Fidelity International is following in the footsteps of M&G Investments and Schroders by launching its own advice service, Fidelity Wealth Management.
The restricted advice service for portfolios at least £100,000 in size will initially focus on investments and retirement, with plans to add estate, tax optimisation and financial planning services in future, a press release issued on Wednesday said. Fidelity said the new business would bring its existing wealth and retirement services together in a single offering.
Investment advice fees are 1% of the investment amount subject to a minimum fee of £1,000 and maximum fee of £10,000. There are ongoing review service fees of 0.5% of the amount invested.
In October, Fidelity acquired Legal & General Investment Management’s personal investing service as well as low-cost platform Cavendish Online.
Fidelity’s press release said clients would be able to access advice through telephone or video conferencing.
‘We’re seeing increased provider interest again in the vertically integrated model’
“We’re seeing increased provider interest again in the vertically integrated model, where the opportunity to control more of the value chain is appealing. Fidelity will be the latest to join the list that includes SJP, Schroders Personal Wealth, Quilter and the banks,” said Altus Consulting director Simon Bussy.
In September, M&G Investments announced it was launching a £28bn wealth management arm comprising its recently-acquired platform Ascentric, Prudential Financial Planning, The Advice Partnership (TAP) and the M&G Direct funds business.
That followed Schroders’ launch of Schroders Personal Wealth in 2018 as part of a joint venture with Lloyds. And at the start of 2020, Vanguard received regulatory approval to provide retail advice in the UK.
CWC Research managing director Clive Waller questioned whether Fidelity Wealth Management would resonate with clients. “UK investors have always preferred impartial brokers such as HL or Interactive Investor or AJ Bell. Why will that change?”
Fairview Investing consultant Ben Yearsley wondered whether Fidelity Wealth Management would put advisers off using the company’s advised platform Fundsnetwork. “Are they going to give preferential treatment to their advisers for access to Fundsnetwork? It’s always dangerous when you’re a distributor and a manufacturer trying to keep everyone happy.”
But Bussy did not reckon Fidelity Wealth Management’s restricted advice offering would go head-to-head against independent advisers. “More likely it may appeal to existing customers who like the brand and need a little bit extra help and advice.”
‘A continued and growing need for financial advice services’
Fidelity International head of UK wealth and personal investing Simon Gibbons said: “There is a continued and growing need for financial advice services which help consumers to optimise their wealth as effectively as possible. The introduction of pension freedoms, increased longevity, and the transfer of wealth within generations means this is particularly acute amongst those planning for retirement.”
Fidelity International global head of personal investing Stuart Welch (pictured) said: “The FCA has noted the progress made in closing the UK’s advice gap in recent years, however has stressed there is still significant work needed to ensure those who require help in managing their finances have access to services which can help them with the decisions they face.
“The launch of Fidelity Wealth Management, alongside our other platform tools and guidance services, means we are able to offer a wide variety of sources of support to suit a range of customer needs.”
See also: Will other fund houses follow M&G wealth management push?
