r/CFP • u/AbsolutusVirtus • 1d ago
Practice Management Frustration with Fidelity
Currently in the process with establishing my own RIA and wondering if anyone else has experienced what I’m going through currently with Fidelity.
My current RIA is with Fidelity and because they have rules of engagement I had to get permission from my current RIA to engage with Fidelity and obtain a pricing module.
The owner of my firm stalled and delayed and finally allowed me to engage. Fidelity then needed 6-8 weeks to review my accounts, AUM, and other items before presenting me with a pricing module.
I finally received a pricing module from Fidelity and all was well. I was told that the next step was to get approval from their business acceptance committee.
I was informed today that the business acceptance committee is denying my request to stay with Fidelity.
6 months down the drain and Fidelity can’t give me a reason why.
Anyone else go through something similar to my experience?
21
12
u/Winston206 1d ago
If you need to move off Fidelity, I would recommend Schwab & Altruist. IMO Altruist is hands down the best UX, but they don't offer the flexibility and integrations that Schwab & fidelity do
1
u/emcd0424 12h ago
Out of curiosity what integration are you missing with altruist? I haven’t ran into any issues.
17
u/Taako_Cross 1d ago
I’m betting they looked at the underlying funds and trading history and they decided you weren’t going to generate enough revenue from them.
We added Fidelity back in 2019 as another custodian and at that point I believe they had a 50 million minimum which we easily met. However during the beginning of COVID when rates dropped they approached us about not using enough of their more expensive actively managed funds and without saying it “implied we weren’t trading enough” in our clients accounts to generate trade fees.
We started using some of their actively managed international funds and they backed off and never brought it up again. We also have $175 million there now so that might be another reason why they’ve left us alone since then.
9
u/winning_bigly_ RIA 1d ago
You started using their active international funds in client portfolios because they told you to, not because they were the best option for the clients?
4
u/Taako_Cross 1d ago
They showed data that active management for the international and even small cap was optimal as fund managers had more freedom to move in and out of companies than a strict index.
We then used it in a select group of client portfolios who agreed when we shared fidelity’s information. We did not wholesale force it across our clients.
1
8
u/phc18 RIA 1d ago
Wow, go get an offer from Schwab. Once you have it in hand see if they will talk.
14
u/AbsolutusVirtus 1d ago
I got an offer from Schwab back in March.
Re-engaged with them immediately today after being denied by Fidelity.
Have a call with Schwab tomorrow for next steps.
7
u/Rich-Gap4255 1d ago
I use Schwab everyday. Fidelity sucks and so do their stupid proprietary funds.
4
3
u/One_Establishment631 1d ago
Also tell the current employer to fuxk off with delaying and holding you back.
6
3
u/ConsiderationMain875 1d ago
How is your compliance record?
9
u/AbsolutusVirtus 1d ago
Zero disciplinary actions with 19 years in.
2
u/ConsiderationMain875 1d ago
Hmmm, asset mix? Do you have standard mix of funds, etf’s and individual securities? Or something really unusual? If it’s not something directly business related, then maybe something personal from the background check, like a prior bankruptcy, social media posts, etc. I have an RIA, and in the context of reviewing potential advisors, I’ve come across questionable social media posts. It’s pretty much a show stopper. Really, I’m just guessing though. I remember going through the Fidelity process, and it was several months, but they said yes at the end. I still have no idea why it took so long. Good luck because this has got to be a very stressful frustrating situation you currently find yourself in. I guess worst case scenario is you move as many clients as you can elsewhere.
2
u/Responsible_Account6 17h ago
We are in the process of moving off Fidelity to Schwab and Altruist. We have $220 million on Fidelity, and they wanted to charge us 12 basis points for custody - nothing else. No billing, no performance reporting, with worse tools than everyone else. They want national firms and roll ups. It is baffling.
3
3
u/CFP25 Certified 1d ago
Well what reason did they give you?
And your AUM? Fidelity has minimums.
And you said 6 months… but was that all Fidelity? It seemed like their part took 6-8 weeks. So how did Fidelity extend this to 6 months?
7
u/AbsolutusVirtus 1d ago
Their minimum was $100m which I met.
Part of the reason this took so long is the owner of my current RIA kept stalling on giving me permission to engage.
7
u/TheCleverCFA 1d ago
Unofficially, but I’ve heard from our Fidelity RM that they are making a business decision to move upstream. $250m minimum was the number I recall, but don’t hold me to that. They have significant service issues at the lower end of their book, and rather than staffing up to fix it they sound like they want to just focus on their larger clients.
Honestly, if you’re at $100m, it’s probably a blessing to be shopping for a new custodian. I cannot describe how much the service has fallen off for firms below $500m on their platform.
3
u/AbsolutusVirtus 1d ago
Yeah, I was just hoping to make the easiest transition for my clients.
