Broadridge Acquisition of Fi360 Underlines RIA Fiduciary Evolution

Broadridge Financial Solutions last week announced it has entered into a purchase agreement to acquire Fi360, a growing provider of fiduciary-focused software, data and analytics for financial advisers and intermediaries.

In recent years, Fi360 has grown organically and through its own acquisition activity. Last year, for example, Fi360 acquired the Center for Fiduciary Management (CFFM). The firm has also been active in forming integrations and working partnerships with fiduciary-focused retirement plan providers.

Speaking with PLANADVISER about this latest development, Michael Liberatore, president of Broadridge’s mutual fund and retirement solutions business, and Bill Mueller, CEO of Fi360, say they are very optimistic about the opportunities for synergy between the two firms. Liberatore notes that Broadridge, through its work with retirement plan recordkeepers and plan service providers, already touches tens of millions of retirement plan participants on an annual basis.

“Our adviser clients speak about the need for better tools to help them prospect, win and manage plans,” Liberatore says. “Our view at Broadridge is that Fi360 has the most comprehensive and effective set of solutions to do this while also demonstrating a deep commitment to fiduciary practices and responsible management.”

According to Liberatore, there are other niche providers in the RIA industry that are “really good at one thing or another—prospecting, benchmarking, etc.” But, he says, “We determined that Fi360 has the most comprehensive sweep of services.”

“We are excited about putting what we do on a bigger stage,” Mueller says. “If you look at the two firms, we have similar philosophies about open architecture and agnostic services. So, working with Broadridge is a great opportunity for us to expand what we do, both on the tools/solutions side and on the fiduciary training side for advisers. Broker/dealers, wirehouses and large RIAs are increasingly interested in this type of oversight support for their retirement businesses.”

Liberatore says Broadridge sees the RIA marketplace as being naturally complementary to the firm’s mutual fund trading intelligence business.

“We’ve always had a strategy to be close to the advisers that are heavily focused in the retirement market, and this acquisition will certainly help us connect even more deeply with those advisers and provide better solutions to them,” he says. “On the analytics side, we’ve been working with asset managers to help them gain transparency into the retirement plan ecosystem. We think the combined team will drive new product offerings across trading and custody and on the data analytics side. That’s one of the reasons we decided it was not enough to just partner with Fi360. An acquisition could mean one plus one equals more than two, in this case.”

Considering how the fiduciary services marketplace has evolved in the last decade, Mueller says the future looks bright.

“We see continued evolution towards fee-based fiduciary advisory services,” Mueller says. “Frankly, this is not so much a regulatory-driven event. It’s more of a market-driven event at this point. When I think about our clients and their challenges, it’s been an evolving discussion from being the broker of record to becoming a 3(21) fiduciary and now a 3(38) fiduciary. There has been a progression along this fiduciary scale and we’re continuing to move towards a higher fiduciary bar—in terms of more oversight and just a higher level of professionalism in general. This is great for the industry, and we are eager to support this trend by providing the tools, platform and data to make the job of being a fiduciary easier.”

Liberatore echoes that idea, noting the ongoing shift to fee-based advice and imminent regulatory changes, including the SEC’s Regulation Best Interest, are increasing the scrutiny on firms to ensure that they are demonstrating prudent advisory practices.

“Our goal is to help firms stay ahead of this evolving regulatory landscape,” he concludes. “Integrating Fi360’s solutions set with Broadridge’s leading wealth and retirement solutions will enable better support for clients as they build and maintain responsible fiduciary practices.”