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How Fidelity’s custodial business is transforming

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Carolyn Clancy, head of the BD segment, says its 200 client firms need more tools and capabilities in a new era of wealth management.

Compliance boot camps, quality report cards and new onboarding technology set to roll out early next year, these are just a few examples of how Fidelity Clearing & Custody Solutions says it is evolving with the industry.

Wealth management is at the “dawn of another transformation,” according to Carolyn Clancy, head of the custodian’s broker-dealer segment. New digital tools, heightened regulatory scrutiny and record consolidation have all sped the transformation, she adds. So has the shift to fees from commissions.

In a podcast with Financial Planning Senior Editor Tobias Salinger, Clancy explains that more than 50% of the custodian’s assets from its roughly 200 BD clients are now in fee-based accounts. She predicts the share of advisory assets could reach 60% or even 70% in the next two years.

The move away from commissions across wealth management has altered Fidelity’s mix of services for the custodian’s $2.3 trillion in client assets under administration. New and pending state fiduciary rules are also putting compliance under the spotlight.

Carolyn Clancy, Fidelity Clearing & Custody Solutions

Technology to help clients open new accounts is increasingly important since they now expect a headache-free process. Clancy argues Fidelity’s enhancements will shift “how we think about this whole onboarding journey.”

Ten years ago, the services provided to clients fell into core clearing capability, Clancy says, citing examples like trade execution and asset movements.
Now, the custodial giant’s services still include the clearing side but extend to tech integration and practice management. “We are helping them transform their business models, completely rethink their processes, really provide lots of thought leadership and, in many cases, just helping them completely focus on growth and the growth capabilities,” Clancy says.