Fidelity Wealth Services Overview
This reviews our relationship with Fidelity Investments and our recent signing up for Fidelity® Wealth Services. It is not meant to be representative of everyone’s experiences or a broad review of their services.
Below I discuss our recent process of agreeing to become clients of this extra fee-based service, some of the mechanics of doing so, some highlights of their good systems available and some small issues we encountered (more than we’d expected.)
It was a little surprising that Fidelity is not geared to globally managing combined assets from my and my spouses accounts and across all asset types, when some of their systems show consolidated assets by asset type, but not at a detailed enough level to do everything. This may be more of a system constraint than their philosophy issue, but obviously it is not a priority.
Background
My spouse and I have had accounts with Fidelity for years. Both of us have studied and worked in some aspect of Finance/Investments. And we worked with a personal financial planner for years, who we had to fire because they raised their fee too much. So we both know the basics of having a target asset allocation (e.g. 50% in Domestic Stocks, 10% in International Equities, etc.) and rebalancing on a schedule.
But we’re not good about timely rebalancing ourselves -- we are not very active investors and sometimes money from sales or investments from outside sources would languish in default Money Market accounts for over a year. Once we finally got around to calculating that we were out of balance from our target allocations, and by how much, we’d experience decision paralysis about which specific investments to buy.
Our accounts were sufficiently sized that occasionally we’d receive emails from a Fidelity representative to come meet with them in their Investor Center to set up customized services. Years ago before working with our planner we went in once but did not proceed. Recently, we saw the need for someone else to help us keep our assets growing and protected better.
Fidelity Wants to Mostly Meet in Person
Once we finally contacted Fidelity to set up an initial discussion, we were invited in to meet their advisor at one of their Investor Centers. They prefer face to face rather than phone calls. We initially discussed broad goals and desires, then they wanted us to enter our detailed income and expense budget into a system that lets them plan better. This system is not hooked up to your personal web site, there was a special one-time login they provided me.
Two Types of Wealth Management Advisors
I do not have access to the official Fidelity names of the two types of advisors described below.
The first advisor we met with told us that their investment team was unable to manage our portfolio on a global scale across both of our accounts, and across all asset types. But this is what we wanted.
So that advisor referred us to another type of advisor in their office whose team was able to at least consider both our assets combined across account type. But the accounts are still systematically managed separately, which means that my regular IRA would not be combined with her IRA and other account types. And only for the accounts we’d set up as ‘managed’ by Fidelity that we transferred assets to. The next section describes how the portion of our total assets was determined that was transferred to Fidelity managed accounts.
Fidelity Wealth Services Fee
Only a portion of our total assets are being managed by Fidelity to meet the fee. For our total assets, Fidelity needed enough assets to be assigned to the managed accounts so that the annual fee, paid quarterly, equaled $5,000 per year at the built in rate. So $5,000 / Assets under Management rate = amount of assets that Fidelity must manage for us. Approximately this asset amount was transferred from our regular accounts to new Fidelity ‘managed’ accounts based on decisions we made with our advisor where we specified the amounts by account to transfer. Certain types of accounts made sense to transfer for this active management.
We were told and have seen that we would receive advice on managing our entire portfolio in total, whether in the managed accounts or not. But the transferred amounts would be actively managed to take advantage of short-term market insights that Fidelity’s experts are aware of. So instead of the prior focus with our non-Fidelity planner, and our haphazard attempts, on keeping our asset allocations by asset type close to our target percentages, Fidelity knows about short-term opportunities that they will make trades for us. To give you an idea of how actively managed these accounts are, over a 90 day period in one account, there were 14 buys, funded by 14 sales.
Investment Proposal
A detailed proposal was prepared for us based on our discussions about which accounts and amounts would be transferred to the Fidelity managed accounts, and what the price would be. We had to electronically sign that we agreed. This was done via a special screen that got one-time access to.
Online Systems and Emails
Overall, Fidelity’s website has a lot of features that you’d want, but not everything. I’m not reviewing all aspects of it, just highlighting a few relevant things.
Not all systems or screens are available for both my wife’s and my accounts, even though they are somewhat ‘Linked’. My wife’s account is primary in our relationship with our advisor.
Accounts and Trades Screens
These screens are available to all Fidelity customers for managing all aspects of their accounts and transacting. You can name and group your accounts for a customized view.
The current balance for the group is shown next to the group name. Accounts authorized by someone else for you to see, like your spouse, appear here for 'read-only' purposes like seeing balances, positions and trades. But you can't execute trades or account actions for them. Accounts Managed by Fidelity for you are also shown. Credit Cards show current balances owed, which differ from balances due on a monthly statement.
You can customize the groupings names and assign accounts to any group you desire, but just to one group. For example, IRAs or Roth IRAs.
To configure these groupings, first set up the Custom Account Groups You Want, then assign each account to Custom Account Groups and rename Accounts if you want to. If you have a group of IRAs including your spouses, rather than having just some generic account numbers appear, you’d use: MY IRA and Her IRA.
Full View Lets You See Balances and Transactions at other Financial Institutions
“Full View lets you access your online financial information in one place so you can easily monitor your entire portfolio, including investments, retirement, and credit card accounts.” Views of Accounts can include accounts with External Financial Organizations.
Last August I received an email about the new version touting its “smarter mobile version, improved graphics and simplified displays, and an easier-to-use, more intuitive design. But I know I used to be able to see bills from credit cards and other places in Full View, but not in the new site.
