Fidelity custody unit reels in 100,000 new accounts despite coronavirus

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Following ‘historic call volumes’ during the coronavirus pandemic, Fidelity Institutional has brought in tens of thousands of new client accounts to its custody.

Fidelity Institutional, which offers custody for both broker-dealers and RIAs, opened more than 100,000 new accounts in the first three months of 2020 — a 25% increase over the year-ago period, according to the firm.

Other custodians have seen an uptick as well. TD Ameritrade Institutional said it experienced a 25% year-over-year spike in funded accounts in its RIA division during the first quarter of the year (the company doesn’t break down the specific number of accounts by channel).

Charles Schwab, which also doesn’t break out accounts by type, brought on 609,000 new brokerage accounts across both its retail and custody divisions. A Pershing spokeswoman declined to comment on the topic for this article.

Fidelity’s uptick in accounts come as advisors recruit new clients and field pandemic-specific inquiries.

More clients need advice right now — especially with regard to the CARES Act and the Paycheck Protection Program, says David Canter, head of Fidelity’s RIA division, who spoke with Financial Planning May 12.

“I always find that these times of crisis actually present opportunities for advisors,” he said.

Advisors also find themselves doing so from new digs, as much of the industry has moved to a work-from-home basis in order to mitigate the risks of the coronavirus.

“It's been really fascinating,” Canter said. “Almost all of them have been able to work remotely very quickly.”

Over half of advisors said their wealth management firm was more agile in adapting to new conditions than they originally anticipated, according to Arizent research on the effects of the pandemic across industries.

When will Fidelity, Schwab let RIAs trade fractional shares?
The demand is there but it isn’t easy to pull off, according to one custodian that’s already done it.

Some custodians, asset managers and tech vendors that service financial advisors experienced a spike in advisor calls and requests in recent months, as they work to support planners.

Fidelity said it was boosting its existing digital capabilities for advisors by adding a virtual assistant and enhanced search functionality to Wealthscape, the firm’s advisor technology platform.

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Clearinghouses/custodians Fidelity RIAs Client acquisition Coronavirus Client communications
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