Rich and Co.

Fidelity Crosses the Line? Is Fidelity Enabling “Stalking” of HNW Families, Executives and Retirement Plans?

Take out gun, load gun (with this latest database campaign) – shoot self in foot.

Is no one safe anymore from the “Asset Gathering Monster in Boston?”  Fidelity is spreading across the country a real-time database of ALL high net-worth families’, executives and retirement plans identification information.  They are using it to enlist on the ground support of local brokers and advisors.

Fidelity has always been hyper-aggressive and hyper-competitive – fair enough.  We have no objection to aggressive sales and marketing.  We are dead-set against  a wholesale(r) campaign that could violate the privacy of families, executives and retirement plans.

Below are excerpts from the article.  Some of the quotes give the word “clueless” new meaning.   It was also covered with congratulatory fanfare on – which has recently switched to commercially supported blogs.

Of course, with this database goes the ability to visually geo-locate, identify and track people’s homes using Google maps – 24/7/365.

What’s interesting is that Fidelity sidesteps the reputation risks of this hyper-competitive tactic by laying that off on the local advisor.  Sounds like a win-win for Fidelity.  For the advisor and high net-worth families, executives and retirement plans – not so much.

Practical Note – Advisors, we were one of the first Infinata pilot data users — guess what?

Infinata’s business model is based on selling as many subscriptions of  this data as possible – getting “scale.”Once a target is indentified in any Infinata database they are inundated with calls generating complete inaccessibility and “blowback” against all advisors.

This is our real-life experience with these kinds of databases.  They are not only worthless but actually spoil the advisors reputation and markets.  It’s the equivalent of “mutually assured destruction” of your market.

Once everyone is using the same database – what’s the value or point of differentiation?

(Material Interest Disclosure – We have none on this matter.  In fact, this tactic will likely help our marketing and sales consulting business, since once everyone has the same data, new sales and marketing strategies will be the differentiator.)

Fidelity Launches Gigantic Referral Database To Give Advisors A Shortcut To Wealthy Prospects – by LISA SHIDLERREAD LATER  from

Fidelity Investments is giving its advisors access to a gigantic database of 2.5 million high net worth clients and 1.5 million retirement plans to help advisors boost referrals.

Boston-based Fidelity launched its Referral-EDGESM1 nationally on Thursday.

  • It gives the more than 3,000 advisors that custody with Fidelity access to publicly available information in a database. 
  • The streamlined database makes it easier for advisors to get easy access to interesting tidbits about prospects and clients.

“I think this is cutting edge,” said Tom Modestino, a senior analyst with Boston-based Cerulli Associates “Fidelity is always really innovative. I don’t know anyone else who is doing this.”

What An Advisor Can Learn
Through the database, advisors can quickly learn:

  • if a prospect was recently promoted
  • named to the board of directors of a new charity
  • acquired millions in stock options as a corporate executive of a public company.

The database serves as a creative way to generate referrals in lieu of relying on referrals from branches. Fidelity has about 100 branches, versus Schwab’s 300. 

“Advisors don’t like to cold call,” said David E. Canter, executive vice president and head of Practice Management and Consulting at Fidelity Institutional Wealth Services, noting that while some 51% of advisors at Fidelity gain new business from referrals, only 20% of them consistently ask for referrals.

“This lets advisors in a really targeted way identify high net worth individuals that they wish to pursue as prospects.”

However, this prospecting tool raises a number of questions and potential problems, says Jeff Chester, executive director of the Center For Digital Democracy, a consumer-advocacy non-profit organization based in Washington.

“There are just a bunch of privacy questions with this kind of thing,” he said. “How exactly are they collecting the data and what specific data are they collecting?”

Legislation under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 calls for the formation of the Consumer Financial Protection Board which begins meeting in July. Chester says he’s going to bring the issue of financial services industry and how it collects and uses data online to this board to address.

The data Fidelity is making available free to advisors also includes 1.5 million retirement plans and nearly 150,000 foundations and endowments. The database is updated daily and aggregates information from more than 3,000 U.S. sources.

Modestino also points out that for advisors to have access to retirement plan information is a huge bonus, since the rollover business is one of the most popular ways advisors grow assets.

How The Tool Works
The tool isn’t digging intrusively into high net worth individuals’ private affairs, it’s simply making available public information in an aggregated easy-to-read fashion, says Canter.

He says the tool doesn’t dig up any private information about prospects or clients such as tax records or bank data. Instead, the database streamlines public information available on the internet from the Securities and Exchange Commission, Department of Labor filings, news releases and other data.

“In an elegant and easy fashion this tool enables advisors to get this specific information on a go-forward basis,” he said.

The tool was developed by Infinata and customized for Fidelity. The company pays a licensing fee, but Canter declined to say the cost. He did say it would likely cost thousands for advisors to purchase their own license of such information.

The company quietly held seven workshops last year across the country with more than 200 advisors to gain insight about this tool. The workshops were a huge success, Canter said, and advisors were clamoring to get access to this database daily.

 “It’s a good way to evaluate the information you know about your existing client base,” he said.

The database provides a range of a person’s assets, which is compiled based on information received about salaries often provided by public companies.

How Do You Handle This Information?
The practical issue for advisors may be exactly how to best use the database, says Stephanie Bogan, president of Quantuvis Consulting Inc. a practice management consulting firm in Redlands, Calif. The firm is a subsidiary of Genworth Financial Wealth Management in Pleasant Hill, Calif.

“Having this information is great for advisors,” Bogan said. “But what advisors need to do is translate this information to practical ideas that they can really execute.”

“Social media and technology are evolving far faster than advisors can keep up in terms of how to leverage that information.”


Written by Rich and Co.

March 7, 2011 at 9:02 am

Posted in Uncategorized

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