Fidelity Investments has introduced five new index funds, most of them sporting expense ratios of just 5 basis points. Because advisors no longer serve as gatekeepers to products, and those products are becoming nearly free, there’s no reason for investors to turn to an advisor…but for advice. This podcast (5:26) argues that that means that advisors have never been freer to articulate their value proposition. But, at the same time, one lesson of Fidelity’s indexing campaign best not ignored is that part of an advisors’ appeal will depend on fees that seem reasonable to consumers in an increasingly competitive marketplace.
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