Fidelity Plan to Combine Robos Makes a Lot of Sense, Tech Experts Say

Fidelity Launches Advisor Large Cap Opportunities SMA

What You Need to Know

Fidelity confirmed Monday it plans to merge its automated Fidelity Go and hybrid Personalized Planning & Advice businesses, effective Nov. 1.
The firm will offer Fidelity Go with no advisory fee for accounts under $25,000.
Accounts over $25,000 will be charged 35 basis points annually.

After Fidelity Investments on Monday confirmed it will merge its automated Fidelity Go and hybrid Personalized Planning & Advice robo-advisor businesses in a move that will become effective Nov. 1, tech experts weighed in, calling it a sensible move.

“We are always evolving our offerings to meet customer needs,” a Fidelity spokesperson told ThinkAdvisor on Monday.

“With this change, we will extend the benefits of Fidelity Go for younger and emerging investors through no advisory fee for accounts under $25K, and provide the coaching and planning of Personalized Planning & Advice at a new lower price for investors with accounts over $25K,” the spokesperson added.

Accounts over $25,000 will be charged 35 basis points annually, the spokesperson confirmed.

Fidelity Go currently costs $3 a month on accounts with balances under $50,000 and 35 basis points on accounts with more than $50,000. Planning and Advice, meanwhile, charges 50 basis points.

Because clients with $25,000 to $50,000 will be charged more under the new fee structure for the merged platforms, Fidelity is waiving fees for them for the first six months, the firm’s spokesperson confirmed.

Barron’s and Financial Advisor IQ/Ignites reported Friday that Fidelity intended to merge the two robo-advisor offerings, citing regulatory filings.

“I think this move makes a lot of sense now that the industry has years of experience with this advice-driven technology,” Timothy Welsh, president and founder of consulting firm Nexus Strategy, told ThinkAdvisor.

“Stand-alone robo solutions confuse your message by having multiple names, brands, and distribution strategies, when it is really just a subset of financial advice and consumer preferences in how they want to interact with you,” he said. “It’s a marketing principle that the more unified and simplified your brand messaging is, the better outcomes you will achieve.  Definitely one of those ‘less is more’ strategic approaches.”