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Fidelity Targets RIAs with UHNW Clients

Fidelity Targets RIAs with UHNW Clients

In an effort to attract more financial advisors who have--or would like to have--ultra-high net worth clients, Fidelity Investments is offering them the same high-end services it offers to family offices.

In an effort to attract more financial advisors who have--or would like to have--ultra-high-net-worth clients, Fidelity Investments is offering them the same high-end services it offers to family offices.

RIAs who have clients with $50 million or more in assets will now be able to tap into a dedicated relationship management team, an investment analyst and trading team and an open-architecture reporting system that is part of Fidelity Family Office’s integrated portfolio reporting and trading platform. Previously these services were only available through Fidelity Family Office Services, which supports single family offices and has over $20 billion in custodial accounts.

On top of Fidelity’s usual custody and brokerage services, qualifying RIAs will also have access to research and educational materials on topics like risk and family education and governance as well as access to a peer network program where they can meet and share best practices with other family offices.

“It’s nice to be able to leverage services from the Family Office Services group to better serve advisors with ultra-high net worth clients or proposed new clients,” said Scott Dell’Orfano, executive vice president and head of sales and relationship management at Fidelity Institutional Wealth Services.

Fidelity is betting that by opening up Family Office services to high-end RIAs it will attract more business by giving advisors a “competitive solution,” Dell’Orfano said, to either attract ultra-high-net-worth clients or consolidate the assets of the super-wealthy clients they already have. The firm will make money on the new services through transaction pricing, just as it does on its standard platform for RIAs, Dell’Orfano said.

Fidelity’s primary competition for the new services, he said, will come from large private banks and industry powerhouses like Goldman Sachs, BNY Mellon and State St. Charles Schwab, Fidelity’s principal competitor, did not respond to requests for comments on its services for ultra-high-net-worth clients.

In a statement, Fidelity said its Family Office Services division is already working with three RIA client firms and talking with another 50 firms that have expressed interest in the offering.

One of the client firms, San Francisco-based Presidio Wealth Management, has used the offering since the summer and “early feedback has been strong,” according to managing director Brodie Cobb.

“There are a lot of services these clients need that we would otherwise be outsourcing,” Cobb said. ‘This brings everything under one roof and Fidelity has dedicated a lot of smart people to it. I think there’s a market out there for this and that it will be a big business for them.”

The Fidelity offering is yet another example of “the very intense battle we’re seeing for advisors’ business on three fronts: technology, products and pricing,” said Sean Cunniff, research director, brokerage and wealth management for the Tower group of Needham, Mass.

While Fidelity’s doesn’t yet “have a brand or heritage” in the ultra-high net worth market, the company has “done a nice job of establishing themselves as a presence in the family office space,” Cunniff said. “If all this does is prevent an advisor from moving assets somewhere else, it’s a win,” he added.

One potential RIA client had a wait-and-see reaction to the offering.

“A lot of RIAs like us provide multi-family office services but outsource most of them,” said Barry Glassman, president of Glassman Wealth Services of McLean, Va., which has about $375 million in assets under management. “It will be important to understand what the value-added of the offering is for the $50 million client.”

“It sounds like a great idea,” Glassman continued, “but time will tell if it really benefits the clients’ bottom line.”

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