Charles Goldman came on board in January to head up Fidelity Investments' three advisor platforms—Fidelity Family Office Services, Fidelity Institutional Wealth Services and National Financial Services. In his short tenure, the former head of Schwab Institutional's advisor business has already assigned himself a big-league project—the upgrade of Fidelity's service to RIAs.

Internal measures of quality at Fidelity Institutional Wealth Services score in the 85% to 90% range, as judged by its 3,500 clients. Service is good, the company says. But Goldman wants to surpass the high bar for service set by his former employer in San Francisco. "We want to go from good to great," he says.

Goldman's bid for greatness at Fidelity represents an ambitious—and potentially fruitful—assault on Schwab's industry leadership with RIAs, says Timothy Welsh, president of Nexus Strategy in Larkspur, Calif. A Citi Investment Research study about RIAs published in October found that 58% of them named service as the top criterion when choosing a custodian for their assets. In the same study, Schwab was rated best for service by 77% of the RIAs surveyed. Fidelity was rated tops in this category by 11% of RIAs.

Technology v. Teamwork

Adding to Goldman's task is the challenge of Fidelity's deep-seated business philosophy that technology comes before service in importance. "We [at Fidelity] believed that technology was the key differentiator. It's clear that having excellent service is the first thing that you have to get right," Goldman says. "[Excellent service] then allows you to compete on technology." Fidelity already showed RIAs its commitment to technology in December when it launched WealthCentral, an integrated software bundle and revamped web platform that cost the company $50 million to develop.

Fidelity's dedication to technology over service is palpable, according to some advisors who use both Fidelity and Schwab. "If my traders have a problem that crops up, Schwab takes the attitude: We're partners. Let's get the problem solved," says Richard Stone, CEO of Salient Wealth Management in San Rafael, Calif. "Fidelity says, 'This is what the rules are and this is where you may [have gone off track].' "

To make service more customized at Fidelity, Goldman plans to find ways to have RIAs form more personal relations with the Fidelity personnel who serve them. Although he says it is premature to discuss details, he will align his company's service teams with RIA practices more according to their size and geographical location. Fidelity already makes some use of service teams, but it will "make [the team to client relationships] deeper and spread them further into the client base," Goldman says. Bigger advisors can expect to be the first beneficiaries of service upgrades-starting in a couple of months, he adds.

Tough Competition

Fidelity is not likely to close the service gap with Schwab anytime soon, says Alison Wertheim, spokeswoman for the San Francisco-based archrival. "The challenge before them is immense," she says. "It takes years of effort and careful attention to get service right, and we're continuing to up our game every quarter." The average internal satisfaction score accorded client service representatives at Schwab was 93.4% as of Dec. 31, 2008, according to Schwab's quarterly survey of its RIA clients.

Part of Schwab's formula for customizing service is to assign a dedicated rep to most of its top 1,100 firms, Wertheim says. These 1,100 firms tend to have $100 million or more in assets under management, according to data from Nexus Strategy. Pershing Advisor Solutions assigns a dedicated rep to all of the 480 firms it serves, according to its spokesperson Michael Geller.

Although these Schwab advantages are very real, Goldman has the knowledge and experience to make a big dent in that lead, Welsh says. "He can do it. Service is not so much a culture as a process. If you incent the service reps appropriately, you can do lots of very powerful things" to alter their behavior.

Stone of Salient is less certain. "[Goldman's] very tenacious," he says. "The question is how much room is Fidelity going to give him."

Fidelity says they are committed to Goldman's effort. "We are giving Charles all the authority he needs to improve the quality of service delivered to RIAs," says Steve Austin, a spokesman for Fidelity.

Still, the pressure is on as Goldman steps into his newly created job as president of institutional platforms. The RIA business he oversees was headed by four different executives over the past four years. Jay Lanigan departed the position as head of Fidelity's custody unit in 2005, after holding it for 11 years. He was followed by William Carey, who left the job in October 2006. Jack Callahan held the job until Michael Durbin was named his successor in November. Goldman now oversees Durbin, Sanjiv Mirchandani, president of National Financial Services, Fidelity's clearing business and Ed Orazem, head of Fidelity family office services. Goldman is studying ways for these businesses to share their technology and services.