3 ways to access hands-off investing
If you’d rather not build and manage a portfolio yourself, here are 3 basic approaches that let professionals and technology do the work for you.
1. Roboadvisors
One of the most accessible ways to get professional portfolio management is through roboadvisors, digital tools that use technology to build and manage diversified portfolios.
These platforms typically recommend a mix of stocks, bonds, and cash equivalents based on your goals and risk tolerance, then rebalance allocations as market conditions change or if your portfolio begins drifting from its target asset mix. These tools are increasingly popular because they can offer many benefits of money management with lower minimums and fees.
At Fidelity Go®, for example, there’s no fee on balances under $25,000. Above that, clients pay 0.35% annually, which gives them access to financial coaches and digital tools that can help with budgeting, retirement saving, and other goals, as well as tax-smart trading strategies.1
2. Separately managed accounts
Another option is a separately managed account, or SMA. With an SMA, investors have direct ownership of underlying securities in an account managed by a team of professionals. With a mutual fund, by contrast, you own shares of a pooled portfolio.
Some investors favor separately managed accounts because they may offer greater control, transparency, and tax efficiency than mutual funds. The SMA structure can offer flexibility, including the ability to tailor portfolios around preferences or values. They may also deliver more precise tax-aware management.
In addition to traditional SMAs, advances in technology have paved the way for digital platforms that build and oversee managed accounts. Fidelity Managed FidFolios® is one example.
This digital approach builds customizable portfolios of individual stocks managed by professionals, using direct indexing or active management. The service monitors markets, selects investments, and can employ tax-loss harvesting strategies that in some circumstances may help offset taxable gains.
3. Hire a financial professional
For investors who may have more complex financial lives and want more personalized guidance, working with a professional financial professional typically provides the highest level of support.
A dedicated wealth advisor can help build and manage your portfolio while also offering guidance on big-picture financial decisions, such as retirement planning, income-generating strategies, and preparing for major life events.
Fidelity Advisory Services
, for example, offers diversified portfolios managed with tax-smart techniques. Clients with at least $50,000 to invest have access to a team of financial planners to develop and adjust a long-term strategy.
