Morningstar Magazine - February/March 2014 - (Page 78)

User Profile Leading Fidelity's Charge for RIAs By Kate Stalter Michael Durbin relishes being on the forefront of advisory industry's transformation. As the investment advisory industry undergoes a massive shift from compensation-based models to fee-only, custody firms are stepping up as change agents, rather than passively following the crowd. Custodians- where registered investment advisors place their clients' assets-across the industry are expanding their suite of services to include better software and even management consulting to serve their clients. Michael Durbin, Fidelity's president of Institutional Wealth Services, which provides custody and other brokerage services to RIAs, professional asset managers, and other institutional clients, relishes the opportunity to be on the forefront of this transformation. He sees big opportunities to grow the business unit, as well as to guide advisors to better outcomes. The registered investment advisor model has been on the rise in recent years. That trend accelerated with the 2008 financial crisis, as advisors left big wirehouses to strike out on their own. Durbin's group counts 3,000 RIAs as clients, and his job is to increase the firm's assets with this segment. "I'm trying to capture for Fidelity as much growth that is underway in this industry as is humanly possible," Durbin says. "I'm having a lot of fun with that." 78 Morningstar February/March 2014 A Focus on Alternative Investments One area in which Durbin and other Fidelity institutional division leaders are focusing on to capture more advisors is alternative investments. They want to bring in more research and education materials to help advisors learn to navigate these often esoteric and complicated investments. And Fidelity tapped Morningstar's alternatives research team to help them do it. "It's not enough just to execute and custody alternatives," Durbin says. "We're still at the point on the curve where there's a lot of education about how alternatives should be put into a client portfolio." Morningstar's alternatives team publishes reports on approximately 80 mutual funds, covering 85% of the assets in the alternatives open-end universe. A ratings committee also assigns a forward-looking qualitative analyst rating to each fund. The ratings and reports are now available to Fidelity's institutional clients. In addition, a team from Morningstar Investment Management produces a select list of the most compelling alternative mutual fund managers available on Fidelity's fund platform. All of this content is delivered though a Morningstar-hosted micro-site, which has been integrated into Fidelity's institutional and advisor platforms. "It's pretty easy for us, as we look around, to partner with Morningstar," Durbin says. "They're a key tenet of our alternative investment platform enhancements." Overseas Eye-Opener Durbin joined Fidelity in 2009, after spending 18 years at Dean Witter and then its acquirer, Morgan Stanley. He signed on with Dean Witter as an investment-banking analyst after graduating from Notre Dame in 1990, and he eventually moved into a group that developed retail products, such as master limited partnerships, mutual funds, perpetual preferred stock offerings, and publicly traded REITs. Durbin's career at Morgan Stanley took him to London as an expatriate with a new business unit, the international private-client group. Charged with sourcing non-U.S. business, he became a student of independent private-client business models around Europe, where universal banks prevailed. "I grew up in the captive private-client culture," he says. "You had to employ advisors under your brand to do anything. When I stumbled across, on the Continent, these smaller independent networks, I was really intrigued by the impact that some of these 'uncolas' were having in countries dominated by these universal banks on every corner." The independent model piqued his interest

Table of Contents for the Digital Edition of Morningstar Magazine - February/March 2014

Morningstar Magazine - February/March 2014
Letter From the Editor
Preparing for the Next 50 Years
Morningstar Managers of the Year
Fixing the Trust Deficit
Rethinking the Path to Retirement
Same Old, Same Old
Global Briefs
The Economic Implications of an Older World
Banking on Performance
Is the Affordable Care Act Healing Health Care’s Woes?70
Baxter Has a Positive Prognosis
Leading Fidelity’s Charge for RIAs
Our Favorite Mutual Funds
50 Most-Popular Equity ETFs
Undervalued Stocks With Wide Moats
Moving the Goal Post

Morningstar Magazine - February/March 2014