Should Fundsters Sweat Fidelity's Rationalization-Lite?
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Thursday, July 20, 2017

Should Fundsters Sweat Fidelity's Rationalization-Lite?

Though Fidelity is taking a cue from the wirehouses and streamlining the FundsNetwork shelves, many fundsters are taking the change in stride.

Carolyn Clancy
Executive VP Fundsnetwork

The June issue of the new MFWire Insight white paper series digs into changes and opportunities at the Boston Behemoth's platform. MFWire talked to distribution and national accounts executives across the industry to put together the report. Here's an excerpt from the report's section on the new rationalization-lite initative:

Getting a new fund on Fidelity's platform, says a distribution exec at a large fund firm, has "gotten a little bit harder." He says that's partly due to Fidelity being "capacity constrained," in terms of how many funds they can work on adding at a time, and partly due to Fidelity looking at types of funds that are being added.

"The cost to actually add a fund is more transparent than ever," that exec says.

For medium and large-sized firms this might not be as big of a deal, but for small firms, it's a hit.

"This is very difficult for small fund firms ... We're evaluating other distribution avenues," says one owner of a small fund firm.

Yet the wirehouses and other B-Ds have been going through big platform lineup changes, too.

"Every platform looks like they're trying to clean up their CUSIPs" and lower the number they have to manage, one fundster distribution exec says. "Fidelity's going down that road, too."

"It isn't as draconian as the B-D side," says a national accounts exec at a large fund firm.

"We're talking really, really light rationalization."

"The trend is towards rationalization and platform consolidation," agrees a distro exec at a boutique.

"If it's important to you to have CUSIPs on" that would be dropped from the platform under the changes, says a national accounts exec at a Midwestern fund firm, "they will be charging for those."

"There's no performance hurdles," unlike B-Ds, clarifies an exec at a different Midwestern firm. "It's really more of a viability thing."

To gain access to the full report, which is available to MFWire member firms, please call Veronica Guzman at 212-331-8999 or email

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