Custodians continue to strengthen their digital presence and partnerships.

Fidelity Institutional is teaming up with digital pioneer LearnVest, fast on the heels of its recent groundbreaking collaboration with online powerhouse Betterment.

Clients of advisors who custody with Fidelity will have free online access to LearnVest's educational "financial wellness" content and receive preferred pricing to the company's digital financial planning program.

Fidelity will pay LearnVest a negotiated flat fee for free access to the educational content as part of the "alliance partnership" between the two companies, according to Michael Durbin, president, Fidelity Institutional Wealth Services.

LearnVest will not receive payment for offering preferred pricing to the financial planning program, but will presumably benefit from an increase in volume.

It's a win for both sides, says Durbin: LearnVest wants to work with intermediaries to reach "more end households," while Fidelity is looking for "a spectrum of digital providers" who can help advisors looking to move more of their business online.


To date, each of the major custodians has carved out a different digital strategy.

In October, Charles Schwab announced a highly anticipated online advisory platform with no advisory or asset management fees, commissions or account fees. Branded Schwab Intelligent Portfolios and targeted for retail clients, the new  service is set to debut early next year, with a white-label version  for RIAs due  to  roll out later  in 2015.

TD Ameritrade Institutional has opted for partnership agreements with a number of digital firms, including Trizic, Upside Financial, NestEgg Wealth and Jemstep. Each companies' online software is integrated with TDAI's Veo open access technology platform, and advisors can choose which one - or ones - they want to use.

Fidelity "had to move quickly" to keep pace with Schwab, says Sophie Schmitt, a senior analyst for Boston-based Aite Group's wealth management practice.

According to Durbin, Fidelity is "waiting like the rest of the industry to see precisely what [Schwab] will be offering."

Betterment and LearnVest should be able to help Fidelity's RIAs "develop their digital capabilities quickly," Schmitt says. "Advisors can easily deploy LearnVest's financial planning advice and tools and Betterment's investment management [offerings] through a digital delivery platform that does not require advisors to spend much time with the clients who are using these tools."


Indeed, according to a new Fidelity study, "Digging into Digital Advice," 55% of advisors plan to target emerging and mass affluent investors who are comfortable transacting online in the next five years. That's a big shift, according to the study, since seven in 10 firms report that investors over the age of 49 or with more than $1 million in assets drive their current strategy.

And an Aite  Group survey this summer found that over 40% of advisors indicated that acquiring young clients is “very important” to the long-term sustainability of their practice.

Durbin says he expects more digital firms to strike intermediary deals and partnerships with established RIAs and custodians to reach younger and mass affluent consumers. But he doesn't think "robo advisors" opting to market directly to retail customers will be left out in the cold.

"The long-term demographic trends for this business are still very positive," he says. "[Online advice] is bringing more people into financial advice. We're not in a zero-sum world, and the pie will continue to grow."

Read more:

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access