Fido Poaches Schwab RIA Executive

Fidelity Investments was negotiating a contract with the former head of Schwab’s advisor business long before he was allegedly squeezed out due to corporate restructuring at the San Francisco company.

Fidelity Investments was negotiating a contract with the former head of Schwab’s advisor business long before he was allegedly squeezed out due to corporate restructuring at the San Francisco company.

The Boston-based investments giant hired Charles Goldman to make him head of its own advisor custody business in a “very opportunistic” spirit, said Michael Clark, president of Fidelity’s Institutional Products Group. “I had interview conversations with 100 people; Charles and I hit it off,” Clark added.

The sequence of these events casts doubt on previously published reports stating that Schwab CEO Walter Bettinger had personal issues with Mr. Goldman, and that he had replaced him with long-time colleague, James McCool, in that spirit. Mr. McCool became head of Schwab’s RIA custody business last week as part of the merger (see http://registeredrep.com/advisorland/career/schwab_reorg_1118/) of its corporate retirement services and the advisor custody businesses at the company.

In hiring Mr. Goldman, Clark said he was seeking his expertise in trying to raise the level of service at Fidelity. “When I hand out a customer survey, I want to get a 10 out of 10,” he said.

Indeed, most industry observers say that although Fidelity’s service is improving, Schwab still enjoys an advantage that largely defines its competitive edge. “Fidelity’s service isn’t bad; it’s uneven. Schwab just seems to have cracked the code” on service, said Ron Cordes, co-chairman of Pleasant Hill, Calif.-based Genworth Financial Wealth Management, which manages $15 billion.

Trying to replicate Schwab’s service by hiring away Schwab Institutional’s top executive could help “level the playing field,” said Timothy Welsh, principal with Nexus Strategy, a Larkspur, Calif.-based consulting firm for RIAs. “He can take the entire Schwab playbook and replicate it,” he said.

Clark disagreed with the “playbook” reference, and said that Fidelity hired Goldman more for his character and proven experience. “We don’t need Schwab’s playbook,” said Clark. “We think Fidelity has a great playbook.”

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish