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Rating:Fido Reps Can Now Sell iShare Portfolios Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, April 24, 2014

Fido Reps Can Now Sell iShare Portfolios

Reported by Tommy Fernandez

The expanded alliance between Fidelity and BlackRock has reached the next stage of its evolution.

Fido announced today a new managed account that will be composed of 70% ETFs, with a preference to iShares ETF products (65 are offered via Fidelity commission-free). The product will be sold via 182 Fidelity branches across the country in May. Customers will also be able to access the product via Fidelity.com

The product is important because it will essentially allow Fidelity reps to provide services similar to that of turnkey asset management programs to Fidelity customers. The portfolio is targeted at retirees or near-retirees who want to kick up their income-generating power of their investments.

"A growing number of investors are shifting from accumulating wealth to actually retiring and living off their savings. One of the key challenges they are facing is finding income sources," Rich Compson, Fidelity's SVP of managed accounts and product development, told MFWire.

Compson said that BlackRock will contribute the iShares products as well as the expertise for building the portfolios out of these ETFs. Fidelity will handle the relationship with the customer. Compson estimated that there are at least 3 million Fidelity customers who are in the sweet spot for these products, retirees or near retirees who are cashing in their 401k or are at the final stages of their asset accumulation and are looking for a final kick in income generation.

A key demographic for the product are clients who lack experience and expertise with ETFs, or lack the time to research and develop the portfolios.

Compson said that this product is just the next step in the evolving alliance between BlackRock and Fidelity. As Fidelity customers develop greater comfort with iShares products, Fido plans to sell a greater variety of these ETFs as well as more services tied to BlackRock's expertise in the area. 

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