Fidelity clearing executive Norman Malo to retire

Norman Malo, who has served as president and chief executive of Fidelity Investments’ National Financial Services LLC clearing subsidiary since 2003, is leaving at the end of March, according to an internal memorandum.
Mr. Malo, who is 58 and has been with Boston-based NFS or a predecessor firm since 1997, was not available for comment, said a Fidelity spokesman who confirmed the executive’s plan to retire.
Charles Goldman, who joined the company this month from San-Francisco-based Charles Schwab & Co. Inc. to oversee Fidelity’s clearing and registered investment adviser businesses, will oversee National Financial’s daily operations until a replacement is found, the spokesman said.
Mr. Malo’s departure comes amid a broad management realignment and cost-cutting effort at Boston-based Fidelity and its parent FMR Corp., the mutual fund goliath.
The company is cutting 3,000 jobs, or 7% of its total work force, in addition to making several top management changes.
Late last year, Fidelity hired Mr. Goldman for a new position as president of institutional platforms, the company’s clearing and registered investment adviser businesses. At the same time, Fidelity shuffled John Callahan — the former head of the RIA, or institutional wealth services, unit — to its personal-and-workplace investing division.
Mr. Malo and Michael Durbin, who was hired this month from Morgan Stanley in New York to replace Mr. Callahan, both report to Mr. Goldman.
Mr. Malo began his long career in securities operations in 1968 at Robinson Humphrey Co. in Atlanta, and has long talked about retiring to his home in the South, said several clearing industry executives.
Before joining National Financial, he also had positions in New York at Lehman Brothers Holdings Inc., Shearson Lehman Brothers Holdings Inc. and Mutual of New York Securities Corp.
“He was a tough competitor,” said Mark Tibergien, chief executive of Pershing Advisor Solutions in Jersey City, N.J., and a longtime consultant to independent advisers and brokers.
“I hope he does well.”
The shifts indicate a strong effort by Mr. Goldman — who was in charge of RIA business at Schwab, the biggest custodian of assets for independent advisers — to position Fidelity to grab business from a wave of full-service firm brokers who are expected to go independent over the next year.
“Norman built a very strong management team, and we wish him the very best in the next chapter of his life,” said Steve Austin, a Fidelity spokesman.
Mr. Malo helped position National Financial as the second-largest clearing firm by number of broker-dealer clients, behind Bank of New York’s Pershing LLC.
It was the fourth largest when he took the top position, according to a 2007 interview with Mr. Malo.
The internal memo announcing his plans said NFS’s roster of broker-dealer clients more than doubled to 313 since he took charge of the business almost six years ago, while its client assets rose by 160% to $600.5 billion.
Clearing firms provide record keeping, client statement accounts and other essential services to smaller broker-dealers.
Their most profitable activities, however, derive from financing margin accounts and other credit-dependent trades for their clients and their customers.
In the recent market turmoil, however, margin account balances have plummeted as investors flee from securities trading, and lower interest rates also have been eroding clearing firm profits.
More importantly, the financial industry problems that have felled such major brokerage firms as Lehman Brothers, Merrill Lynch & Co Inc. and The Bear Stearns Cos. Inc., all of New York, is also winnowing the client lists of clearing firms.
Two of NFS’s biggest clients — the brokerage arms of JPMorgan Chase & Co. of New York and Bank of America Corp. of Charlotte, N.C.— are widely expected to internalize their clearing this year because JPMorgan now owns Bear Stearns, which has its own clearing firm, and Bank of America has purchased Merrill, which also clears its own trades.
Another NFS client, the brokerage unit of the former Washington Mutual Inc. of Seattle, is expected to clear through JPMorgan, which bought the failed savings bank last fall.
A Fidelity spokesman declined to comment on that matter.