Broker-Dealer and RIA Executives’ No. 1 Concern for the Industry Today: “Increasing Competition And The Need To Differentiate”

Fidelity Poll Finds the Need for Innovation Amid Significant Shifts in Investor Behavior, Evolving Technologies and Mounting Operational Pressures

BOSTON – A new Fidelity Investments® poll, taken at the company’s annual Executive Forum client event, finds that broker-dealer and registered investment advisor (RIA) firm executives (“executives”) believe the greatest concern for the industry today is “increasing competition and the need to differentiate.” Underlying this sentiment are a number of changes in investor behavior, shifting business pressures and evolving technologies that are challenging brokers and advisors to renew their focus on innovative services and strategies in order to remain relevant and position themselves for growth.

The greatest change on the investor landscape, according to two-thirds (64 percent) of the executives surveyed, is that investors are more risk averse. Possibly as a result of their lower risk tolerance, executives reported that the next most significant shift is that investors are more engaged in the investment process (12 percent). The need for greater transparency and a desire for increased communication through email, text and social media were tied as the third most significant changes in investor behavior (at 7 percent each).

While investor behavior has changed, executives’ business realities have also shifted. Compared to ten years ago, they are spending 73 percent more time and resources on risk and compliance. This is causing them to spend less time and resources on marketing/business development (19 percent less) and client service (10 percent less).

“We’ve consistently heard from our clients that mounting operational demands, the rapid pace of technology change and evolving investor dynamics make it difficult to focus on innovation,” said Michael Durbin, president of Fidelity Institutional Wealth Services®.

“This year’s Executive Forum was dedicated to giving our clients that critical ‘time to think’ -- to help them renew their focus on innovation and better plan their growth strategies,” said Durbin.
The executives polled are dedicating, on average, four hours per week to the topic of innovation, which is less than half the time they would like to devote to thinking about new ideas for their businesses.

A majority of executives (34 percent) believe that technology will be the primary force that drives industry innovation in the near term. This includes the use of mobile technology, cloud storage and services as well as social media. Click here to hear more from executives on what innovations will drive the financial advice business.

“The end-investor’s attitudes and needs have shifted dramatically in the past decade,” said Sanjiv Mirchandani, president, National Financial®. “To engage the next generation of investors, advisors should consider adopting technology broadly – not only to help transact business and service investors as efficiently as possible, but also to be more transparent, to better communicate and to allow investors to be more involved in the process.”

The 14th annual Executive Forum was held April 30 -May 2 in Scottsdale, AZ. The event was attended by more than 350 firm executives, most of whom are clients of Fidelity’s custody and clearing units, which administer more than $1 trillion in combined assets.

The event included industry experts and academic thought leaders who addressed how ongoing changes to the political and economic landscape will affect the financial advice industry in 2012 and beyond, including: Michael Lewis, journalist and best-selling author of Moneyball, The Blind Side and Boomerang; Fareed Zakaria, host of CNN’s Fareed Zakaria GPS and editor-at-large for TIME Magazine; The Institute for the Future’s Lyn Jeffery, Ph.D., cultural anthropologist and Bob Johansen, Ph.D., ten-year forecaster; and Sir Ken Robinson, Ph.D., author and international advisor on education in the arts.

About the Poll
The Fidelity 2012 Executive Forum Poll was conducted April 30 - May 2, 2012. One hundred-eighteen Fidelity clients attending Executive Forum completed hard copy questionnaires at the event. The results of this poll may not be representative of all financial advisors meeting the same criteria as those surveyed at the Fidelity 2012 Executive Forum.

About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $3.7 trillion, including managed assets of $1.6 trillion, as of April 30, 2012. 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

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

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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