Fidelity Investments 401K Plans
Fidelity Investments is a large financial firm that provides broad retirement services. Those services extend from managing assets, administering a retirement plan and advising plan members on the right investments to select. A 401(k) is among the products offered by Fidelity in addition to other retirement solutions. In a 401(k), Fidelity offers thousands of mutual funds to choose from managed by the firm's own asset management staff. The first step to gaining access to a Fidelity 401(k) is to join an employer's plan.
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Function
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Fidelity Investments is a one-stop shop for financial planning. The firm serves as a 401(k) administrator, which means it supplies the mutual fund offerings that plan members can invest in. Some administrators use mutual funds managed by different asset managers but Fidelity has its own asset manager arm so it can offer its own funds. Also, a wealth management division at the firm can provide investors with financial advice.
Features
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After enrolling with an employer's retirement plan, plan members can begin making some key decisions. In a Fidelity Investments 401(k) plan, one of the first steps will be to decide how much the plan member will contribute from his salary and if the company will match those contributions. Fidelity encourages plan members to register online to gain access to all of the choices available. Investment choices, which include stock funds and bond funds, can be selected online.
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Types
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A 401(k) plan is designed so plan members select which mutual funds to invest in. The options are provided by the administrator, such as Fidelity Investments. Depending on the agreement between the employer and Fidelity, a dozen or more funds will be available to choose from across different asset classes, including stocks, bonds and real estate. Fidelity has an online education center for 401(k) investing that includes resources to help plan members attain financial goals.
Considerations
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The amount of money that flows into and out of a mutual fund is closely watched by the investment community and ratings agencies. In April 2011, Moody's, a ratings firm, slashed its outlook on Fidelity to a negative status in response to massive outflows from stock mutual funds considered to be revenue drivers for the firm, according to Reuters. Fidelity also suffered from under-performance in some key mutual funds, conditions that can trigger losses in a 401(k) plan.
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