More On Legal & Compliancefrom The Advisor's Professional Library
- Risk-Based Oversight of Investment Advisors Even if the SEC had a larger budget and more resources, it is doubtful that the Commission would have the resources to regularly examine all RIAs. Therefore, the SEC is likely to continue relying on risk-based oversight to fulfill its mission of protecting investors.
- Regulatory Oversight of Investment Advisors Although the regulatory environment is in a state of flux, it is imperative that RIAs adhere to their compliance obligations. To ensure compliance, RIAs and IARs must fully understand what those obligations are.
Speaking at the annual gathering of its top advisors in Naples, Florida, Fidelity Brokerage Company President Ellyn McColgan and Fidelity Registered Investment Advisor Group President Jack Callahan related the good news that Fidelity had its best first quarter ever in net new flows--$56 billion--bringing total assets under administration to $1.77 trillion. FRIAG's 3,300 advisors brought $20 billion of that inflow to Fidelity's coffers in the quarter alone (bringing total AUA at FRIAG to $260 billion), prompting McColgan to say that "the advisor channel is a critical part of our high-net-worth strategy going forward." To support that contention, Callahan showed new print and television ads that Fidelity is running that included a tag line to "contact Fidelity our your own advisor."
It's not just RIAs who work through FRIAG, since there are many retirement plan administrators and independent trust companies that also avail themselves of Fidelity's platform, so McColgan announced that "we have to change the name" of FRIAG to reflect those other constituencies. In a separate interview, Callahan, who has been on the job for six months, suggested that the name change will happen in the second half of this year.
During a Q&A session with McColgan moderated by Callahan, the company's latest referral program was brought up, with one advisor questioning the enthusiasm of Fidelity's local retail offices to make appropriate referrals. McColgan responded that "that's why they're pilot programs--to work out the kinks." She then went on to say in her direct way that "all of us are customers, competitors, and counterparts," and that "drawing bright lines between different parts of the business is impossible." In discussing the referral program in a meeting with the press later, McColgan stressed that even if it wanted to, Fidelity could never "handle the high-end needs" of wealthy clients, and said "we have to educate those reps" who for a long time have been assisting their retail clients, but asserted that when the referral process works well, "it's a symbiotic relationship."
McColgan was recently promoted to the position of president, distribution and operations, for Fideilty Investments, in addition to retaining the presidency of Fidelity Brokerage Company. In an interview, she mentioned that "the chairman [Ned Johnson] has been supportive of the advisor business for years. Sometimes you need the right chemistry; I'm very happy with the team we have now."