Fidelity Investments is trimming fees on its college savings plans as Americans grapple with soaring costs for higher education and leave school with record debt.
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One of the country's biggest brokerages, Fidelity cut fees on 15 of its 22 college porfolios and introduced eight 529 Blend portfolios, a number that references the section of federal law making such plans tax-free. The portfolios will combine active investments, which are overseen by a fund manager, and passive investments, which are linked to a stock index.
As of Oct. 1, the firm's price cuts were expected to save current investors more than $4 million annually, Fidelity said.
“Saving for education costs is one of the largest financial challenges many families face," said Eric Kaplan, who works with college savings plans at Fidelity. The blend portfolios let parents take advantage of so-called passive funds, which generally have far lower fees than those managed by staff.
Fidelity has been privately held for more than 70 years and has $7.8 trillion in total client assets. It manages money for more than 30 million people.