Jack Callahan started his career selling IBM hardware to corporate customers. Now he’s selling something more intangible, though no less essential, and to businesses of a different kind–investment advisors of various sizes who custody client assets at Fidelity Registered Investment Advisor Group (FRIAG). In the months since he was named president of FRIAG, Callahan has been on a listening tour, where he found Fidelity-affiliated RIAs to be (not surprisingly) entrepreneurial, but also (somewhat surprisingly, he says) aggressive in what they want. “They don’t want vendors, they want partners,” Callahan says. They want to grow, he says, but they also want to know “how do they make more money?”
There are about 3,500 advisors custodying some $240 billion in assets at FRIAG. Callahan says he’s particularly proud of the $2 billion that Fidelity has sent its advisors’ way through its referral program. But Callahan ticked off a number of initiatives in an April interview that are in varying stages of completion. One is a segmentation project, in which FRIAG is studying its advisors so that it could whittle down the segments it serves to four or five, noting “we won’t be all things to all people.” While that study isn’t finished yet, Callahan specifically mentioned favorably an “emerging advisor” segment–those with only $2 to $3 million in assets, but who account for many of the RIAs that FRIAG recently has added to its roster–and retirement plan third-party administrators, who account for about $20 billion, he says, of FRIAG’s assets. The goal of the segmentation initiative is to focus Fidelity’s resources on those advisors who fit best, offering a baseline of services and products at an attractive price. On the other end of the spectrum, Callahan noted that “we put together business plans for our largest advisors,” in order to assess their priorities. He’s also working on a study with his Fidelity colleague at National Financial, Norm Malo, on building a hybrid platform that could serve RIA firms and broker/dealers.
With a background in the retirement plans market, Callahan has a tip for those advisors who want to succeed in selling and servicing retirement plans–”Hook up with TPAs.”