Magazine article American Banker

Fidelity Wrap Service Offers Hundreds of Funds

Magazine article American Banker

Fidelity Wrap Service Offers Hundreds of Funds

Article excerpt

Fidelity Investments has launched a wrap account service that allows banks to choose from hundreds of mutual funds.

Through its clearing arm, National Financial Services Corp., Fidelity introduced Fund Counselor, which offers a menu of 370 Fidelity and non Fidelity no-load funds in addition to the portfolios a bank manages.

Banks that offer wrap account services typically include the offerings of two fund families - their own and one with a lot of name recognition.

But investors are demanding far more choices than is typically available, said Robert Middleton, vice president, correspondent services at National Financial.

Mr. Middleton said few companies can perform the complex management and record-keeping services for a multitude of different wrap account programs.

So. Boston-based Fidelity has hooked up with Portfolio Management Consultants, a Denver-based company that will help National Financial customize and manage each wrap account for every bank.

National Financial charges customers 0.03% of assets under management. Portfolio Management gets 0.25% to 0.50% of assets under management, Mr. Middleton said.

Wrap accounts are designed for investors willing to make a high initial investment and pay a hefty fee to get professionals to manage their portfolio on a daily basis.

Wrap accounts are gaining in popularity among investors who prefer giving brokers a standard fee instead of the traditional commission for every transaction. …

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