Fidelity Brokerage Services is not taking the loss of its biggest broker-dealer client, Commonwealth Financial Network and its 2,900 financial advisors, lying down.
According to senior industry executives outside Fidelity, the giant discount broker-dealer and registered investment advisor custodian is working with RIA clients who already use Fidelity as a custodian as leverage to recruit Commonwealth Financial Network reps, who were informed nearly two weeks ago that their firm was being sold to LPL Investment Holdings Inc. for $2.7 billion in cash.
With $385 billion in assets, Commonwealth was Fidelity’s biggest client for clearing and custody services. In any brokerage transaction, it’s a fight for assets. It’s more profitable for the buyer, in this case, LPL Financial, to transfer those assets to its internal clearing and custody platform.
The goal is for the RIAs to keep the Commonwealth advisors on Fidelity’s custodian platform, said those executives, who spoke privately to InvestmentNews about the matter. The pitch is simple: why leave if Fidelity is already working for you?
“Fidelity is trying to recruit these advisors,” said one executive, “and the message is, you don’t have to go over to the LPL side. The other option is to stick to Fidelity.”
The executives said that one RIA focused on Commonwealth’s financial advisors is Concurrent Investment Advisors, with $9.9 billion in client assets. Launched in 2017, Concurrent’s co-founder and CEO is Nate Lenz, a former Raymond James Financial Inc. executive.
“We definitely are making a strategic push to go after Commonwealth advisors,” Lenz said in an interview Monday. “But Fidelity has not proactively pushed opportunities in our direction.”
“The Commonwealth advisors are independent, and I think a number of them want to remain on Fidelity,” Lenz said. “And Fidelity is supportive of that independence.”
He added that Concurrent Investment Advisors has not received any formal commitments from Commonwealth advisors – the deal was announced just two weeks ago – but some could be forthcoming in the near future.
It’s typical for large broker-dealers to attempt to skim off financial advisors in the middle of a transaction; in the case of LPL buying Commonwealth, many industry observers have commented that the advisors, who now work at a boutique known for technology and service, may want to look elsewhere before settling in at a behemoth like LPL.
“As the only industry leader in both custody and clearing services, Fidelity is well positioned to help advisors of any size navigate the wide range of options for best serving their clients, whether through a broker-dealer, RIA or hybrid firm,” a Fidelity spokesperson wrote in an email.
Last week, InvestmentNews reported that large broker-dealer competitors with LPL Financial, including Raymond James Financial Inc., Kestra Financial Inc. and Cetera Financial Group, were also seeking to recruit Commonwealth Financial advisors.
Nine-month electronic trading freeze and share lending program at the center of dismissed claim.
Meanwhile, Rossby Financial's leadership buildout rolls on with a new COO appointment as Balefire Wealth welcomes a distinguished retirement specialist to its national network.
With a smaller group of companies driving stock market performance, advisors must work more intentionally to manage concentration risks within client portfolios.
Professional athletes are often targets of scam artists and are particularly vulnerable to fraud.
The brokerage giant tells Wall Street it will use artificial intelligence to reach clients it has never been able to serve — and turn the technology's perceived threat into a competitive edge.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
