Evensky dumping Schwab for Fidelity

Evensky Group Inc., a prominent planning company, is moving its $350 million in client assets from Charles Schwab Corp. to Fidelity Investments Institutional Brokerage Group.

Harold Evensky, chairman of the Coral Gables, Fla., company, and executives at Schwab’s institutional group failed to reach an agreement on services that the group wants as it moves to expand nationally.

Fidelity and Schwab were among four finalists from those who submitted proposals, Evensky executives say.

“He wanted advantages, promises and exclusivity in the benefits and services that we offer above what other advisers get,” says Glen Mathison, a Schwab spokesman, declining to provide specifics.

“Given that we serve 6,000 investment advisory firms, we weren’t comfortable with that.”

Evidently Fidelity is.

Mr. Evensky says one of the reasons his company is moving his clients’ assets is because Fidelity is willing to provide services tailored to the needs of his growing organization.

“Fidelity said, `Look, we’ll work with you in a strategic way,”‘ Mr. Evensky says. “They’ll work with us in designing things that we think are important.”

That includes online portfolio management capabilities and aggregation software tailored to the needs of his group, Mr. Evensky says.

The assets of Mr. Evensky’s clients, which have been in custody with Schwab since December 1991, will be moved to Fidelity over the next several months.

Mr. Evensky says the switch is unrelated to San Francisco-based Schwab’s recent $2.73 billion purchase of U.S. Trust Corp.

Some of the 6,000 advisers that collectively have $243 billion in client assets in custody with Schwab Institutional have complained that the acquisition puts them and Schwab in direct competition.

While the $350 million Schwab is losing from Evensky’s move is only a fraction of the assets Schwab has in custody, it could represent a bigger loss.

Along with Mr. Evensky’s ambitious plans to buy up companies across the country in 26 markets and create a network of “personal family offices,” or PFOs, his goal is to manage more than $19 billion in four years.

He plans to reach that amount by acquiring planners that serve rich clients, defined as those with annual incomes of at least $200,000 or assets of $1 million-plus.

Mr. Evensky, however, leaves the door open to the possibility that not all those planners and their existing clients would be required to put their assets with Boston’s Fidelity.

“The reality is that most of those assets will certainly end up at Fidelity, but we can still be involved even if they don’t move,” he says.

The family offices would offer wealth management and investment services along with bill paying, family counseling and concierge assistance.

Mr. Evensky says he also plans to leverage his expanded organization’s capabilities to get into the business of separately managed accounts

Right now, the Evensky Group does not use separately managed accounts because they are too expensive. That wouldn’t be as big an issue with the new structure, he says.

“We see that as being a major part of what we’re going to be doing,” Mr. Evensky says. “It’s part of Fidelity’s interest in helping us design and make this work.”

But whether the goal can be reached is debatable.

“Harold has the reputation in the financial planning community of always thinking big,” says David Feldman, a certified financial planner with Wechter Financial Services in Parsippany, N.J.

“God bless him if his success takes him to that large number. But it’s anyone’s guess whether through acquisition or in that time frame [the amount] is even attainable,” Mr. Feldman says.