It is extremely unfortunate that the recent Wall Street Journal article – "Advisers at Leading Discount Brokers Win Bonuses to Push Higher-Priced Products" – does not include important facts about Fidelity that were readily available. Our compensation structure fully complies with all regulations and is fully disclosed. It is designed first and foremost to ensure our clients are highly satisfied and any suggestion to the contrary is completely false. Following are additional facts:
- Less than 6% of the millions of clients in our entire retail customer base are invested in a managed account solution; and
- 88% of the financial compensation of our financial consultants is NOT tied to managed solutions.
We want to ensure clients receive the proper focus and attention based on the complexity of their needs and the time it takes to provide that more in depth guidance versus a one size fits all approach. We take great pride in providing our clients with exceptional service and tremendous value. We have extensive policies that are closely monitored and rigorously enforced to ensure the right client outcomes based on each client’s needs.
Our variable compensation program, which includes the achiever bonus, is based on three primary factors: 1) first and foremost is client satisfaction; 2) retention and growth of client assets; and 3) appropriately invested client solutions. The vast majority of our achiever bonus is simply unrelated to managed accounts solutions. Recognizing financial consultants who achieve high client satisfaction and who help clients invest and grow their assets with the right solutions is not under any definition a conflict of interest.