Fidelity announced Monday that it has named David Canter to succeed Bob Oros as head of the RIA segment at Fidelity Clearing & Custody Solutions.
Canter joined Fidelity as COO of the RIA business in 2009, and has led the custodian’s practice management and consulting business for RIAs. Canter will be succeeded in that role by fellow Fidelity veteran Matt Chisholm, who has worked on both the broker-dealer clearing and RIA custody aisles for Fidelity for the past 11 years; he most recently was senior vice president of business analytics and consulting.
After five years of running Fidelity’s RIA business, Oros left Fidelity in January to become CEO of HD Vest, the CPA-heavy independent broker-dealer bought for $580 million last year by Blucora, the maker of TaxAct software.
Sanjiv Mirchandani, president of Fidelity Clearing & Custody, said of Canter that “his fresh vision will continue to help our clients and talented associates succeed and grow today and in the future.”
When asked in a telphone interview Monday what constituted RIAs’ biggest challenges, Canter listed the importance of human capital in advisory firms, which in a previous interview Canter said made a big difference in firm valuations (see RIA Buyers Getting More Selective: Fidelity M&A Report).
But then there’s the broader issue of how advisors “create more value” for clients, which in turn should inform RIAs’ pricing. “If revenue yield is going down” while growth of RIA firms is slowing (see Stagnant RIA Growth Demands Pricing Change), “how can you grow as profitably as possible?” he asked. How can advisors be more efficient in controlling their expenses while being “more scaled” in their service offerings?
The answer, Canter suggested, is that “advisors will have to professionalize,” a process that includes “not just your strategic vision and your target markets,” but more importantly how to leverage technology in a firm’s operations and in the delivery of client service and advice. “So scale and efficiency become ever more important,” he argued.
In his years of consulting with advisors, Canter says he’d tell them to focus on “three things. Full stop. How do you grow top-line revenue? How can you be most efficient so as not to grow your expenses?” And finally, “what’s your unfair advantage in the marketplace so clients” make the decision to “do business with you rather than another provider. I begin the meetings with those and come back to them.”
What, then, is Fidelity’s own ‘unfair advantage’ in a highly competitive custodian business?
First, Canter says, “we can offer our clients knowledgeable consulting” because of the sheer volume of consulting relationships Fidelity has had with RIA firms. Then there’s “the force multiplier event of continuing to transform all of our relationship managers into consultants.”
Canter should be able to jumpstart that transformation since he will now be in charge not just of sales for Fidelity’s custody operations but also relationship management. “With six and a half years leading practice management and consulting, I don’t run from that, I run toward that,” he said.
In addition to the consulting benefit for Fidelity RIA clients, Canter listed as advantages Fidelity’s investment in technology, particularly its WealthScape platform, and the “strength of the Fidelity brand and operating model; that’s what makes me happy to come to work at Fidelity every day.”