Fidelity’s Managed Account Xchange (FMAX) product—what one analyst described as potentially the “missing link” between planning and investment management—is now being deployed and will soon be available more broadly, according to the financial services firm. The planning-to-clearing platform, which comes with embedded consultative services, is designed for a range of financial advisors, from RIAs to broker-dealer firms to family offices.
FMAX has “deep integrations” with financial planning software eMoney Advisor (a subsidiary of Fidelity) and Envestnet’s managed accounts components, effectively tying together financial planning, the portfolio proposal and evaluation process, portfolio construction, analytics and brokerage, custody and clearing, according to Gary Gallagher, head of investment and managed solutions for Fidelity Institutional. The project was first announced in June 2019 and was "co-created" with input from several firms that work closely with Fidelity.
Advisors using the “open architecture” advisory platform can utilize “thousands” of investment strategies and can access the platform from Wealthscape, Fidelity’s combined brokerage and RIA technology platform, he said.
Users needing assistance with the service can take advantage of a unified support offering from Fidelity. All they need to do is place a call and Fidelity will be able to guide them to the right solution without juggling the advisor between service providers, according to Gallagher.
The pricing varies based on which services an advisory firm decides to use and is charged as a basis point fee—in the single digits—according to a spokesperson.
In fact, the level of advisor support is one of the chief differentiators of FMAX, according to Gallagher. Not only will advisors be able to get service from a single point of contact, but they’ll also be able to access independent research and consulting.
While the vision of FMAX is certainly enticing, what the tool actually looks like and how it works is largely unknown. Fidelity has briefed select analysts on the tool, but has not given technology demonstrations. Meanwhile, the beta advisors who utilized the platform and weighed in on its features came from approximately 10 firms, according to a spokesperson.
If actual usage lives up to the descriptions provided in briefings, FMAX would be a gamechanger, said Dennis Gallant, senior analyst for Aite Group's wealth management unit. The consulting services offered, for example, are a significant value-add for advisors, he said, even if they're not exclusive to FMAX users.
“Now I've got this investment management resource that provides rich support,” said Gallant, of FMAX. “It's a layer of servicing going above what’s traditionally come from a custody or clearing provider.”
The technological capabilities of FMAX should allow advisors to bridge the gap between financial planning and investment manage, within one tool. In building FMAX, Fidelity joins Merrill Lynch, with its Client Engagement Workstation, as one of the pioneers in bundling and linking financial planning to investment management, within a single platform, he said.
It also makes mass customization, something advisors have always craved, more accessible.
Advisors should be able to move beyond plain vanilla investment management, at a price that’s more affordable than bringing on new staff and better differentiated from robos, said Gallant. Plus, advisors will be able to “talk shop” with Fidelity consultants, which should help advisors feel more confident in their investment decisions and better defend their play-calling.
Prior to FMAX, an advisor may have turned to an OSJ or aggregator to get some of the services now available from Fidelity, he added.
“It’s not an easy process to do,” Gallant explained. “Merrill closed that gap and Fidelity is looking to do that same thing.”
But for the industry at large, it’s a critical step in making financial planning more widespread because it links planning directly to asset management and advisor fees.
Fidelity and Merrill may soon be joined by other providers bridging those same disconnects between planning and investment management, noted Gallant. Orion is moving in that direction, having acquired Advizr financial planning and investment management capabilities. Goldman Sachs, leveraging its United Capital and Folio Financial acquisitions, could be close on the heels of Fidelity and Merrill. Envestnet, with its MoneyGuide financial planning, has options for providing similar functionality for advisors.
“It’s good for financial advisors, overall,” concluded Gallant. With advisors looking to strengthen the quality of investment management they provide, Fidelity is providing a service that enhances capabilities without adding to overhead.
“When you start linking the planning process into the investment management process, it allows the advisors to talk planning and follow through into the investment management,” he said. “It’s been the holy grail for a number of years to build those two walls together.”
Editor's note: Many questions yet remain on this developing story and it will be updated as details become available. While the Merrill Lynch Client Engagement Workstation makes for an interesting comparison, it was built inhouse at the firm and makes linkages between systems and units within the larger firm. FIMAX makes similar linkages of systmes and units within Fidelity or wholly owned subsidiaries including eMoney yet purports to extend to managed account offerings beyond, such as those of Envestnet. This means integrations of some type and Wealthmanagement.com had not yet discussed these developments with the firm by press time.
Take a look at our comprehensive guide to the best and most popular information ebooks and products available today on Detoxing, Colon Cleansing, Weight Loss and Dating and Romance. They are all in one spot, easy to find and compere to make a quick selection for the product that best fits your needs or wants.
So browse through a category and make your preferred selection and come back here to read more choice articles and get a few more helpful tips on ways to help your enhancement.
As an Amazon Associate I earn from qualifying purchases. “saubiosaubiosuccess.com is a participant in third party affiliate and advertising programs; The Amazon Services LLC Associates Program, Awin network, and other affiliate advertising programs are designed to provide a means for sites to earn advertising fees and commissions by advertising and linking to products on other sites and on Amazon.com. Amazon and the Amazon logo are trademarks of Amazon.com, Inc, or its affiliates.”
We use anonymous cookies and various 3rd-party services to optimise and to offer you a better, more personalised, browsing experience with advanced accessibility enhancements.
Dismiss
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
