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Platform Focus: Fidelity steals a march on guidance


Fidelity Personal Investing is arguably the original direct platform, having launched in 2000 before Cofunds or Hargreaves Lansdown. As well as longevity, it also has breadth within the business consisting of the adviser platform FundsNetwork, a large defined contribution pension business, not to mention that it is the tenth largest fund manager in the UK. Their US business is also a source of experience to draw on with a huge direct operation.

The UK direct-to-consumer business was relaunched in early 2012 with the emphasis firmly on “guidance”. Users can select investment “solutions” in the form of risk-rated PathFinder funds; model portfolios called HeadStart Portfolios or can choose from the fund supermarket using The Select List of funds rated most highly by Fidelity.

Along with Hargreaves Lansdown, Fidelity has made a more concerted effort to negotiate with fund managers than their competitors. While Hargreaves has secured significant discounts on a narrow selection of specific funds, Fidelity has a selection of discounts more broadly spread across the fund ranges of a number of leading fund managers either as rebates or clean share classes.

There are a range of well-executed and good looking tools to help users to narrow down their choices and make better decisions.

For those asking whether this strays into regulated advice, Fidelity is adamant that it does not. The company can be more confident about this since the publication of the FCA’s guidance consultation on non-advised sales and simplified advice, which sought to clarify the boundaries of retail investment advice. Competitors including Hargreaves Lansdown have expressed more interest in exploring guidance since the FCA paper but it is Fidelity that has stolen a march in this area.

Where the proposition is limited is when it comes to share dealing, which is currently done through a partnership with Charles Stanley. Clients cannot hold both funds and shares in an Isa in the same year. This is important because it deters investors who want to hold a range of asset classes including shares and means that Fidelity is missing out on some clients looking to consolidate more of their wealth onto a single platform.

Fidelity is aware of this issue and head of personal investing Mark Till says: “We have already announced as a business we are making a significant investment in the platform, part of that is to look at our brokerage offering which is an ongoing process.”

Retiring clients is another opportunity that Fidelity is targeting, following the launch of the Fidelity Retirement Service which integrates the expertise it acquired with Annuities Direct last year. With the new pension freedoms enabling people to continue to hold their assets on platform into the decumulation phase, this looks like a good area for Fidelity to invest in and their guided service, which is mainly telephone-based, fits nicely between full advice and The Pensions Advisory Service.

Jeremy Fawcett is head of direct at The Platforum




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