Fidelity Aligns With Frank Russell on Separately Managed Account Program

October 03, 2001, 1:00 a.m. EDT 2 Min Read

Fidelity Investments Institutional Brokerage Gro up and Frank Russell Co. announced today an alliance in which Fidelity will distribute Russells new multi-manager separately managed account program through its registered investment advisors and correspondent broker/dealers.

Russells program, called Russell Managed Portfolios, is designed to allow RIAs and correspondent broker/dealers target high-net-worth clients with sophisticated investing needs, said David Denison, president of Fidelity IBG, on a media conference call.

The program, which has a minimum initial investment of $300,000, offers 12 multi-manager portfolio mixes with varying market categories and investment objectives, each with two to five unaffiliated investment managers that have been selected by Russell. Those are: Garner Lewis Asset Management, Marsico Capital Management, Gulf Investment Management, Parametric Portfolio Associates, ICM Asset Management, Rainier Investment Management, J.P. Morgan Fleming Asset Management, Thornburg Investment Management, Kayne Anderson Rudnick Investment Management, Turner Investment Partners and KR Capital Advisors. Russell will continually monitor and evaluate its manager selections, according to the company. The companies did not disclose the pricing structure of the program because it is variable depending on the size of the account and the asset mix.

Russell Managed Portfolios is scheduled to be operational on Nov. 5. It will initially be available only through RIAs on Fidelitys institutional brokerage platform, but is expected to be available to correspondent broker/dealers in 2002, the company said.

This month, Fidelity will introduce the new program to the advisors on its platform. Then early in November and December the firm will undertake a national road show introducing it to advisors in 11 cities.

Frank Russell has been looking at the high-net-worth market to research tax aware managers and, over the past two years, has been analyzing separate account programs and has formed a leading RIA advisory board. "We realized that we just did not have the scale or the investment capacity to have our own state of the art platform," said Russell CEO Mike Phillips. The company then sought a partner, and in doing so "talked to everybody." The firm chose Fidelity because they provided "the best combination of the deliverable and the economics," said Phillips. The companies would not disclose the economics of the alliance.

"Our alliance with Frank Russell is another in a series of initiatives designed to strengthen fidelitys wealth management platform for advisors and broker/dealers," said Denison. Earlier this year, the firm launched Fidelity Advisor Access, a referral program for advisors. In the next few months, it plans to announce several additional high-net-worth services, including a structured equity program and enhanced asset management account program, Denison said.