Fidelity® Portfolio Advisory Service at Work

Providing your participants with discretionary investment management—including ongoing monitoring and rebalancing

Creating Better Sponsor Outcomes with Managed Accounts

Managed accounts have become increasingly popular. They're experiencing increased demand and appreciation, according to Fidelity research that looked at how employers and employees viewed and engaged professional help for their retirement plans.1 The study found that employers see managed accounts as a valuable workplace benefit, while workers' interest is growing as they seek professional guidance during ongoing market instability. Employers view managed accounts as a good attraction and retention tool, with half (51%) citing them as a way to retain employees, and 49% saying the service helps attract the best ones. It's no wonder that Fidelity now has over 4,200 clients currently using Fidelity® Portfolio Advisory Service at Work, our proprietary managed account offering.2

Choice in Investment Preference for Employers

Fidelity now offers choice in a managed account offering to best align to the plan's objectives and investment philosophy. Employers that are focused on potentially lower cost of ownership3 for their participants can choose our PAS-W index-based offering, which leverages index funds4 and offers diversified model portfolios with the goal of tracking to market benchmark. Or, if a managed account that is more focused on maximizing returns is preferred, our core offering continues to aim at enhancing risk-adjusted returns using both active and index funds. Both PAS-W index-based and core offerings provide long-term asset allocation, consider financial circumstances and risk tolerance of each participant, and provide ongoing monitoring and rebalancing of participant accounts. Learn more about our PAS-W index-based and core investment process.

The Benefits of a More Appropriate Fit

Managed accounts can offer greater personalization. Fidelity® Portfolio Advisory Service at Work provides a holistic approach that takes a participant's personal situation into consideration—including financial situation, time horizon and risk tolerance. This level of personalization may make managed accounts a better option for those with more complex financial situations, such as having outside retirement assets, like IRAs, pensions, company stock or spousal assets, or for those who simply want a professional to do it for them. See how personalization works.

How Fidelity Creates an Engaging Participant Experience

Our integrated experience is what sets us apart. We get to know a participant's unique situation before recommending a model portfolio and Strategic Advisors, Inc. assumes fiduciary responsibility for participants' investment decisions. We are scaled to deliver on proven levels of service and have a breadth of resources to help drive engagement and deliver better outcomes. Our seamless participant experience is delivered multichannel through an award-winning digital platform, over 1,000 Fidelity representatives, onsite workshops, and one-on-one consultations.5 Fidelity Portfolio Advisory Service at Work also provides a robust activation program and targeted online experience that drive both awareness and action.

Proven Results and Reasons to Believe

Outcomes are the real driver for the growing popularity of managed accounts. Employees may not be on track to achieve their financial goals, which can impact an employer's bottom line. With our managed account offering that includes ongoing portfolio monitoring and rebalancing, we can provide participants with the help they need to make better decisions for today and tomorrow.

Participants who sign up for Fidelity's managed accounts are diversified—holding on average 11 investment options compared to just 5 for participants choosing their own investments.6

Also, enrolled participants who sign up for PAS-W are 2x more likely to increase their deferral rates.7

Fidelity® Portfolio Advisory Service at Work is available at no additional cost to plan sponsors, and offers 3(38) fiduciary protection for participants' investment decisions.

Plus, 97% of people who sign up have historically stuck with it, so they stay on track to retirement.8

An Additional Consideration

Some plan sponsors may also want to consider Managed Accounts as a Qualified Default Investment Alternative (QDIA). Learn about key considerations plan sponsors should keep in mind when electing a managed account as a QDIA. Download the white paper.


1 Including Fidelity-sponsored research with GFK (polled 212 corporate benefits managers and 802 401(k) participants in Q1 2015), S. Radoff Associates and Plannerzone (series of four focus groups were held in February 2015) and S Radoff Associates (online survey with 468 respondents from March 26–April 3, 2015)

2 Source: 4,200 PAS-W clients are based on Fidelity Investments· recordkept data including both Defined Contribution (OC) and Tax-Exempt (TEM) clients and plans across all market segments as of July 31, 2016. Data includes Fidelity proprietary managed accounts only

3 Index funds generally have lower expenses than non-index funds, resulting in potentially lower total cost of ownership.

4 Funds are chosen from a plan's lineup. If available in a plan's lineup, a Money Market fund or stable value fund will typically be used as the short-term option.

5 Source: Fidelity internal reporting as of July 31, 2016. Currently we have over 1,000 licensed phone and onsite representatives across 1M and TEM, and 180 investor center branches nationwide

6 Source: Based on Fidelity Investments’ recordkept data of nearly 21,900 corporate defined contribution (DC) plans and 14.2 million participants as of June 2016, Excludes NonQual plans, TEM Pooled plans, DB cash balance plans, plans with O participants, and FMR Co. plans. 11.2 is the average number of investments held by PAS-W participants, as opposed to 4.5 for do-it-yourself participants who were not enrolled in a Managed Account service and did not have 100% of their account balances in a target date or Managed Account product for this time period.

7 Source: The analysis includes participants who (a) enrolled in Fidelity® Portfolio Advisory Service at Work (PAS-W) between January 2007 and December 2014, (b) maintained a positive account balance one year before and afier quarter-end of enrollment, and (c) enrolled in the Automatic Increase Program. The analysis excludes participants with prior enrollment in a Wealth Management Account on our record keeping platform, all nonqualified plans, all tax-exempt pooled plans, and the FMR Retirement Savings Plan. The analysis counts participants whose quarter-end deferral rate increased once they enrolled in PAS-W as compared with the prior quarter-end when they were not enrolled in PAS-W. The quarter of enrollment is the quarter in which participants enrolled in PAS-W. Usually, it represents the quarter in which participants received communications related to the PAS-W service or broader WI communications around asset allocation, and/or received help

8 Includes participants with funded balances in a PAS-W account from January 1, 2011, to February 28, 2015

Fidelity® Portfolio Advisory Service at Work is a service of Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company, This service provides discretionary money management for a fee.

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