Additionally, I had to re-enter each account that I wanted to see in the new version, obviously not very user friendly. But maybe this was done as a security feature.
Once you turn on Full View, you can have external accounts appear on the Accounts and Trades screens.
There is a menu choice called Full View under the Accounts and Trades menu. It brings you to a dashboard Home screen like this containing menu choices at the top for: Organizer, Spending, Investments, Vault and Reports.
The Organizer is a view of information about each party (includes my Spouse) and any designated beneficiaries for both of our accounts. On that page is a link to the Accounts page where you enter outside accounts and their credentials. These credentials seem to expire periodically, not sure if it is the externally linked institutions driving this requirement to re-authenticate or Fidelity.
The Spending tab has a high level dashboard, a view to enter budgets and a way to see transactions and download them.
The Transactions tab shows detailed transactions for all of your non-Fidelity accounts that can be viewed from all accounts together or just one. The Full View version before the ‘upgrade’ let you group the accounts, e.g. where you have access to a parent’s account and a joint account with a sibling, but you don’t want to include those accounts in your numbers when analyzing amounts just for accounts you ‘own’. So you could look at data by account groups, but that feature no longer exists.
The Investments tab lets you see Asset Type broken down into level below just Domestic Stocks, e.g. Domestic Large Cap Stock, Domestic Small Cap Stock. And also shows the % of Type (e.g. Domestic Stock) and % of Portfolio. Can be seen for all accounts or just one, but not the groups available on the Accounts and Trade Page available to everyone. This is the level of detail that is helpful if you want to manage allocations by Asset sub-class, e.g. if your stocks are over your target, you want to break them down into subclasses to decide what to buy and sell, But you can’t see this level of detail, including the account, for the combined across all accounts and people, and then download this, which is disappointing.
There’s a way to see Investment transactions and download them too.
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eMoney
eMoney was a separate online software as a service company that was bought by Fidelity. Clients enrolled with the second type of personal service we reviewed and now work with, with more actively-managed accounts, supposedly have access to eMoney to enter their budgets. It is supposed to be more sophisticated than the software we entered our budget in with the original type of advisor.
But although our advisor entered a detailed budget for us into eMoney when we were in their office, neither of our online accounts display these budget amounts when we go into eMoney’s budget feature when online; they ask each of us if we want to start recording a budget.
Only under the Planning> Goals Menus can you see your Global Asset Allocation, but can’t Drill-Down all the way.
The link at the bottom of the screen opens a new section showing each Fullview investment account spread across these asset types by individual investment account. The Current asset mix vs. selected Target mix shows where you need to take action. But the details screen only shows the Fullview Investment Accounts spread across these asset types without offering a way to list the detailed investments. You can download your detailed positions by account (under Accounts and Trade, Account Positions) but it does not classify the securities by Asset type (Domestic Stock, Bonds, etc.) So do this at a detailed level, including different stock and bond styles, you need to match separate Morningstar security type data to the downloaded details!
I have noticed that Fidelity’s Tools for Asset Allocation Are Somewhat Better but doesn’t include Morningstar Rating, which are available on another screen.
When we log into the Communication Center (messages and alerts), we see our advisor’s Name, showing Private Client Group and the main 800 telephone number for reaching them.
Fidelity Comparison
Emails
Fidelity emails like appointment reminders only go to the Primary person’s email address, not to both my wife and I.
Emails come from a ‘team’ email address containing the individual advisors name, even if you send an email directly to an individual’s direct email address, which they don’t provide you. This makes sense for compliance purposes and also if the advisor or their assistant are away or busy.
More Sloppy Service or Systems Issues Than You’d Expect
Sloppy service that you’d expect would be a little better. Multiple times we were told my wife could fill out something online and she did, then they said that wasn’t correct and they needed to have her mail back physically signed form.
For example, I received an automated email saying I need to name my beneficiaries. I checked my accounts online and they all had beneficiaries. When I informed our advisor, the team member told me that “It is an automated email intended to add beneficiaries to employer retirement plans. Considering your 401(k) plan is a $0 balance, please disregard.” As far as I’m concerned, that plan was disbanded for me as I rolled all of the money out of it into my Fidelity IRA. I can see it in the list of accounts where I assign account groups, but it does not appear in the group that it is assigned to. And when I use the ‘my Retirement Goal’ functionality it says that all of our accounts have beneficiaries.
There were a few other minor issues encountered in onboarding. We signed documents a few times in the office, then were told that they were the wrong documents and they sent us by courier documents for us to sign and courier back to them (we did not pay courier fees.)
The proposal for the active management had an error for one of our birthdays displayed, but we were told that the issue is only within the proposal system, not within the systems that matter for administrative and account record-keeping purposes.
Fidelity Wealth Services Review Conclusion
Need to become better about showing investments across all authorized accounts by asset type and helping manage investments this way. Need better way to communicate to both spouses electronically involved in co-managed accounts and to be able to see information from all systems on a consolidated basis, like eMoney. But Fidelity does have some sophisticated investments and some good systems. The Full View feature when enabled and configured is a great way to include accounts at other institutions in various views. But Fidelity still has more computer systems work to do to enable the above.
Chad Morris is a financial writer with more than 20 years experience
as both an English teacher and an avid trader. When he isn’t writing
expert content for Brokerage-Review.com, Chad can usually be found
managing his portfolio or building a new home computer.
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