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Fidelity, SunGard Unite on Platform: Create Strong Support for Trust Services

Fidelity Investments and SunGard Data Systems formed a multi-year partnership last week that unites Fidelity's brokerage services with SunGard's transaction processing capabilities, on a single platform. The deal gives each company a greater competitive edge to target intermediaries supporting Baby Boomers as they move from savers to spenders in their retirement.

Fidelity's Registered Investment Advisor Group will provide brokerage, custody and clearing services, and serve as the broker/dealer of record, for customers of SunGard Transaction Network (STN), a mutual fund order-routing solution. STN will continue to provide trade automation, systems integration and software solutions.

The partnership calls for joint marketing, and while it offers Fidelity access to SunGard clients, for SunGard, the deal gives the company the ability to bundle new brokerage services with its software systems to serve a quickly growing marketplace. Additionally, SunGard's approximately 600 financial intermediary customers, representing more than $100 billion in assets, will have access to Fidelity's entire brokerage platform, which means broader access to mutual funds as well as exchange-traded funds.

Neither company would disclose the terms of the deal, although both said they will make "significant" investments to its development and growth.

Besides its own 3,100 registered advisors, Fidelity serves 170 bank trust departments, and third-party administrators with assets over $50 billion.

The deal puts the two companies in a strong position to serve the 77 million Baby Boomers who will be moving from accumulation to distribution and putting their money into trusts over the next 25 years, operations experts noted. In fact, by 2010, the trust market could grow to $7 trillion, compared to $3 trillion today.

"Fidelity's financial planners will now have a greater array of services to offer clients," said Geoff Bobroff, president of Bobroff Consulting of East Greenwich, R.I. "If competitors to Fidelity do not have a relationship similar to this deal, they are probably looking into one."

William Carery, president of the division, said he believes that "the enhanced set of services offered by this single platform sets a new standard in the bank and retirement plan recordkeeping industry."

"The deal enables advice-giving intermediaries to target Baby Boomers and provides them with the best possible tool set so they can take advantage of this huge opportunity," said Jim Taylor senior vice president with the advisor group. "These folks [Baby Boomers] are very interested in making their money last and are concerned about passing along wealth transfer in a tax effective way.

"Our advice-giving intermediaries need to have a step up to meet the Baby Boomer needs," Taylor continued, "and our combined offering sets the standard in a full-service solution. We find this to be more operationally efficient, and it meets the growing demand and need for wealth management vehicles, in particular trusts, by this dashing wave of Boomers."

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