Fifth Third Securities (FTS) is a registered investment advisor (RIA) with the Securities and Exchange Commission (SEC) and a registered broker-dealer under the Financial Industry Regulatory Authority (FINRA). It sponsors managed account programs on behalf of a diverse group of clients, including high-net-worth individuals and private pension plans.
Fifth Third Securities Background
FTS began operations as a broker-dealer registered with FINRA back in 1939. It became an RIA in 2004. Today, it serves as a direct, wholly owned subsidiary of Fifth Third Bank.
What Types of Clients Does Fifth Third Securities Accept?
FTS offers its online managed account program OptiFi and its managed account wrap-fee Passageway programs to the following types of clients:
- High-net-worth individuals
- Charitable institutions
- Private pension plans
Fifth Third Securities Minimum Account Size
Minimum account sizes vary, depending on the type of program and subprogram. Here are the current parameters for subprograms under the Passageway Program:
- Advisor Directed Program - $50,000
- Brinker Capital Program - $50,000
- FEG Program - $50,000
- IMG Program - $50,000
- SMA Program - $100,000+ based on the specific Portfolio Manager(s) selected
- SIGMA MMA Program - $250,000+ based on the portfolio
- S&P Mutual Fund Program - $50,000
- Symmetry Program - $50,000
- S&P ETF Program - $50,000
- UMA Program - $150,000
- Russell Program - $50,000
- Vanguard Program - $50,000
- Wilshire Program - $50,000
The firm doesn’t publish its account minimum for the OptiFi program. But it notes that it’s available to clients with “sufficient liquid assets to participate.”
Services Offered by Fifth Third Securities
FTS sponsors two managed account programs.
For the Passageway Managed Account Program, an independent advisor representative (IAR) working through FTS would first meet with a prospective client and gather information about the client’s risk tolerance and investing goals. The advisor would then determine whether the program is right for the client (e.g., it’s not recommended for investors who want to frequently switch strategies in reaction to short-term trends). If yes, the IAR would recommend one or more of the subprograms, many of which use only mutual funds and exchange-traded funds.
FTS currently offers the following Passageway programs:
- Separately Managed Account Program
- Investment Management Group Portfolios Program (IMG Program)
- SIGMA Multi-Manager Account Program
- Symmetry Managed Multi Fund Portfolio Program
- S&P Mutual Fund Program
- S&P ETF Program
- UMA Program
- FEG Program
- Advisor Directed Program
- Vanguard Program
- Brinker Capital Program
The firm’s other offering is the OptiOn Managed Account Program, which is accessible only online. Based on an algorithmic analysis of your financial profile, FTS would recommend an asset allocation model managed by Geode Capital Management, LLC.
Fifth Third Securities Investment Philosophy
FTS engages in an array of investment strategies. The ones applied to your investments depend on the IAR you work with and the Passageway program you’re invested in. You can find more details about investment strategies on the investment policy statement (IPS) you sign with your advisor and applicable program manager brochures, which you can look up on the SEC’s website.
Fees Under Fifth Third Securities
FTS generally charges fees based on a percentage of your assets under management (AUM). These percentages depend on the size of your account and the program you’re enrolled in. According to its publicly available firm brochure these asset based fees currently span from 0.16% to 0.50%.
The OptiFi Program assesses an advisory fee of 0.50% of your account’s average daily asset balance, which covers the advisory services provided by FTS, Geode’s ongoing management of your account, certain trading costs, commissions and services (brokerage, clearing and custody) provided by NFS, the brokerage associated with this program.
What to Watch Out For
As a subsidiary to a very large parent company, FTS works with several affiliated financial services firms, which means fees for its services can come from several sources. In addition, the firm has disclosed some disciplinary events involving regulators. That said, the firm is bound by its fiduciary duty to work solely in the best interests of its clients.
In its most recent SEC filings, FTS reported 14 regulatory or disciplinary events that were resolved within the last 10 years. Many involved the broker-dealer side of the business. The most recent event was resolved on May 18, 2018. In this action, FINRA found that, among other things, FTS “made material misstatements and omissions about the cost of variable annuity exchanges in 77% of a sample set of 250 variable annuity exchanges randomly selected and reviewed by FINRA.” Without admitting or denying the findings, FTS paid a $4 million fine and $2 million in restitution to applicable clients who bought variable annuity exchanges between 2013 and 2015.
Opening an Account With Fifth Third Securities
To learn more about FTC’s services, visit its website at http://www.53.com/.
Where Is Fifth Third Securities Located?
With more than 1,100 branch locations across 10 states, FTC is headquartered at 38 Fountain Square Plaza, Cincinnati, Ohio 45263.
Tips for Finding the Right Financial Advisor
- Compare advisors. Before you agree to work with one, you should know key points such as how they earn their pay and whether they have any industry-recognized certifications that hold them up to high fiduciary standards. For more things to know, check out our five questions to ask when choosing a financial advisor.
- Use SmartAsset’s financial advisor matching tool. It connects you with up to three advisors, vetted by us, in your area. The tool also gives you access to their profiles, so you can review their qualifications before making your choice.
All information was accurate as of the writing of this article.