Fidelity Preferred Services?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
bigtex
Posts: 102
Joined: Fri Jan 26, 2018 10:34 am

Fidelity Preferred Services?

Post by bigtex » Wed Jun 13, 2018 6:46 pm

I have noticed that my monthly investment statements say Fidelity Preferred Services at the top. Do any of you Fidelity users know what this classification means or what benefits might come with it?

User avatar
whodidntante
Posts: 4307
Joined: Thu Jan 21, 2016 11:11 pm

Re: Fidelity Preferred Services?

Post by whodidntante » Wed Jun 13, 2018 6:52 pm

As a Fidelity Preferred Services client, you can call customer service and ask what it means.

Jack FFR1846
Posts: 8088
Joined: Tue Dec 31, 2013 7:05 am

Re: Fidelity Preferred Services?

Post by Jack FFR1846 » Wed Jun 13, 2018 7:12 pm

Asking google "what is fidelity preferred services?" gets me (I opened nothing) that it's $100k. At $250k you get premium services. I'm a Private Client which I think is over $1MM. There's likely something in between and above. Maybe caterpillar services and round robin services.....

I do know that as a private client, I can tell them not to bother me......and they won't.
Bogle: Smart Beta is stupid

bigtex
Posts: 102
Joined: Fri Jan 26, 2018 10:34 am

Re: Fidelity Preferred Services?

Post by bigtex » Wed Jun 13, 2018 7:17 pm

Jack FFR1846 wrote:
Wed Jun 13, 2018 7:12 pm
Asking google "what is fidelity preferred services?" gets me (I opened nothing) that it's $100k. At $250k you get premium services. I'm a Private Client which I think is over $1MM. There's likely something in between and above. Maybe caterpillar services and round robin services.....

I do know that as a private client, I can tell them not to bother me......and they won't.
Jack thanks for your response. As a Private Client, what benefits do you get or do you do anything different with Fidelity by being a Private Client?

marcopolo
Posts: 1277
Joined: Sat Dec 03, 2016 10:22 am

Re: Fidelity Preferred Services?

Post by marcopolo » Wed Jun 13, 2018 10:56 pm

bigtex wrote:
Wed Jun 13, 2018 7:17 pm
Jack FFR1846 wrote:
Wed Jun 13, 2018 7:12 pm
Asking google "what is fidelity preferred services?" gets me (I opened nothing) that it's $100k. At $250k you get premium services. I'm a Private Client which I think is over $1MM. There's likely something in between and above. Maybe caterpillar services and round robin services.....

I do know that as a private client, I can tell them not to bother me......and they won't.
Jack thanks for your response. As a Private Client, what benefits do you get or do you do anything different with Fidelity by being a Private Client?
I am not Jack, but maybe i could provide some info.

You get assigned an individual advisor. The one i got seems really good. He is a CFP, and seems to very knowledgeable. You can instruct them to the level of interaction you want to have. I told them "don't call me, I will call you" They never bug me. I have met with him a couple of times to review specific things. At the last meeting, we had an interesting conversation about the tax inefficiency of FSTVX vs VTSAX

You get a different Customer Service number. I have never had a wait time longer than a minute since i got this.

You get free Turbo Tax Premier (although there seems to some discussion here that not everyone gets that). I have received it every year.

I suspect there are other perks that i am not aware of, but those are the ones I feel like provided some benefit.
Once in a while you get shown the light, in the strangest of places if you look at it right.

MikeG62
Posts: 1219
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Fidelity Preferred Services?

Post by MikeG62 » Thu Jun 14, 2018 6:29 am

marcopolo wrote:
Wed Jun 13, 2018 10:56 pm

...At the last meeting, we had an interesting conversation about the tax inefficiency of FSTVX vs VTSAX
Marcopolo, Curious as to the specifics of this conversation. From a quick look at both funds, it appears the after-tax returns as a % of the before-tax returns are almost identical (I compared the trailing 5 and 10 year returns). I wonder what your advisors point was when comparing those two funds (other than the Fidelity fund ER is 0.5 basis points lower than the Vanguard fund)?

I too am a private client and my experience is similar to yours. My advisor has not reached out in a while (like you I have told him "don't call me I'll call you"), although he used to contact me once every year or two (despite my request). I think he has finally gotten the message I am not interested in his advice as every investment idea he has ever suggested I was able to shoot down as not as good as what I was already doing (or not as good as he was trying to suggest it was).
Real Knowledge Comes Only From Experience

student
Posts: 2671
Joined: Fri Apr 03, 2015 6:58 am

Re: Fidelity Preferred Services?

