millennials

New Partnership Brings Client Segmentation to Fidelity RIAs

Fidelity Clearing and Custody announced a new partnership Wednesday with FirstPoint Financial, a subsidiary of Mariner Holdings that specializes in wealth management for emerging affluent investors, to help registered investment advisors profitably serve younger and less wealthy clients. 

“We’re seeing an interesting dichotomy among firms: Some are finding success by expanding their client base to include emerging affluent investors, while others are staying focused on the traditional high-net-worth target client profile,” said David Canter, the executive vice president of practice management and consulting at Fidelity Clearing and Custody. 

“We chose to offer this program because we’ve heard from RIAs that they haven’t been able to figure out how to scale and serve this segment profitably.”

In it’s recent Millionaire Outlook study, Fidelity defined “emerging affluent” as investors between the ages of 21 and 49 with $50,000 to $250,000 of investable assets and who are well positioned to become millionaires. But for 76 percent of advisors, this group still doesn’t meet account minimums or fit into client acquisition strategies. 

FirstPoint starts by reviewing an advisor’s book of business and segmenting clients into buckets, usually by asset levels, to create strategies and appropriate service levels for each group. If an advisor decides that a client isn’t a good fit for their firm, they can refer the account to FirstPoint and share in the revenue. Advisors custodied with Fidelity receive 35 basis points, 10 more than advisors with other custodians. 

“We’ve seen in our benchmarking data that the large majority of high-performing firms have a target client profile, primarily drive by investable assets, and that they rarely stray from that profile,” Canter said. 

FirstPoint said it has a team of advisors dedicated to serving the emerging affluent. The firm uses technology platforms like eMoney and Betterment for front-end platforms and programs like Saleforce and Orion for its back-end functions.

The idea is to allow advisors to focus on clients with the most impact while making connections with the younger generation of high-net-worth investors. 

 
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