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$12B Firm to RIAs: Sell Us Your Second Best

Industry heavyweight Marty Bicknell is willing to pay you for the clients you'd otherwise dismiss -- and it's a deal that Fidelity's custodial unit recommends you take.

In a new effort being backed by the new Fidelity Clearing and Custody unit, Bicknell's FirstPoint Financial -- a subsidiary of Mariner Holdings that specializes in mass affluent clients -- is offering RIAs an annual referral fee of 35 basis points on assets of clients who don't fit a firm's target profile.

The FirstPoint offering is aimed at RIAs who have a high-net-worth target client profile and asset level minimums, who may want to "outsource the client experience" of emerging affluent investors, says David Canter, executive vice president, practice management and consulting, Fidelity Clearing and Custody.

Fidelity Clearing and Custody will not be compensated in the arrangement, Canter says.

After launching FirstPoint two and a half years ago to serve a mass affluent clientele with investable assets under $250,000 -- a group he says had been previously overlooked -- Mariner CEO Bicknell says Mariner heard from a number of RIAs who "had not been able to scale and serve that market segment properly."


As a result, Mariner decided an outsourcing service would meet "a critical need" for both RIAs and investors, says Bicknell, who is also chief executive of Mariner Wealth Advisors, one of the nation's largest RIAs, with over $12 billion in assets under management.

FirstPoint will initially consult with interested advisors and review their current client segmentation approach for no charge.

If the RIA agrees to work with FirstPoint, it will sign a solicitation arrangement to refer clients that may not fit the firm’s current target market or meet its current account minimum. The firm also has to disclose its referral fee from FirstPoint on its ADV form and have clients sign a document noting that they are aware of the fee.

FirstPoint will become the advisor of record and take on fiduciary responsibility, Bicknell says, and clients referred to FirstPoint will work with an advisor for financial planning.

"It's not a call center," he says.

Clients will also be offered a variety of investing and technology options, including using robo advisor Betterment, eMoney and Orion reporting software. (Bicknell's jointly owned company with Steve Lockshin, B+ Institutional Services, distributes Betterment's Institutional service to RIAs; eMoney was recently purchased by Fidelity.)


In explaining the opportunity for advisors, Canter points out that most RIAs aren't really interested in clients with smaller accounts -- nor are they able to serve them profitably.

Fidelity’s most recent Millionaire Outlook study showed that that 76% of financial advisors continue to focus their current client acquisition strategy on investors 49 years of age or older, or those with $1 million or more in investable assets, Canter says -- despite the fact that emerging affluent investors between 21 and 49 with investable assets of $50,000 to $250,000 are "well positioned" to become millionaires.

In addition, the study found that nearly half of financial advisors have no plans to target emerging and mass affluent investors over the next five years.

“We’re seeing an interesting dichotomy among firms: some are finding success by expanding their client base to include emerging affluent investors, while others are staying focused on the traditional high-net-worth target client profile,” Canter notes.

“The [FirstPoint] offering may help address the client segmentation needs of many RIAs who want to stick to their knitting and focus on their core clients, while still providing an advice option to those emerging and mass affluent investors who are seeking it out.”

Fidelity's goal in working with FirstPoint is to help advisory firms "consider how their businesses may evolve" and develop a strategy to address emerging and mass affluent prospects, Canter says.

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