Post by student » Thu Jun 14, 2018 6:42 am

I vaguely remember reading somewhere that Fidelity no longer offers preferred services or premium services to new clients. I am not able to find anything on these two tiers on its website. I did find the following via google but I do not know whether the info is current. https://workplacecontent.fidelity.com/b ... rvices.pdf

The info that I did find on its website is private client requiring 1M, excluding 401k type accounts. https://www.fidelity.com/growing-managi ... t-services

Jack FFR1846
Posts: 8088
Joined: Tue Dec 31, 2013 7:05 am

Re: Fidelity Preferred Services?

Post by Jack FFR1846 » Thu Jun 14, 2018 7:13 am

To answer: As a private client, I get 2 things. One, as mentioned, I get free turbo tax, which can be downloaded if you are clever (I am). The other is that when I ask my private client manager to not bother me, he doesn't bother me.

The downside is that if I call, I'm immediately tagged as a private client with a manager and am asked if I want to be transferred to him. No.....I don't want to leave a voicemail for someone to then call me with the answer and of course use the opportunity to weazle questions about getting managed. I tell them no, I don't want to speak with my manager. They're always good and will then directly answer my question.
Bogle: Smart Beta is stupid

MikeG62
Posts: 1219
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Fidelity Preferred Services?

Post by MikeG62 » Thu Jun 14, 2018 7:22 am

Jack FFR1846 wrote:
Thu Jun 14, 2018 7:13 am
To answer: As a private client, I get 2 things. One, as mentioned, I get free turbo tax, which can be downloaded if you are clever (I am). The other is that when I ask my private client manager to not bother me, he doesn't bother me.

The downside is that if I call, I'm immediately tagged as a private client with a manager and am asked if I want to be transferred to him. No.....I don't want to leave a voicemail for someone to then call me with the answer and of course use the opportunity to weazle questions about getting managed. I tell them no, I don't want to speak with my manager. They're always good and will then directly answer my question.
I too just call the Private Client dedicated number when I have a question. Always get someone on the phone right away. After they answer my question they sometimes remind me that I have a dedicated advisor that I can talk to if I wish. I tell them I know that and thank them for their response. Like FFR1846, I do not need to talk to anyone whose real interest is in selling me something. The folks in the PC group never once have tried to sell me anything.

This is not to say that I never want to speak with my advisor, just that I don’t want to unless absolutely necessary.
Real Knowledge Comes Only From Experience

Chip
Posts: 2371
Joined: Wed Feb 21, 2007 4:57 am

Re: Fidelity Preferred Services?

Post by Chip » Thu Jun 14, 2018 8:17 am

MikeG62 wrote:
Thu Jun 14, 2018 7:22 am
I too just call the Private Client dedicated number when I have a question. Always get someone on the phone right away. After they answer my question they sometimes remind me that I have a dedicated advisor that I can talk to if I wish.
Interesting. I can't recall ever being reminded by a rep that I have a dedicated advisor. Perhaps "bug off" messages from years ago took hold. Just looking at a recent statement I note that there is no longer an advisor's name on it. But a while back the first page of the statement used to say "Your Senior Account Executive" plus <name>. Then it went to "Your Account Executive" plus <name>. Then in April of 2015 it all disappeared.

Maybe I'm being downgraded in Fidelity's system for buying Vanguard ETFs. :D

But I still get free TurboTax, so I've got that goin' for me. Which is nice. :P

student
Posts: 2671
Joined: Fri Apr 03, 2015 6:58 am

Re: Fidelity Preferred Services?

Post by student » Thu Jun 14, 2018 8:20 am

Chip wrote:
Thu Jun 14, 2018 8:17 am
Maybe I'm being downgraded in Fidelity's system for buying Vanguard ETFs. :D
Do you hold any Fidelity fund? The page that I saw says $1M total and $250k with Fidelity.

Horsefly
Posts: 318
Joined: Sat Oct 24, 2015 8:13 am
Location: Colorado, mostly

Re: Fidelity Preferred Services?

Post by Horsefly » Thu Jun 14, 2018 8:36 am

I've been with the Private Client Group for many years. There's always been an individual advisor assigned to me. I'm now on my third one, as the first two moved on after a few years.

