Fidelity has gone to the robos—almost.
On Wednesday, Boston-based Fidelity Investments announced the launch of Fidelity Go, a hybrid robo-human advisory solution aimed at young investors.
“We’re targeting investors between the ages of 25 and 45 who we would describe as more digitally savvy,” says John Danahy, head of digital managed solutions for Fidelity Investments.
The new product is a digital-human hybrid rather than a fully-automated robo-advisor. While clients will be able to open and access their accounts online or through a mobile device, the portfolios are constructed and maintained by Geode Capital Management, a Boston-based asset manager that also manages Fidelity's lineup of index funds.
Danahy says that Fidelity Go is a middle ground between robo-advisors and managed accounts.
“We’re not offering a one-on-one advisory relationship,” Danahy says. “Fidelity Go is ideal for clients who are comfortable engaging digitally and have less complex financial needs.”
Clients will be able to open taxable investment accounts and IRAs with minimum investments of $5,000. They’re first directed to a seven-question survey that establishes their portfolio goal and risk capacity. Both taxable and IRA clients will have seven different portfolios to choose from.
Taxable account portfolios, available both as individual and joint accounts, are built using BlackRock’s iShares ETFs and municipal bond funds, while IRA portfolios will use Fidelity’s index mutual funds.
“The iShares ETFs are all large and liquid, among the largest ETFs available,” Danahy says. “From a tax efficiency and trading standpoint, we like that. Since we don’t do tax loss harvesting, we thought it was important that we were being as efficient as we could.”
If a client’s needs, goals or risk capacity changes, they’re able to re-enter Fidelity’s profiling questionnaire and input additional information.