Fidelity Expands Reach of Its Model Portfolios

Today, more than 6,000 financial advisors subscribe to Fidelity Model Portfolio updates, up from less than 2,000 last year. Matt Goulet, senior vice president of portfolio solutions at Fidelity Institutional, notes that those update subscriptions do not constitute actual usage — though many of these advisors ultimately may use the portfolios.

Fidelity has 21 model portfolios, including five target date models that consist exclusively of Fidelity funds and have on average outperformed 96% of their peers over the past 12 months ending Sept. 30, according to Morningstar. 

Its other model portfolios blend Fidelity funds with ETFs from BlackRock's iShares and from State Street Global Advisors as well as active and passive funds.

"Model portfolios are only a starting point for dialogue between asset managers and advisors on portfolio construction," Goulet says. "Ultimately the increased utilization of models by financial advisors will come through the dialogue about customization and the customization process itself. We can help advisors do that." 

Fidelity is now beginning to roll out customized model portfolios at the advisor and firm levels — portfolios that can substitute ETFs for mutual funds, favor certain portfolio managers, customize risk profiles and more. That customization will be the focus for next year, Goulet said.

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