All three have been similar in their interaction. If I needed something from them (only have once for each of them so far), they were quick to do it and seemed to have great latitude from Fidelity when doing it. The second thing is that they let me know a couple of times per year that they would be happy to sit down with me and review what I have, but they also know I drive my own investments. The current advisor has said that he knows I don't want to be bothered, so he won't bother me. The only thing he asks is that if I am ever thinking about taking my money out of Fidelity, that he would like the opportunity to discuss it. That seems fair.

The free download of TurboTax is nice, but as others have mentioned it sometimes is really hard to find.

Chip
Posts: 2371
Joined: Wed Feb 21, 2007 4:57 am

Re: Fidelity Preferred Services?

Post by Chip » Thu Jun 14, 2018 8:41 am

student wrote:
Thu Jun 14, 2018 8:20 am
Do you hold any Fidelity fund? The page that I saw says $1M total and $250k with Fidelity.
I do, a small holding in FSTVX (Fidelity Total Market Index Fund Premium Class).

To clarify, all of the Vanguard ETFs that I own are held at Fidelity and therefore count towards Private Client status. So Private Client Group® is emblazoned across the top of every page of every statement.

marcopolo
Posts: 1277
Joined: Sat Dec 03, 2016 10:22 am

Re: Fidelity Preferred Services?

Post by marcopolo » Thu Jun 14, 2018 8:54 am

MikeG62 wrote:
Thu Jun 14, 2018 6:29 am
marcopolo wrote:
Wed Jun 13, 2018 10:56 pm

...At the last meeting, we had an interesting conversation about the tax inefficiency of FSTVX vs VTSAX
Marcopolo, Curious as to the specifics of this conversation. From a quick look at both funds, it appears the after-tax returns as a % of the before-tax returns are almost identical (I compared the trailing 5 and 10 year returns). I wonder what your advisors point was when comparing those two funds (other than the Fidelity fund ER is 0.5 basis points lower than the Vanguard fund)?

I too am a private client and my experience is similar to yours. My advisor has not reached out in a while (like you I have told him "don't call me I'll call you"), although he used to contact me once every year or two (despite my request). I think he has finally gotten the message I am not interested in his advice as every investment idea he has ever suggested I was able to shoot down as not as good as what I was already doing (or not as good as he was trying to suggest it was).
I had asked for the meeting just to have another set of eyes take a look at portfolio and retirement/withdrawal plan. He had a couple of minor suggestions that might be helpful. He actually brought up tax efficiency and commented on how i was set up pretty well. That is when i brought up the issue with FSTVX (based on several threads i had read here). At first he said that was not the case. Interestingly, you get different numbers depending on the source you use to compare performance. I am still not sure why that is.

Eventually, we agreed to use Morningstar as a neutral source. Their performance numbers are shown below. As you can see, FSTVX takes a bigger tax hit. The pretax results a re very close to VSTAX at all durations, but the after tax lags across the board by about 15-20 basis points. He eventually agreed that it did seem to be the case. He said he would have to ask internally to understand why that might be the case, and get back to me. That was only a week ago, but i am not holding out much hope that i will get a meaningful response. I do think that would be expecting too much.


1-Yr 3-Yr 5-Yr 10-Yr
Pretax Return
FSTVX 15.08 10.68 12.78 9.25
Tax-adjusted Return *
FSTVX 14.09 9.66 11.83 8.41

Pretax Return
VTSAX 15.11 10.70 12.83 9.32
Tax-adjusted Return *
VTSAX 14.23 9.99 12.07 8.77
Once in a while you get shown the light, in the strangest of places if you look at it right.

marcopolo
Posts: 1277
Joined: Sat Dec 03, 2016 10:22 am

Re: Fidelity Preferred Services?

Post by marcopolo » Thu Jun 14, 2018 8:58 am

Jack FFR1846 wrote:
Thu Jun 14, 2018 7:13 am


The downside is that if I call, I'm immediately tagged as a private client with a manager and am asked if I want to be transferred to him. No.....I don't want to leave a voicemail for someone to then call me with the answer and of course use the opportunity to weazle questions about getting managed. I tell them no, I don't want to speak with my manager. They're always good and will then directly answer my question.
Interesting, I have never been asked if i wanted to talk to my adviser. Neither the reps i talk to nor my adviser has ever tried to sell me anything, neither products nor services. I think they pretty quickly got the message that i am a low-cost, do-it-yourself type.
Once in a while you get shown the light, in the strangest of places if you look at it right.

student
Posts: 2671
Joined: Fri Apr 03, 2015 6:58 am

Re: Fidelity Preferred Services?

