Fidelity Investments is improving services for breakaway hybrid advisers who face bumps in setting up dual advisory and commission businesses, the fund giant announced today.
Company officials said the firm has lined up strategic relationships with several independent broker-dealers that have promised to coordinate with Fidelity Institutional Wealth Services, Fidelity's custody unit, to provide a more streamlined experience for new hybrid advisers.
The firm is promising to provide coordinated client communications and an integrated project timeline.
The independent B-Ds in the program haven't been disclosed, said Sanjiv Mirchandani, president of Fidelity's National Financial Services LLC clearing unit.
But Mr. Mirchandani said firms such as Commonwealth Financial Network, Triad Advisors Inc. and National Financial Partners Corp., all of whom clear through National Financial, “have integrated with our [hybrid] offering.”
Fidelity doesn't refer new hybrids exclusively to broker-dealers in the program, he added.
The coordination should help both advisers and their clients, said Maggie Serravalli, executive vice president of Fidelity Institutional, who is in charge of improving client experience in the firm's wholesale businesses.
For example, "there are regulatory requirements for a broker-dealer to manage the account opening process, which are very different on the adviser side," she said. "So we've worked with [the broker-dealers] to streamline the process [so it's] not so bifurcated."
The new service, which Fidelity is branding as "Options for Independence," also features a dedicated point person to work through issues on both the Institutional Wealth and National Financial sides, and more educational resources for breakaways, including "individual consultations with experts" about going independent, Mr. Mirchandani said.
In targeting hybrids, Fidelity is following an approach similar to Pershing Advisor Solutions LLC.
Pershing , like Fidelity, is leveraging the clearing resources of its sister clearing firm, Pershing LLC.
Pershing has its own hybrid service, called RIA Complete, which it bills as a single platform for advisors managing both commission and fee business.
Pershing executives says their NextX360 technology is ahead of Fidelity's in terms of integrating brokerage with advisory.
Other service offerings aren't critical "if they're not supported by a common technology platform," said Jim Roth, managing director at Pershing.
"We believe that we have the best service model for dually-registered advisors, offering two sophisticated platforms with the best services integrated through single sign-on," wrote Fidelity spokesman Steve Austin in an email.
Some fee-based tools from its RIA workstation, WealthCentral, were recently integrated into its clearing platform, Streetscape, he said.
"We plan to continue adding new technology and services used across both platforms," Mr. Austin said.
