MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Wednesday, August 2, 2000 Fidelity Gets into Payroll Fidelity Investments today announced that it is getting into the payroll business. The fund giant is making the move to ease the administrative burden faced by small business owners and to provide tools to employees to help them make "better informed decisions." Also today, ADP announced that it has entered into a relationship with America Online (AOL) to highlight its products aimed a small businesses and to provide decision making tools to small businesses. Among that services highlighted in the arrangement will be ADP's small business 401(k) plan and its simple 401(k). Brad Smith, vice president and general manager, ADP Emerging Business Services said the firm entered into the alliance to highlight its suite of solutions, which helps small businesses staff, manage, pay and retain employees, AOL's Web properties including Netscape, Netcenter, AOL, AOL.com and CompuServe. These sites all now provide links to ADP's Solution Profiler, a tool that delivers real-time, customized price quotes to businesses. In explaining the decision to partner with AOl, ADP emphasized the decision-making tools and education it is offering AOL users. These comments echo those Fidelity used in explaining decision to enter payroll administration. The moves by both firms highlight the growing importance of leveraging the corporate information flow in small business to firm's hoping to capture the retirement assets in this emerging market. "The end game is generating revenue from invested assets," explains Ward Harris, managing director at McHenry Consulting. He adds that it is unlikely that Fidelity, at its core, wants to be providing non-investment-based benefits unless it drives assets to investment management platform. "Whoever controls the payroll relationship will be in a much better position to capture the asset flows as the retirement plan business moves from plan sponsor vendor selection to participant vendor selection ala 403b plans," says Harris. Fidelity's new service, called Fidelity Electronic Payroll, is targeted at companies with up to 500 employees and is part of a suite of Internet-based services. These services include Fidelity's e401k, Plan Sponsor WebStation and NetBenefits. The unit is headed by Peter Smail, president, Fidelity Employer Services Company. Fidelity is not new to the payroll administration business. It already handles this function for a number of large companies, including itself. Printed from: MFWire.com/story.asp?s=26095 Copyright 2000, InvestmentWires, Inc. All Rights Reserved |