Fidelity Takes Control of Retail Funds

BOSTON — Discount brokerages will no longer be able to distribute Fidelity Investments’ most popular mutual funds, under a shift in marketing strategy set to take effect in January, Fidelity confirmed Friday.

The plan gives Fidelity more control over distribution of its so-called retail funds, which include its popular Magellan, Puritan, and Growth and Income funds. Fidelity is the nation’s largest mutual fund company.

While its Advisor group of funds will continue to be available through third-party distributors, the retail funds will be distributed directly to customers by Fidelity itself, with few exceptions.

Fidelity said it is making the shift to eliminate inequities among outside parties that sell its funds.

The present system allows small investors to buy retail funds through discount brokers such as Charles Schwab & Co. but not through full-service firms such as Merrill Lynch & Co. Those brokerages only could market the Advisor funds.

“We’re doing this to level the playing field, if you will,” said Perry Chlan, a spokesman for Boston-based Fidelity.

After Jan. 1, those investors already holding Fidelity retail funds through discount brokers will be able to continue adding shares. Bank trust departments and registered investment advisors will also have access to the funds after January, Chlan said.

He said Fidelity will provide more details of the plan next week.