Fidelity Investments® Poll Finds Broker-Dealer And Ria Firms Shift Away From Cost Cutting To Focus On Adding Staff And Clients

Only One in 10 Firms Believe Minimizing Taxes is a Top Concern for Investors

BOSTON -- Fidelity Investments®, one of the largest providers of custody and clearing services to broker-dealers and registered investment advisors (RIA), today announced that only 2 percent of poll respondents at its 12th annual Executive Forum client event say that eliminating or cutting non-essential costs will be the biggest driver of profitability this year, compared to 27 percent in 2009.

Instead, the vast majority (86 percent) of respondents indicate they aim to accelerate firm growth and profitability this year through building new and existing client relationships as well as adding advisors and brokers.  This is in contrast to the nearly two-thirds (63 percent) who say these were their biggest drivers of profitability in 2009.

More than 375 client firms of National Financial®, Fidelity’s correspondent clearing business, and Fidelity Institutional Wealth Services®, a leading provider of trading, custody and brokerage services to RIAs, attended the two-day event on April 26 and 27, 2010.

“After 18 months of cutting costs, broker-dealers and RIAs have clearly shifted their attention to accelerating growth through acquisition,” said Michael R. Durbin, president, Fidelity Institutional Wealth Services.  “Not only are firms aggressively recruiting top producing brokers and advisors, but they are focused on actively wooing affluent investors away from the large wirehouse firms, while expanding relationships with existing clients."

Interestingly, while RIA and broker-dealer firms are focused on attracting new clients and expanding existing relationships, the Fidelity and National Financial poll found that 47 percent see client acquisition and retention as their biggest business concern in 2010.

Minimizing Taxes Not a Top Financial Concern for Investors
The Fidelity and National Financial poll found that only 11 percent of RIAs and broker-dealers surveyed feel their clients’ biggest financial concern today is to minimize taxes.  Instead, more than half (52 percent) believe that investors’ biggest concerns are outliving their retirement savings, followed by recovering losses from the 2008 and 2009 financial crisis (35 percent).

“Despite the market’s performance over the past year, it’s no surprise that advisors continue to focus their attention on helping to rebuild and refine their clients’ portfolios,” said Sanjiv Mirchandani, president, National Financial.  “However, we expect brokers and advisors to focus more attention on taxes in the second half of 2010 as they think more about their clients’ year-end planning needs and begin to anticipate the potential tax changes that likely will become an issue of discussion in the mid-term elections.”

Majority of RIAs and Broker-Dealers See Market Recovery Beyond 2012
Nearly two-thirds (64 percent) of RIAs and broker-dealers polled do not expect the S&P 500® to recover fully to its October 2007 high of 1,576 until after 2012, while the remaining 36 percent anticipate it happening before the end of 2012.

Finally, more than half (53 percent) of RIAs and broker-dealers surveyed believe that the national debt is the biggest issue facing the U.S. economy in 2010, while another 41 percent say the biggest challenge is unemployment.  The remaining six percent state that inflation and international competition are the biggest issues facing the U.S. economy.

About the Fidelity and National Financial Poll
The Fidelity and National Financial 2010 Executive Forum Poll took place April 26 - 27, 2010 in Naples, Florida and was conducted on hand-held Audience Response System devices provided by Turning Technologies. On average, 186 Executive Forum attendees responded to each question.  Fidelity and National Financial invited advisor and broker-dealer clients to the Executive Forum.  The results of this poll may not be representative of all advisors meeting the same criteria as those surveyed at the Executive Forum.

About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of more than $3.3 trillion, including managed assets of $1.5 trillion, as of March 31, 2010.  Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms.  For more information about Fidelity Investments, visit www.fidelity.com.

 


Turning Technologies is an independent company and is not affiliated with Fidelity Investments. 

Fidelity, Fidelity Investments, the Pyramid Design logo, Fidelity Institutional Wealth Services and National Financial are registered service marks of FMR LLC. 

Other registered marks appearing herein are the property of their respective owners. 

Clearing, custody or other brokerage services may be provided by National Financial Services LLC, 200 Seaport Boulevard, Boston, MA 02210 or Fidelity Brokerage Services LLC, 900 Salem Street, Smithfield, RI 02917, Members NYSE, SIPC.
 
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