Fidelity International Australia plans to lower the minimum investment threshold for its managed funds from $500,000 to less than $50,000 in an effort to attract more direct investors to the firm.
“Our funds, at the moment, you can only buy if you walk in off the street and you’ve got half a million or more. We might seek to change that,” Fidelity Investments Australia managing director Gerard Doherty said yesterday.
Currently, Fidelity only offers its products to the institutional and platform market.
But there is a growing demand from financial planners who do not use platforms, as well as from direct investors including self-managed super funds (SMSFs).
“We know that the self-managed super market is 30 per cent of the assets now,” Doherty said. “Research suggests that about half of that market is self-selecting.”
To be able to lower its threshold, Fidelity will need to build up its back office to deal with an increase in account numbers.
“We are a reasonably small business in Australia,” Doherty said. “So, we’ve just got to build a more robust back end.”
But the current financial climate makes it hard to commit funds to this project, he said.
“If you look at our competitors the majority you can buy at much lower minimums, but we will get there,” he said. “It might be a year, it might be two years.”
