“Collective trust funds are increasingly seen as an attractive vehicle for investment options offered in defined-contribution and 401(k) retirement plans, due to their potential for greater pricing flexibility and other advantages,” said Peter Cherecwich, head of Global Fund Services-North America and chief operating officer for Corporate & Institutional Services at Northern Trust, in a news release.      

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