Insights | 04.21.21
Advisors Drift Away From Traditional Portfolios, Fidelity Says
According to Fidelity Investments, advisors are favoring more risky or conservative allocations over traditional 60/40 portfolios. The Fidelity report, “Trends in Portfolio Construction,” says there was a decline in moderate and moderate aggressive portfolios from 65 percent to 59 percent. In contrast, there was an increase in conservative portfolios from 11 percent to 15 percent. There was also an increase in aggressive portfolios from 13 percent to 15 percent. Matt Goulet, senior vice president for portfolio solutions at Fidelity Institutional, says the trend reflects the unusual business conditions experienced last year. The pandemic caused investors and advisors to respond differently at various points during the year. He believes this trend will continue throughout 2021. "The role of the financial advisor is becoming increasingly complex, and the expectations of clients, particularly younger clients, are growing. The clients expect cash flow analysis and projections about whether they are on track for retirement, as well as other services. As advisors seek to meet these clients’ needs, they have less time to work on portfolio construction,” said Goulet.
Read the full article on Financial Advisor.