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Fidelity Ups the Ante in Wealth Market


In an effort to capture a greater percentage of high-net-worth assets, Fidelity Investments announced that it will expand its wealth management products and services, adding 350 employees and nine investor centers, including the company's first appointment-only offices in New York and Chicago.

Fidelity's efforts reflect the demand in the high-net-worth market for a full-service firm that can offer products and services that can be tailored to individual clients' needs, according to industry observers.

An extensive branch network may also help Fidelity retain a greater percentage of the $200 to $300 billion in retirement assets it currently holds, said Geoff Bobroff, president of Bobroff Consulting, of East Greenwich, R.I. Asset managers are retaining approximately 20% of rollover retirement assets.

Funds often lose rollover assets to local registered investment advisors, but with a branch network, Fidelity can begin building those personal relationships with its client base, Bobroff said.

As of May, Fidelity's Private Wealth Management Group had $251 billion in assets, representing 50% of the company's total retail assets. With 80,000 clients, the group makes up just 5% of Fidelity's retail customer base. Overall, Fidelity has $369 billion in its wealth management products and services offered through its asset management and brokerage units.

Still, Fidelity is "behind the curve" compared to Merrill Lynch and Charles Schwab, Bobroff said. Although Fidelity offers a variety of wealth management products and services, it needs to pull those parts together into a comprehensive unit, he said.

While Fidelity's strategy is sound, whether it can successfully expand its wealth services depends on its ability to staff its investment centers with experienced, professionally licensed representatives, said Donald Dion, publisher of the Fidelity Independent Adviser.

The 350 new jobs will require people to have finance, law and accounting backgrounds, Dion said. Working with high-net-worth clients requires representatives that have years of experience, he said. "It's not something an entry-level person can do," he said.