Bill Carey, former president of Fidelity's institutional retirement business and a 12-year veteran of the firm, was selected in late June to head up its registered investment advisor group (FRIAG). Carey spoke with Registered Rep. senior editor Kristen French about his plans for the advisory unit and the challenges confronting advisors.
Registered Rep.: What attracted you most to this position at Fidelity?
Bill Carey: One of the first things I would say is the enthusiasm of Ellyn McColgan, president of Fidelity brokerage. With all of the resources they plan to commit to [FRIAG] — we plan to more than triple the level of investment next year in the business — it was a tough thing to say no to.
RR: Fidelity plans to displace Schwab as the No. 1 custodian to advisors. How will it make this happen?
BC: Today, Fidelity administers just over 20 percent of the assets in 401(k) plans in America. That will clearly be one of the greatest sources of opportunity for investment advisors — the flow of assets out of 401(k)s. Also, we are a leading investment manager, and have the capacity and resources to bring those tools to advisors. We also have a significant position in the brokerage industry from a direct retail perspective, and we have capital markets experience.
RR: What is the biggest challenge registered investment advisors will face in the next five years?
BC: Advisors want to be very focused on what they do best — providing advice to their customers. So managing their internal cost structure is a gigantic worry. You've seen some consolidation in the industry, more so in the last year, which suggests that making the cost structure work is a real challenge for some.