Post by student » Thu Jun 14, 2018 9:25 am

Chip wrote:
Thu Jun 14, 2018 8:41 am
student wrote:
Thu Jun 14, 2018 8:20 am
Do you hold any Fidelity fund? The page that I saw says $1M total and $250k with Fidelity.
I do, a small holding in FSTVX (Fidelity Total Market Index Fund Premium Class).

To clarify, all of the Vanguard ETFs that I own are held at Fidelity and therefore count towards Private Client status. So Private Client Group® is emblazoned across the top of every page of every statement.
Thanks.

MikeG62
Posts: 1219
Joined: Tue Nov 15, 2016 3:20 pm
Location: New Jersey

Re: Fidelity Preferred Services?

Post by MikeG62 » Thu Jun 14, 2018 11:06 am

marcopolo wrote:
Thu Jun 14, 2018 8:54 am
MikeG62 wrote:
Thu Jun 14, 2018 6:29 am
marcopolo wrote:
Wed Jun 13, 2018 10:56 pm

...At the last meeting, we had an interesting conversation about the tax inefficiency of FSTVX vs VTSAX
Marcopolo, Curious as to the specifics of this conversation. From a quick look at both funds, it appears the after-tax returns as a % of the before-tax returns are almost identical (I compared the trailing 5 and 10 year returns). I wonder what your advisors point was when comparing those two funds (other than the Fidelity fund ER is 0.5 basis points lower than the Vanguard fund)?

I too am a private client and my experience is similar to yours. My advisor has not reached out in a while (like you I have told him "don't call me I'll call you"), although he used to contact me once every year or two (despite my request). I think he has finally gotten the message I am not interested in his advice as every investment idea he has ever suggested I was able to shoot down as not as good as what I was already doing (or not as good as he was trying to suggest it was).
I had asked for the meeting just to have another set of eyes take a look at portfolio and retirement/withdrawal plan. He had a couple of minor suggestions that might be helpful. He actually brought up tax efficiency and commented on how i was set up pretty well. That is when i brought up the issue with FSTVX (based on several threads i had read here). At first he said that was not the case. Interestingly, you get different numbers depending on the source you use to compare performance. I am still not sure why that is.

Eventually, we agreed to use Morningstar as a neutral source. Their performance numbers are shown below. As you can see, FSTVX takes a bigger tax hit. The pretax results a re very close to VSTAX at all durations, but the after tax lags across the board by about 15-20 basis points. He eventually agreed that it did seem to be the case. He said he would have to ask internally to understand why that might be the case, and get back to me. That was only a week ago, but i am not holding out much hope that i will get a meaningful response. I do think that would be expecting too much.


1-Yr 3-Yr 5-Yr 10-Yr
Pretax Return
FSTVX 15.08 10.68 12.78 9.25
Tax-adjusted Return *
FSTVX 14.09 9.66 11.83 8.41

Pretax Return
VTSAX 15.11 10.70 12.83 9.32
Tax-adjusted Return *
VTSAX 14.23 9.99 12.07 8.77
That is interesting as the data on Fidelity's own site shows a better tax efficiency for FSTVX than the numbers above.

1Yr, 3Yr, 5Yr, 10yr Returns (as of April 28):

Before-Tax = 13.84%, 10.21%, 12.98%, 9.67%
After-Tax = 13.19%, 9.56%, 12.41%, 9.41%
% of Before Tax Return Retained = 95.3%, 93.6%, 95.6%, 97.3%

This compares to the Vanguard fund:

% of Before Tax Return Retained = 94.2%, 93.3%, 94.1%, 94.1%

Morningstar and Fidelity must be computing after-tax returns differently.
Real Knowledge Comes Only From Experience

marcopolo
Posts: 1277
Joined: Sat Dec 03, 2016 10:22 am

Re: Fidelity Preferred Services?

Post by marcopolo » Thu Jun 14, 2018 11:10 am

MikeG62 wrote:
Thu Jun 14, 2018 11:06 am
marcopolo wrote:
Thu Jun 14, 2018 8:54 am
MikeG62 wrote:
Thu Jun 14, 2018 6:29 am
marcopolo wrote:
Wed Jun 13, 2018 10:56 pm

...At the last meeting, we had an interesting conversation about the tax inefficiency of FSTVX vs VTSAX
Marcopolo, Curious as to the specifics of this conversation. From a quick look at both funds, it appears the after-tax returns as a % of the before-tax returns are almost identical (I compared the trailing 5 and 10 year returns). I wonder what your advisors point was when comparing those two funds (other than the Fidelity fund ER is 0.5 basis points lower than the Vanguard fund)?

I too am a private client and my experience is similar to yours. My advisor has not reached out in a while (like you I have told him "don't call me I'll call you"), although he used to contact me once every year or two (despite my request). I think he has finally gotten the message I am not interested in his advice as every investment idea he has ever suggested I was able to shoot down as not as good as what I was already doing (or not as good as he was trying to suggest it was).
I had asked for the meeting just to have another set of eyes take a look at portfolio and retirement/withdrawal plan. He had a couple of minor suggestions that might be helpful. He actually brought up tax efficiency and commented on how i was set up pretty well. That is when i brought up the issue with FSTVX (based on several threads i had read here). At first he said that was not the case. Interestingly, you get different numbers depending on the source you use to compare performance. I am still not sure why that is.

Eventually, we agreed to use Morningstar as a neutral source. Their performance numbers are shown below. As you can see, FSTVX takes a bigger tax hit. The pretax results a re very close to VSTAX at all durations, but the after tax lags across the board by about 15-20 basis points. He eventually agreed that it did seem to be the case. He said he would have to ask internally to understand why that might be the case, and get back to me. That was only a week ago, but i am not holding out much hope that i will get a meaningful response. I do think that would be expecting too much.


1-Yr 3-Yr 5-Yr 10-Yr
Pretax Return
FSTVX 15.08 10.68 12.78 9.25
Tax-adjusted Return *
FSTVX 14.09 9.66 11.83 8.41

Pretax Return
VTSAX 15.11 10.70 12.83 9.32
Tax-adjusted Return *
VTSAX 14.23 9.99 12.07 8.77
That is interesting as the data on Fidelity's own site shows a better tax efficiency for FSTVX than the numbers above.

1Yr, 3Yr, 5Yr, 10yr Returns (as of April 28):

Before-Tax = 13.84%, 10.21%, 12.98%, 9.67%
After-Tax = 13.19%, 9.56%, 12.41%, 9.41%
% of Before Tax Return Retained = 95.3%, 93.6%, 95.6%, 97.3%

This compares to the Vanguard fund:

% of Before Tax Return Retained = 94.2%, 93.3%, 94.1%, 94.1%

Morningstar and Fidelity must be computing after-tax returns differently.
Yeah, that was what the adviser was initially looking at as well. I am not sure how to explain the discrepancy.
If i recall correctly, the vanguard website numbers also differed from M* with respect to VTSAX.
Once in a while you get shown the light, in the strangest of places if you look at it right.

SlowMovingInvestor
Posts: 916
Joined: Sun Sep 11, 2016 11:27 am

Re: Fidelity Preferred Services?

Post by SlowMovingInvestor » Thu Jun 14, 2018 5:42 pm

Chip wrote:
Thu Jun 14, 2018 8:17 am
MikeG62 wrote:
Thu Jun 14, 2018 7:22 am
I too just call the Private Client dedicated number when I have a question. Always get someone on the phone right away. After they answer my question they sometimes remind me that I have a dedicated advisor that I can talk to if I wish.
Interesting. I can't recall ever being reminded by a rep that I have a dedicated advisor. Perhaps "bug off" messages from years ago took hold. Just looking at a recent statement I note that there is no longer an advisor's name on it. But a while back the first page of the statement used to say "Your Senior Account Executive" plus <name>. Then it went to "Your Account Executive" plus <name>. Then in April of 2015 it all disappeared.

I see my advisor's name online on the main page when I log in. I've never really used her much, and she hasn't called me pushing products either.

Fido's customer service is generally excellent, so I am not sure if Private Client adds that much more except faster response times.

I do get free TT Premier.

Kompass
Posts: 147
Joined: Sat Oct 01, 2016 5:42 pm

Re: Fidelity Preferred Services?

Post by Kompass » Thu Jun 14, 2018 8:10 pm

Will have to look for the TT link next year.

I also get a Christmas card. :D
The large print giveth and the fine print taketh away.

Post Reply