Fidelity is transitioning advisor portfolios to FCASH as the only core sweep option

CityWire first reported this week on the change, which is expected to take effect in February.

According to Fidelity’s website, the seven-day return on Fidelity’s SPAXX fund was 4.27% as of Tuesday. As CityWire noted, Fidelity uses the SPAXX fund for retail client cash sweep balances.

Kitces.com, the website of investment strategist and speaker Michael Kitces, posted on Facebook: “A reminder once again that the services of an RIA custodian are not actually free if we use them ‘free’ and the custodian MUST generate income .” somehow to provide the services it offers. If we don’t pay directly, it will be taken away from our customers.”

FCASH was the only core sweep account option for new non-retirement brokerage accounts managed by RIAs last year, and also the only core sweep account option for changes to new or existing non-retirement core sweep accounts.

Several investment managers, including JPMorgan Chase, Wells Fargo, LPL Financial, Morgan Stanley, Ameriprise Financial, Merrill and PNC Financial Services, have been sued in recent months by clients who claim the firms enriched themselves at clients’ expense by underwriting Interest rates for uninvested cash balances were below the market price.