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.