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BOSTON, February 1, 2006 —Fidelity Investments today announced that National Financial, its clearing business, and its registered investment advisor (RIA) custody business each introduced a flexible managed account program designed to meet the distinct needs of correspondent broker/dealer firms and RIAs, respectively. Integrated into the company's Streetscape® broker workstation, National Financial's Managed Account SolutionsSM is a flexible program designed to help broker/dealer firms increase their fee-based revenue, acquire affluent investors and recruit top brokers. Originally announced in April 2005, National Financial's offering is being introduced to the company's more than 350 clients, who collectively have more than 65,000 brokers. Fidelity Managed Account ResourcesSM, being developed in collaboration with Chicago-based Envestnet Asset Management Inc., will be the first open architecture unified managed account (UMA) platform delivered by an RIA-focused custodian. This program will allow Fidelity's more than 3,000 RIA clients to create a unified managed account on an integrated platform that provides a range of investment choices combined with operations resources such as performance reporting and model management tools. The program is in pilot phase and is expected to be generally available in spring 2006. "With more than $17 trillion in untapped investable assets1, U.S. investors will likely demand more advice than ever over the coming years," said Norman Malo, president and CEO, National Financial. "A likely beneficiary of this demand will be managed accounts, where advice is at the core. "Managed Account Solutions sets a new standard for managed account programs by providing broker/dealer firms access to an integrated, flexible offering that can help them effectively and efficiently grow their fee-based businesses," said Malo. "While we are in the beginning stages of introducing to broker/dealer clients, we are receiving substantial interest from our clients for Managed Account Solutions." "For years, RIAs have been turning to custodians to outsource not only clearing and custody but also non-core competencies, such as technology. What is new, however, is the degree with which RIAs are expanding their outsourcing of investment management," said William Carey, president, Fidelity Registered Investment Advisor Group. "Fidelity is redefining RIA outsourcing by providing a unified managed account that is designed to offer RIAs a flexible and customizable solution they can tailor to the way they do business." National Financial's Managed Account Solutions for Broker/Dealers Each investment advisory program, whether the broker uses one, some, or all four options, features a wide array of investment services and business-building resources, such as client profiling, portfolio diagnostic and proposal tools, consolidated reporting and model management capabilities, that are integrated into National Financial's Streetscape workstation and client services infrastructure. This integration can help facilitate greater oversight and control for broker/dealer firms. As part of the overall offering, National Financial also has developed a complete end-to-end broker adoption program designed to help broker/dealer firms effectively and efficiently drive Managed Account Solutions growth. Business building resources include turn-key selling tools, ongoing sales support, as well as training and education. National Financial collaborated with Envestnet, the largest independent provider of comprehensive wealth management solutions , and Strategic Advisers, Inc., a Fidelity Investments company, to develop Managed Account Solutions. Strategic Advisers, Inc., one of the industry's largest providers of mutual fund wrap services, will sub-advise the mutual fund wrap program within Managed Account Solutions.
Fidelity Managed Account Resources for RIAs Fidelity Managed Account Resources is being designed to simplify RIAs' back-office operations and portfolio administration by providing them with a selection of operations resources. These resources can be purchased in two packages or on an a la carte basis based on the specific needs of the RIA. In addition to Fidelity Managed Account Resources, Fidelity also offers RIAs access to a range of third-party turnkey asset management providers (TAMPs). "Servicing high-net-worth clients and managing operations without adding overhead costs-or overextending existing resources-can be a challenge," said Carey. "Fidelity Managed Account Resources will offer RIAs the ability to use-and pay for-only those resources they need to support their business model. In addition, as an integrated UMA, our program will give RIAs the benefit of a single contract across multiple investment managers, helping to reduce the amount of paperwork, legal, regulatory and administrative complexity." Specific to separately managed accounts, Fidelity Managed Account Resources will offer two distinct programs based on whether or not an advisor wants to perform his own due diligence and select separate account managers. Manager Resource Wrap is a traditional separate account wrap program that includes due diligence and performance reporting. Manager Resource Network is an open architecture program that provides RIAs that wish to perform their own due diligence direct access to separate account managers at pre-negotiated fees and account minimums that may be lower than those associated with dual contract separate account programs. Moreover, RIAs will be able to access these managers through a single investment contract, thereby streamlining the paperwork associated with interacting with these sub-advisors.
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