It's an assumption that Fidelity is losing money on customers who don't use their advisory services. Their MMF fees are quite high, and many brokerage customers likely also own some higher-fee Fidelity stock or bond funds. And Fidelity offers several zero-fee funds, which, presumably, are meant to appeal to cost-conscious self-directed index investors. Why would they offer these if they attract the kind of customer they'd lose money on?Why would Fidelity, or any brokerage, want to retain customers on whom they lose money? I assume that at some point, they either have to find a way to make money off of those customers or stop providing them with unreimbursed services. I won't be surprised if Fidelity institutes new fees or charges for DIY investors who hold only Vanguard ETFs at Fidelity.The timing is interesting. Schwab just cancelled offering a live advisor to support their Intelligent Portfolios
service. I think there's a shortage of trained advisors these days, so it's probably a way to lower costs. When we were at Fidelity, our assigned advisor/consultant told us they offered it as a customer retention tool and it was actually a loss leader for Fidelity.
Adding a fee structure for some customers but not others means they have to decide what the criteria are for customers to avoid the fees. That gets difficult - they could say you have to have at least $X in Fidelity fee funds, etc. But no matter what they do, the fees would probably drive some customers away who, even if they aren't making Fidelity much money now, could very well become profitable in the future. Under the assumption that independent investors that don't make Fidelity a lot of money are also not that expensive to support and maintain, I'd think Fidelity would want to cast as broad a net as possible to capture as much of the market share as they can. So far that's what they're doing, and I don't see how canceling personal advisors on accounts where the customer has no interest in having a personal advisor (and certainly not in paying for one) is inconsistent with that. It's just matching the product to the customer.
Statistics: Posted by snic — Fri Jan 23, 2026 11:18 am — Replies 36 — Views 2136