In a move five years in the making, Fidelity is combining its RIA custodian and broker-dealer clearing units, it announced in March. It has also created a new technology operation, Fidelity Wealth Technologies, that will include the recently acquired eMoney Advisor.
The changes, the company said in a statement, reflect the “growing, emerging and converging business models in the financial advice industry.”
Sanjiv Mirchandani, who has headed Fidelity’s National Financial clearing operation since 2009, will become president of the newly formed Fidelity Clearing and Custody. Mike Durbin, who in the same year joined Fidelity Institutional Wealth Services (IWS), the second largest RIA custodian, will become president of the new Fidelity Wealth Technologies group. That group will include eMoney Advisor, the financial planning and data aggregation software firm whose acquisition was announced by Fidelity in early February. Once that acquisition closes, eMoney’s founder and CEO, Edmund Walters, will report to Durbin, according to a Fidelity statement, and “maintain his role leading eMoneyAdvisor.”
In an interview, Mirchandani said, “What we’re trying to offer is the best of both worlds for our clients,” and emphasized that clearing and custody clients—and the other customers in the former National Financial and Fidelity IWS—will continue to work with the same service teams they have been using. “Bob Oros will continue to run the RIA” sales and relationship operations as executive vice president, Mirchandani said, while “Joe Kelly will continue to run the broker-dealer” side as senior vice president and head of relationship management for independent BDs.
As for Fidelity Wealth Technologies, the company said the intent is to “drive and deliver digital solutions across the Fidelity enterprise and throughout the financial advice industry” and “help to speed innovation on behalf of” Fidelity’s advisor “clearing and custody clients.”
Referring to the realignment in an interview with Mirchandani, Durbin said Fidelity is “uniquely positioned to do this because of the size and scale of our business; our competitors couldn’t pull this off even if they wanted to.”
At the time of the eMoney announcement, Fidelity said it showed its commitment to a “significant, multiyear investment in a next generation technology platform, which will offer comprehensive data management, efficient and integrated workflow capabilities, and collaborative tools for investors, advisors and home offices.”
The applications that come out of that platform will be “not just for advisors,” Durbin said, but rather to “source and deploy the technologies for all the financial services channels.” He stressed that under the Fidelity Wealth Technologies umbrella, “eMoney will be an independent company run by Ed Walters,” pointing out that 70% to 75% of eMoney’s current users “are not Fidelity customers.”
In fact, Durbin said, “We want to continue to grow” eMoney to “source and deploy and make a return […] across all the channels.” In addition, he said eMoney “can help the Clearing and Custody” customers of Fidelity, along with other “Fidelity branded channels, licensing and integrating eMoney like any other” technology application.