From the February 2010 issue of Research Magazine • Subscribe!

Fidelity Says 25-30% Growth is 'Doable'

Fidelity's attraction to 185 brokers and teams in 2009 represents about a 30 percent increase in recruiting for its institutional wealth services group vs. 2008.

Fidelity says that it has helped "a record number of brokers" transition to independence in 2009.

At the end of November 2009, the number of such individuals and teams stood at 185. This includes brokers moving to any one of the common independent models --- starting an independent registered investment advisor (RIA) firm, joining an existing RIA practice or affiliating with an independent broker-dealer firm.

"Predominantly, we're seeing a steady flow of breakaway brokers from the wirehouse channel," says Scott Dell'Orfano, executive vice president, Fidelity Institutional Wealth Services. "A much smaller percentage is also coming out of the independent broker-dealer channel, which consists of advisors wanting to go fully independent via an RIA."

Fidelity's attraction to 185 brokers and teams in 2009 represents about a 30 percent increase in recruiting for its institutional wealth services group over its 2008 results.

Plus, the group believes this growth should continue in 2010.

The firm bases this outlook on "the sheer volume of inquiries we've received and the number of due-diligence meetings we've been having," according to Dell'Orfano.

Brokers who were hesitant to make the shift to independence during the turmoil of '08-'09 are eager to discuss this transition in 2010, he says.

There's also growing interest on the part of branch managers who are concerned that they may "potentially get dislodged through all the organizational changes going on today," Dell'Orfano explains. "They are coming to use to learn more about the independent space and about starting their own independent firm with their own client base, and they may even have a few associates that could join them."

The Fide.lity executive says the size of teams making the shift is now as high as 20 people, which may includes five partners and various professional and support staff members.

The institutional wealth services group has helped about 350 individuals and teams transition to independence over the past three years. The group includes 50 business development officers who handle recruiting, 35 implementation and training staff members for transitions and 47 relationship managers for practice management.

"We do think that there will be an even larger number of people willing to leave the wirehouses and other firms this year than in 2009," concludes Dell'Orfano. And given the fact that Fidelity (in concert with National Financial) can help transition advisors who want to keep doing commission-, transaction- and fee-based business, it feels it has a competitive advantage in the marketplace, he says.
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