Fidelity workplace retirement managed account sales grow 78%

By BenefitsPro

By Paula Aven Gladych

Fidelity Investments saw a 78 percentage increase in managed account sales for workplace retirement plans in 2013.

Fidelity Portfolio Advisory Service at Work, Fidelity’s managed account offering for workplace retirement accounts, also saw a 65 percent increase in total eligible assets to $180 billion for all Fidelity Portfolio clients.

The growth underscores the growing demand for professional investment services among workplace savings accounts, such as 401(k) plans, the company said.

Fidelity added 784 new plan sponsors in 2013, which added an additional 740,000 eligible workers to the Portfolio Advisory Service platform. Enrolled participants in the service also grew by 51 percent in 2013, to 94,500, and assets under management grew by 54 percent to $7.3 billion. New clients represent organizations of various sizes across a variety of industries, including technology, manufacturing, telecommunications, higher education, health care and others.

“For many American workers, their retirement savings is going to be the biggest investment in their life—more than they’ll invest in a house, a college education for their children or any other investment,” said Sangeeta Moorjani, senior vice president of Fidelity’s Professional Services Group. “As a result, an increasing number of workers are turning to Fidelity PAS-W to help them tailor a retirement plan that meets their specific investment needs as well as adjusts to their level of risk and changing financial circumstances.”

Many American workers realize they should be saving for retirement but they don’t know how to manage their own savings, Fidelity found. In recent research, the company found that 77 percent of respondents admitted they did not have the skill, will or time to manage their own investments.

And among Fidelity participants who did take an active role in managing their savings, another study showed that more than half, 53 percent, did not have the appropriate asset allocation for their age group—33 percent held more than 90 percent equities in their 401(k), while 12 percent held less than 10 percent in equities. Eighty-seven percent had not made a change to their asset allocation in the past year.

Managed accounts provide participants with a team of investment professionals who actively manage their retirement savings account.

Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.5 trillion, including managed assets of $1.9 trillion, as of Jan. 31, 2014.

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