As Charles Goldman puts one foot out the door, Michael Durbin is taking center stage at Fidelity Institutional Wealth Services.

Durbin has been the president of the RIA custody unit since mid-November of 2008, but advisors still don’t know him well. His role in the company has been overshadowed by Goldman, Fidelity’s head of institutional platforms.

That’s changing fast. Goldman won’t leave Fidelity until the end of March (see story above) but, effective immediately, Durbin as head of custody, Ed Orazem, president of Fidelity Family Office Services, and Sanjiv Mirchandani, president of National Financial Services, are already set to report directly to Gerard McGraw.

They formerly reported to Goldman. McGraw is stationed one notch above Goldman.

This delayering of management at Fidelity is understandable, according to Charles “Chip” Roame, managing principal of Tiburon Strategic Advisors.

“Removal of the layer likely makes sense for Fidelity,” he says. “Certainly, it gives Mike Durbin more authority and control of his own destiny. But he does lose a great counselor [in Goldman] who had helped build Schwab to be the number player in the same field.”

Goldman was hired by Fidelity just a week after Durbin’s hire and became Durbin’s boss. The Goldman hire was big news among RIAs and stole some thunder from the announcement about Durbin.

Durbin came to Fidelity from Morgan Stanley of New York. He was hired by Michael Clark, who was head of the institutional products group at the time.

Powerful legacy

Despite Durbin’s title, many RIAs saw Goldman as the head of Fidelity Institutional. He had a superior position and title, seemed to call the shots on major initiatives, and he had a powerful legacy as the former head of Schwab’s RIA custody unit. People knew, liked and expected big things at Fidelity from Goldman.

Durbin has had more to learn about the RIA custody ropes after 18 years at Morgan Stanley.

Yet Mark Sear, partner for Luminous Capital, which manages $2.7 billion from Los Angeles, says that what he has seen of Durbin has been very positive. Luminous brought most of its assets to Fidelity in 2008 when it broke away from Merrill Lynch

“I think Durbin’s great,” he says. “He can get stuff done. He’s bent over backward for us.”

Mark Sear never knew Goldman but he's had good experiences with Mike Durbin. "He can get stuff done. He's bent over backward for us."
Mark Sear never knew Goldman but
he’s had good experiences with Mike
Durbin. "He can get stuff done.
He’s bent over backward for us."

The first time Durbin came into public view was when he was credited with decisions regarding Fidelity Institutional price cuts early in the fall of 2009.

More visible

Since then he has been more visible with the media, and I interviewed Durbin earlier this month.

The discussion was related to a summary and outlook of Fidelity Institutional that RIABiz will soon publish as part of a series on asset custodians.

In the interview, Durbin spoke about his confidence in his company’s RIA custody unit.

Fidelity has a special opportunity to win assets from wirehouses, according to Durbin, who once worked for one.

“I think Fidelity has done the best job of speaking the language of the breakaway,” he says.

Durbin also says that Fidelity has a value proposition that competitors can’t match because it marries technology, service and investment expertise in a way that no other custodian can claim.

Fidelity is known to spend about $2 billion annually on technology, and it owns one of the world’s largest mutual fund companies. It is rolling out a major service initiative for RIAs. See Goldman aims to make red carpet service for RIAs universal at Fidelity Investments

Pedal to the metal

Fidelity also plans to keep the pedal to the metal for RIAs with a larger budget in 2010 than 2009, Durbin says.

“The firm is extraordinarily supportive,” he says.

Indeed, one recruiter who works closely with Fidelity and who asked to remain anonymous, says that Durbin can expect tremendous support now that Goldman is leaving.

“Now they have to retain Mike and make sure he’s successful there,” he says.