Fidelity Investments has introduced a new unified managed account (UMA), Fidelity Personalized Portfolios, which provides a daily tax-sensitive investment management solution and other key features.
This service offers affluent investors, who are navigating an increasingly complex investing environment, a single diversified portfolio that can be personalised to meet their individual needs while at the same time optimising risk management and after-tax returns.
Investor demand for professional management and tax-efficient investing is growing. Fidelity Personalized Portfolios represents a significant evolution in portfolio management by offering daily risk management and tax-sensitive investing previously reserved for institutional investors. The new service offers portfolios that invest in a wide range of carefully selected investments that are personalised based on the client’s goals, risk tolerance and personal situation.
According to a recent Fidelity survey of affluent investors, among those who own a UMA, nearly half (48 per cent) chose it because they had an increase in wealth and wanted to reduce the complexity of their portfolios, or address their significant investment-related tax obligations. To this point, 28 per cent of those surveyed said taxes was one of their most urgent household concerns. Additionally, 39 per cent of these investors said they aren’t sure where to invest to get a good return and not lose money.
Morningstar cites that on average, over the 74-year period ending in 2009, investors who did not manage investments in a tax-sensitive manner gave up between 100 and 200 basis points of their annual returns to taxes. In a low-expected-return environment, this represents a significant cost to investors.
"Today’s challenging market conditions and ever-changing tax landscape are unsettling for many investors," says John Sweeney, executive vice president, Fidelity Investments. "Fidelity Personalized Portfolios addresses this concern by providing a professionally managed solution for investors who have accumulated wealth, are focused on proactive management of their portfolios in the current market environment, and want help managing and assessing their current holdings and potential tax consequences to try to achieve better after-tax returns."