Advisors often face a big dilemma—what to do about clients who have less than, say, $1 million in assets to manage. Though many advisors want to help that clientele, it becomes more difficult to service them, since such clients require the same attention as clients with bigger pies (yielding more in fees). That question has also raised ethical questions about who advisors are ultimately serving and what the mere “mass affluent” get.

“One thing we’ve learned from our practice management discussions is advisors have struggled to figure out how to serve the mass affluent, emerging affluent investors that may be below their minimum,” says David Canter, executive vice president of practice management and consulting at Fidelity Clearing and Custody. “But these investors want advice. It’s a bull market for advice.”

What’s more, goes the thinking, those mass affluent are going to build wealth and enter the higher echelons. Many advisors know that turning their backs on this segment isn’t the answer, and will be like ignoring money in the street.

To give an alternative to those advisors, Fidelity has partnered with FirstPoint Financial LLC, a subsidiary of Kansas advisory giant Mariner Holdings, to offer a consultative service to its RIAs, one that gets them to look at how they are segmenting smaller clients and developing strategies.

If they like, the advisors can also turn the service relationship over to FirstPoint, which will then share revenue with them on managed assets.

“If you’ve been addressing a certain set of investors as your core offering, you can’t just flip a switch from a business perspective and serve a different client segment without putting a lot of thought into it from a business plan perspective,” says Canter. “Even if technology can be the great enabler.”

Digital platforms have come into vogue as one possible solution to the conundrum of dealing with the smaller investor—even Fidelity, evincing an “If you can’t beat them join them” mentality, partnered with robo-advisor pioneer Betterment last fall,

But even technology can’t do everything, says Canter.

“Technology is just a platform. What we’ve seen advisors struggle with is how to blend in the technology platforms with these investors who may have lower investable assets. So how do you think about it from a branding perspective? How do you think about it as a level of services beyond the investments? How do you think about it from an operation work flow perspective?

“And what’s really interesting and market-changing about FirstPoint is that they said you don’t actually have to do all that work around creating a business plan; we can do that for you and provide a business solution for these clients and prospects.”

The process works this way: Fidelity tells RIA clients and prospects of its custody service about the FirstPoint program. As part of the practice management consultative process, if the advisors are interested, Fidelity will then introduce them to FirstPoint and then it’s up to the advisor to determine whether a relationship will form from that.

“After the initial consultation with the advisor, the advisor then decides whether or not to sign an agreement with FirstPoint,” says a Fidelity spokesperson. “If they do, the advisor then refers those clients to FirstPoint and they are FirstPoint's clients and the advisor receives a percentage of the revenue.

“Depending on the arrangement, if the advisor wants to stay involved and receive statements, they may be able to.”

FirstPoint shares 35 basis points with the referring advisors for the AUM as long as the client mains a relationship with FirstPoint and was referred from Fidelity (the revenue share is less for those not custodying with Fidelity).

Canter says that by allowing FirstPoint to take on the smaller relationships, advisors can “stick to their knitting” with core clientele whose assets are above the minimums.

Martin Bicknell, who heads Mariner, says that firms taking on client segment strategies, putting their clients into wealth buckets, A, B, C, and D, for instance, can suffer from “service drift”—in other words, what they do for ultra-high-net-worth clients they also try to do for the mass affluent. Or on the other side of the coin, they might have to ignore those clients. Bicknell’s says his firm’s philosophy is that the clients should not get the same level of advice, but the same level of service.

“We segment advisors instead of clients,” says Bicknell of FirstPoint. “So we have a set of advisors that serve zero to $1 million, $1 million to $10 million, $10 million to $25 million and $25 million and up.” Most of the advisors coming through Fidelity will likely come with Fidelity’s custody assets, but it’s not required.

Mariner, launched in 2006, has made a series of acquisitions, buying a small empire of client-service oriented advisory firms for whom it can offer back office practice management duties, and it has bucked trends by asking for no account minimums.  

The firm has $12.5 billion in assets under management.