Fidelity to Launch Unified Account
April 25, 2005
Fidelity Investments' National Financial Unit plans to offer a unified managed account (UMA) this fall to its correspondent broker/dealers, sister publication Securities Industry News reports. The move comes at a time when financial advisers are having a hard time managing the growing number of investment products on the market.
While certainly not a new concept, the idea of combining several investment products under a single umbrella is a step forward for Fidelity, given that it is the second-largest clearing firm catering to retail-oriented broker/dealers. Broker/dealers will gain a capability that their wirehouse competitors have spent hundreds of millions of dollars on in recent years, building supporting technology as well as linkages to managers of the complex, fee-based investments available through the accounts.
Fidelity's correspondents' customers will have access for the first time to Fidelity Strategic Advisors, which sub-advises more than $70 billion in mutual fund wrap program assets. Fidelity's Streetscape correspondent platform will offer access to nearly 100 separate account managers representing 250 investment disciplines, a multi-manager account (MMA) program and alternative investments such as hedge funds.
"A multi-manager account is a newer version of the separately managed account," said John Fitzpatrick, vice president in product management at National Financial. He adds that unlike separately managed accounts (SMAs), which may require a brokerage account for each manager, MMAs collect participating managers under one brokerage account.
Fidelity has hired Chicago-based Envestnet Asset Management, which has more than $15 billion under management, to build its UMA program. Envestnet will be the overlay manager for Fidelity's UMAs, and it is using Fidelity's Strategic Advisors unit as a sub-advisor on the mutual fund wrap product. As a part of its role, Envestnet will choose the investment sleeves, making it responsible for the due diligence on those different types of investments. Envestnet will also look after alternative investments accounts.