Fidelity has introduced an all-in-one technology stack as well as an advisory bundle for small and mid-sized registered investment advisors that custody with the firm, both available with special pricing.
The all-in-one tech stack includes components of Wealthscape, Fidelity’s custody platform, eMoney’s financial planning software, and Advyzon’s operational and portfolio management software and investment management tools. RIAs who use the tech stack will receive special pricing, with eMoney and Advyzon offering up to 10% and 20%, respectively, in potential savings, said Noni Robinson, head of emerging RIAs at Fidelity Institutional Wealth Management Services, a division of Fidelity Investments.
While many larger RIAs already have their own tech stack and tend to have more customized needs, Robinson said Fidelity wanted to provide the primary components needed to run an advisory business day to day to smaller firms.
“The goal of that bundle is really to reduce the time that advisors need to establish a tech stack that’s well-integrated,” she said. “One of the things I heard directly in conversations with both existing clients and prospective clients was, ‘It takes a lot of research and time to really determine what a well-integrated tech stack should be.’ That’s particularly challenging for small and mid-sized firms that don’t have the resources and costs associated with doing that.”
Fidelity defines small as firms with $250 million in client assets or less, while mid-sized firms are those with $250 million to $500 million. Robinson said that a little less than half of the RIAs who custody with Fidelity fit into this small category.
The advisory bundle includes Wealthscape, eMoney and FMAX Essentials, a new managed account platform. FMAX Essentials is a slimmed-down version of the Fidelity Managed Account Xchange (FMAX) platform and is available at a lower price point than FMAX. FMAX Essentials represents about 25% of the investment options available on FMAX, and those options include ETFs, mutual funds, separately managed accounts and unified managed accounts across both Fidelity and third-party products.
Robinson said the advisory bundle is designed for firms that often already have an existing tech stack, but they’re looking for more sophisticated managed account or investment management tools to grow their practices.
Fidelity has served RIAs of all sizes for many years, but Robinson was brought on about two years ago to develop a more focused strategy for small and mid-sized firms.
“Supporting small and mid-sized firms is not new,” she said. “What we have realized is that we have a great opportunity to help with common pain points for smaller firms that are resources and costs. When we think about the offerings that we’re bringing to the market, we’re helping them put together tech stacks that are very well integrated and can grow with them.”
There has been a lot of discussion in recent years about small RIA firms and the service they receive from the big custodians. When Charles Schwab announced it was acquiring TD Ameritrade in 2019, smaller RIAs expressed mixed feelings. TD Ameritrade was the go-to custodian for some advisors who were too small for Schwab. While some of those advisors welcomed the Schwab name being attached to their business, there were others who felt concerned that their customer experience would be downgraded (i.e., going without individual relationship managers). Schwab has since voiced its commitment to smaller advisors, and in December 2019, the custodian hired Tom Bradley, the former president of TD Ameritrade’s retail and institutional business, to focus on the segment of the business serving RIAs with $100 million or below.