The most powerful executive overseeing financial advisors at Fidelity Investments has reportedly been replaced, according to an Investment News article published earlier today.
Michael Clark, 51, president of Fidelity’s Institutional Products Group, took a medical leave of absence and his position is being filled by Gerard “Gerry” McGraw, 54, who has been running the company’s operations and services group for the past six years, according to the article.
Clark was hired in October of 2007 by Fidelity’s Rodger Lawson and Fidelity employees were informed that he was withdrawing from day-to-day involvement on Aug. 26 in a memo sent by Lawson, according to Steve Austin, spokesman for Fidelity.
In the memo, he adds that he is pleased that Clark will continue to provide input and advice. He also praised him for the leadership that he provided his division through such tumultuous times, adds Austin.
Based on an interview I had with Clark during the winter, I believe I can offer some perspective on the significance of his bold mission at Fidelity.
I can also say that Clark’s departure may have been in the works for a while. An industry executive contacted me a few weeks ago to say that there was about to be a major executive shake-up at Fidelity. He declined to give me details and other sources of mine did not respond to inquiries.
I first interviewed Clark this winter after he had gone on a phenomenal hiring spree and had vowed to take Fidelity’s advisor business in a new direction. First, he hired Ron Fiske Jr. last fall from Pershing to manage product offerings for financial advisors who do both advisory and commission business.
In November, he hired Michael Durbin from Morgan Stanley to replace Jack Callahan as head of Fidelity Institutional Wealth Services. But he really gained attention when he recruited Charles Goldman who had just vacated his position as head of Schwab Institutional. Goldman was put in a newly-created position overseeing Fidelity’s advisor custody, broker-dealer clearing and family office businesses.
In making these hires, Clark, who oversaw a $15-trillion unit of JPMorgan, made 20 acquisitions while he was there, did not equivocate about what he expected from his cadre of new charges.
“What we want to do here is to be at the front” of the RIA custodial business, he said. “We don’t want clients to tell us: This has to get done. We don’t like baling wire and duct tape – we want industrial strength.”
Two of the objectives that Clark set forth for his division of Fidelity were to bring the service level of RIAs on a par with top rival Schwab’s and to find a way to create harmony and synergies between advisors using National Financial Services’ and RIAs using Fidelity Institutional Wealth Services. The two groups had been traditionally in silos apart and he wanted them to be one solid business.
“A lot of [custodians] are opting for the [single] channel model,” Clark said. “One thing about Fidelity is that we want to serve the entire financial intermediary space” of brokers and RIAs.
Editor’s note: I enjoyed interviewing Mike Clark this winter. He was warm, joking and patient with me. When I needed to ask follow-up questions, he made the time. His New York accent stood out among the Boston accents of so many of his Fidelity colleagues.