Fidelity one up in hunt for accountants

Fidelity Investments has enlisted a major ally in its bid to court accountants.

The Boston mutual fund company, which is aggressively trying to expand the number of advisers using its services, recently signed a deal to become the exclusive provider of custody, clearing and brokerage services to members of the American Institute of Certified Public Accountants.

The agreement calls for members of the accountants’ association to execute through Fidelity customers’ orders for both individual stocks and mutual funds.

In return, they will get an undisclosed discount on the fees normally charged.

With the demand for traditional accounting services dwindling, a growing number of accountants are going into the investment advisory business.

While only 9,500 of the group’s 330,000 members currently give investment advice to clients, the deal gives Fidelity a leg up in its escalating battle with San Francisco’s Charles Schwab Corp. — and others — to woo accountants.

Schwab is testing a strategy to link accountants with customers through its adviser referral program, AdvisorSource.

If successful, the program is likely to be launched nationwide later this year. The No. 1 discount brokerage has also hosted how-to seminars aimed at accountants trying to break into the money management business.

microsoft on the trail

Meanwhile, Microsoft in November announced that it had signed up 400 certified public accountants for Advisor Finder, the referral service it is offering with Boston financial research firm Dalbar Inc.

“It has the making of a really powerful alliance,” Dalbar president Louis Harvey says of the Fidelity-AICPA deal. “Fidelity now has the ultimate credentials with which to get CPAs.”

Schwab spokesman Glen Mathison plays down the significance of the alliance. “We are resistant to the idea of providing blanket price discounts to members of a gigantic organization,” he says. “What we say to members of the AICPA is that we stand ready to do business with them and that we are happy to have conversations with them regarding our services and prices so that they can compare and shop around.”

About 5,800 advisers, representing $213 billion in assets, do business through Schwab. Fidelity, meanwhile, has custody of $40.2 billion in assets for 781 advisers.

And it’s going after more advisers, particularly those coming from the accounting industry.

Besides getting a price break — the extent of which will be revealed by the accounting society later this week — CPAs gain access to an array of products and services offered by the fund giant.

Those services include access to portfolio management, trading and reporting software as well as a a CPA start-up guide and a toll-free number only for AICPA members.

“It’s only natural that CPAs, who know so much about their clients’ financial situations, might want to help them plan and implement their investment strategies,” says Robert P. Mazzarella, president of Fidelity’s Institutional Brokerage Group.

Barry Melancon, president and chief executive of the accountants group, says the alliance is likely to encourage more CPAs to seek the association’s personal financial specialist designation. It goes to members who have at least three years’ financial planning experience and pass a six-hour exam.

The association also expects to begin heavily marketing its efforts to assist CPAs getting into money management.

“That increased attention and focus will drive more CPAs in that direction,” Mr. Melancon says.