Fidelity Investments is changing its policy on cash holdings so that more of clients’ uninvested funds wind up in a low-interest sweep account. Starting next year, Fidelity will put cash held in nonretirement brokerage accounts in its FCash product, which pays an interest rate less than half of some money-market accounts. The move applies to grandfathered accounts overseen by independent financial advisors that had previously been exempt from the cash-sweep policy Fidelity announced a year ago. Fidelity notes that advisors have other options for clients’ long-term cash, such as moving it into money-market funds.
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