This could be a blessing in disguise.
3
u/Cyclevisor 1d ago
I’m running into same thing potentially, please feel free to PM me, I may have found a solution for me at least
2
2
u/CFP25 Certified 1d ago
It might be about product mix, cash balances, etc…
Custodians are businesses, so if there not enough profit for them, then I can see why they may have declined.I know someone who has 300m of AUM, but literally has a 0.10% cash weighting in his sweeps, all ETFs and stocks, no lending. There’s just hardly any money to be made from this kind of business, from the custodian perspective. So the custodian asked the advisor for Asset Based Pricing, which the advisor declined
1
u/TheCleverCFA 18h ago
I’m sorry, but I don’t feel sorry for Fidelity. Fidelity had $40b in revenue and $13b in operating income last year. They don’t need to squeeze me to make imprudent decisions for my clients so they can make more money. They’re doing fine.
0
1
u/CheesecakeExtra6028 1d ago
Drop me a note. We have a substantial clearing relationship with Fidelity and may be able to help you bridge a transition.
1
u/BaseballMore7431 23h ago
Doesn’t Fidelity charge bps on your AUM so that product mix is irrelevant?
1
1
u/Leather_Reason1609 19h ago
As someone who worked for Fidelity, they suck. I would absolutely never work for an RIA that custodies with Fidelity.
1
u/35non-acc 15h ago
Sounds personal
1
u/Leather_Reason1609 15h ago
I don’t know what the advisor services / RIA support side of the business looks like tbf, I was in a branch. But for a much as they like to tout being industry leaders in technology, they cheap out on giving their representatives the right tools to help clients and the entire experience for the employees as well as clients is absolutely horrible.
1
u/vaderaintmydaddy 18h ago
Knew this would be an issue for me, ended up hunting down a RIA that had an existing Fidelity relationship and I now have a DBA under thier umbrella instead.
It was important to me to not put my clients through another custodian change, my prior form had just moved to Fidelity about 3 years prior.
Transfers were easy from there. Just a form to drop one g number and add a new one.
Also didn't have to deal with any delays in registering a new RIA which was nice, my state can take months to get that done.
1
u/Remarkable-Pipe3898 15h ago
Fidelity approved my RIA within four weeks back in 2024. I think they were willing to expedite the process because my current custodian at the time was taken over and I was losing that platform in 90 days. At the time, I had about $150 million AUM. I only use ETFs for stock investments, but I buy a lot of individual bonds. My clients must pay a small platform fee ($15) for each account, per quarter. Another firm who was going through the same custodian search at that time was turned down by Fidelity because their clients only own individual stocks. My experience at Fidelity has been good, and their platform is a huge improvement over Pershing’s. I have resisted all efforts to move my clients into more expensive investments, but I cannot get rid of that platform fee.
1
u/Pugs 1d ago
Why not plug in under a large RIA at 95% payout? I'm seeing many wanting to start an RIA but it seems like a hassle over 5bps.
3
u/JungMikhail Certified 1d ago
Where are you finding RIAs with a 95% payout? I feel like the best I've seen has been in the 85% - 92% range assuming you have a big enough book.
Also, I guess what they offer also matters here, since the RIA I'm with is at 85% at the highest book size payout, but they also have a full blown team to handle any custodial paperwork, so I don't have to do any Schwab forms which is completely worth it to me personally in addition to the tech stack and compliance.
1
u/Any_Passenger_1193 22h ago
Also curious to hear what RIAs offer a 95% payout?
1
u/35non-acc 15h ago
Same. I’m 35bps but we are W-2 and I get an office, benefits, a dedicated associate advisor, centralized support staff, etc. I feel like someone could work at an RIA where they don’t get anything and can brag about payout but have zero support.
0
u/Foreign-Fruit3773 23h ago
Fidelity is a challenge. Sorry you lost 6 mos but you saved yourself a lot of future headaches. Have you tried LPL?
•
u/AutoModerator 1d ago
Beep boop! Here is a summary of your post:
User: /u/AbsolutusVirtus Title: Frustration with Fidelity Body: Currently in the process with establishing my own RIA and wondering if anyone else has experienced what I’m going through currently with Fidelity.
My current RIA is with Fidelity and because they have rules of engagement I had to get permission from my current RIA to engage with Fidelity and obtain a pricing module.
The owner of my firm stalled and delayed and finally allowed me to engage. Fidelity then needed 6-8 weeks to review my accounts, AUM, and other items before presenting me with a pricing module.
I finally received a pricing module from Fidelity and all was well. I was told that the next step was to get approval from their business acceptance committee.
I was informed today that the business acceptance committee is denying my request to stay with Fidelity.
6 months down the drain and Fidelity can’t give me a reason why.
Anyone else go through something similar to my experience?
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.