Fidelity is preparing to convert and default non-retirement brokerage accounts on its RIA custody platform into FCASH as the only core cash sweep position starting next year, a spokesperson confirmed Wednesday.
Interest on FCASH — Fidelity's Taxable Interest Bearing Cash Option — was 2.32% as of earlier this month, much lower than the yield on Fidelity’s Government Money Market Mutual Fund (SPAXX), which advisors currently can use for core cash sweep balances.
“Sweep accounts are intended to hold customer balances awaiting re-investment. Advisors who prefer other cash options for their clients continue to have access to a wide array of short-term and long-term cash management choices with the ability to transact directly from those cash management vehicles,” the spokesperson told ThinkAdvisor via email.
“It is important to remember that advisors can still position trade into other investment options like money market funds, allowing them to actively manage their clients’ cash in a way they feel is in the best interest of their clients and reflects their long-term financial goals.”
Fidelity is providing advanced notice, given that changes to advisors’ processes require planning, according to the spokesperson.
