From the January 2009 issue of Investment Advisor • Subscribe!

January 1, 2009

Schwab Reorganizes; Fidelity Hires; Pershing Provides

The three major custodians of RIA assets announced big executive changes and a new practice management program in just over a month.

First, the largest RIA custodian, Schwab Institutional, announced a major reorganization November 17, creating a new business unit called Institutional Services that will combine its RIA, TPA, and corporate benefits plan sponsor units under the leadership of executive VP Jim McCool. McCool, who had headed Schwab's Corporate and Retirement Services, replaces Charles Goldman, who as executive VP had headed Schwab Institutional since May 2007. McCool joined Schwab in 1995 when it acquired The Hampton Company, the retirement plan services company founded by Schwab CEO Walt Bettinger.

Alison Wertheim, Schwab VP of corporate public relations, said the realignment "doesn't change our strategy or our commitment" to RIAs, and stressed that this is "not a cost-cutting move." In the release announcing the change, Bettinger said that the new unit will "bring together all of our `business to business' services and enable us to leverage strong expertise we have in both groups."

Then Fidelity, the number two custodian, announced November 21 that it had hired the aforementioned Mr. Goldman to serve as president of Institutional Platforms for Fidelity Institutional Products Group. In that newly created position, he will report to Michael Clark, president of the Products Group, and "will oversee the major platforms" serving advisors at Fidelity, according to Fidelity spokesman Steve Austin. Those platforms include the RIA custody group, Fidelity Institutional Wealth Services; the correspondent broker/dealer clearing unit, National Financial; and Fidelity Family Office Services. Clark said that Goldman is "a man of strong principles who will fit in well with our culture. He's also got an extraordinary reputation for knowing the needs of clients; we think we have great understanding, but Charles will only make us stronger, and also for ensuring that customer service to clients is unparalleled, and we think we can learn from him there, too." Goldman will also be responsible for HybridOne, the Fidelity technology platform being rolled out that serves both fee- and commission-based advisors.

The leader of National Financial, Norm Malo, and the newly named head of Fidelity Institutional Wealth Services, Michael Durbin, will both report to Goldman. Goldman reports to Clark, who in turn reports to Fidelity President Rodger Lawson.

Meanwhile in Jersey City...

Then in early December, Pershing announced Advisor in Transition, a practice management program built expressly for the much-desired wirehouse breakaway brokers to ease their entry into either the RIA or the fee- and commission-based business model. Through the www.advisorintransition.com portal, the program includes the online Business Model Evaluator, built with Moss Adams, access to industry specialists on compliance, financing, and other issues, and an interactive modeling tool.--James J. Green

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