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Fidelity Rolls Out Program to Help Breakaway Brokers

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Fidelity Investments has introduced Options for Independence, a comprehensive program designed to help breakaway brokers understand the evolving range of options available to them when going independent, the firm announced Wednesday. Fidelity, a custodian and clearing firm, has helped more than 500 broker teams transition to independence during the past three years, according to the company.

Fidelity’s new program consists of an enhanced client service model to strengthen and streamline the support of independent firms that conduct commission- and fee-based business at Fidelity, and it is supported by new educational resources.

As brokers evaluate their options for independence, they need to decide whether they will support both commission and fee investment services. For both new and existing clients who conduct a mix of fee and commission business across Fidelity’s RIA custody and National Financial broker-dealer clearing businesses, the firm has introduced an enhanced client service model. This features a dedicated client experience leader who will work with professionals across Fidelity to help address each client’s distinct end-to-end service and processing needs.

“We recognize the growing number of ways an advisor can affiliate with a firm, whether it’s joining an existing RIA, starting their own RIA, starting a broker/dealer and so many others,” says Mike Durbin, president of Fidelity’s RIA unit. “When an advisor comes to us, we perform an in-depth, comprehensive study of their firm and make recommendations as to the affiliation model that will work best.”

If the advisor has pre-conceived ideas of the business model he’d like to create, one that doesn’t fit with the study’s results, Fidelity has no problem telling him so, Durbin says.

“We let him know there are better options available,” he adds. “It is a lead generation tool for us, but we’re unbiased, since we are large enough to provide any of the options the advisor eventually settles on."

To complement the experience and support of Fidelity professionals, the new Options for Independence program also offers brokers access to a set of educational resources designed to help them understand the intricacies of each model:

  • Options for Independence: The Evolving Landscape: Provides brokers in-depth analyses of the different independent models as well as the business and economic considerations, such as being a business owner versus an employee. This white paper also identifies best practices to consider when making the transition, including the importance of retaining legal support and identifying a custodian.
  • Business Model Consultation: Offers high-level overview of different independent models, as well as questions that brokers should ask themselves when considering independence. It also provides an overview of how Fidelity works consultatively with breakaway brokers to help understand the range of factors that may affect their ultimate decision.
  • Considerations Before Joining a Firm: Identifies eight different factors for brokers to consider before joining an established RIA or independent broker-dealer, such as assessing the cultural fit and gauging the deal structure.
  • Considerations Before Becoming an RIA: Identifies 12 different factors for brokers to consider before starting an RIA, such as understanding the financial implications of establishing a firm and building a brand.

Fidelity Investments is a financial services provider, with assets under administration of over $3.3 trillion, including managed assets of over $1.5 trillion, as of Oct. 31.