Fidelity Investments helped some 95 individual brokers and teams, with nearly $7 billion in assets under management, transition to independence in the first half of 2010, the firm announced Wednesday, July 28. Thirteen teams each had $250 million or more in assets, according to Fidelity in a statement.
Fidelity said that for the first half, average assets for breakaway teams that established their own RIA firms on Fidelity’s platform increased by 65%, compared with the same period in 2009. The breakaway brokers, a majority of which conduct both commission- and fee-based business, either worked with Fidelity to start their own RIA firm, joined an existing RIA firm on the platform offered by Fidelity Institutional Wealth Services or joined a broker/dealer client of National Financial, Fidelity’s correspondent clearing business.
In a telephone interview, Scott Dell’Orfano, the head of sales and relationship management at Fidelity Institutional Wealth Services, said he expected the breakaway trend, which had been going on for a couple of years, to continue and accelerate. There are two reasons for this, he said. One, there is more uncertainty in the broker community about what is going to happen in the sector. Two, as more and more brokers go off on their own, they serve as a valuable source of information and know-how for those contemplating a move. “They can talk about life after the transition,” he said.
Dell’Orfano noted that as the breakaway phenomenon continued, larger teams were moving toward independence. Two to three years ago, he said, it was predominantly individual brokers who went independent; now four- and five-person teams were picking up and moving out on their own.
According to Fidelity’s statement, Fidelity and National Financial have designed programs to help brokers understand and evaluate all of their options. These include a recently launched broker matching tool that can help brokers identify an existing independent broker-dealer or RIA firm by providing them with a targeted list of Fidelity RIA or National Financial broker/dealer client firms that may fit their distinct needs.
In addition, Fidelity has introduced the Advisor Guidebook, which provides brokers with resources to help them address several critical steps when transitioning to independence. These include:
? Considering Independence: Access to insights and best practices on going independent through Fidelity’s white paper, “Options for Independence.”
? Setting up the Business: A variety of checklists and considerations for brokers to keep in mind, such as preparing Form ADV.
? Planning for Transition: A tool to help brokers complete a full analysis of their book of business to ensure they have an accurate understanding of account details and any specific client needs.
? Transitioning: A personalized transition plan, including specific deadlines and status updates for the completion of account paperwork and the implementation of Fidelity WealthCentral.
? Client Communications: Sample letters and brochures to assist brokers while transitioning clients to their new firm.
? Technology: A user’s manual and self-guided online training checklist to help maximize effectiveness of the WealthCentral platform.
Fidelity Investments is a global provider of financial services, with assets under administration of over $3.1 trillion, including managed assets of $1.4 trillion, as of June 30.
Read a story about Fidelity’s RIA referral program from the archives of InvestmentAdvisor.com.
Michael S. Fischer ([email protected]) is a New York-based financial writer and editor and a frequent contributor to WealthManagerWeb.com.