William Blair & Company, L.L.C. (William Blair) remains committed to the safekeeping of our clients’ assets. For the past seven years, client assets have cleared through National Financial Services LLC (NFS), a wholly owned subsidiary of Fidelity Investments (Fidelity), which is the custodian of our client assets. Fidelity has a strong 75+ year history of providing its clients with exceptional service and capital management. We have a solid and steadfast relationship with them.
William Blair is a private partnership. We have a stable balance sheet and conservative fiscal management. Our primary capital source is from our partners, and we maintain regulatory capital levels well above the statutory requirements across our entities and geographies. Currently, all of William Blair’s operating cash is invested in fully liquid assets.
We oversee and advise on over $75.3 billion in client capital as of September 30, 2024. As mentioned above, those assets are held, custodied, and cleared at NFS, one of the largest private client asset custody providers in the industry.
Who is Fidelity?
Fidelity is a private financial services company that operates a brokerage firm, manages a family of mutual funds, provides fund distribution and investment advice, retirement services, index funds, wealth management, securities execution and clearance, asset custody, and life insurance. Fidelity serves over 40 million investors and has over $12 trillion in administrative assets as of year-end 2023.
Who is NFS?
Established in 1983, NFS is one of the largest providers of brokerage and custody services for private clients. NFS services millions of customer accounts representing over $8 trillion in assets under administration as of year-end 2023, and several thousand relationships with registered investment advisors and broker-dealers.
What is a custodian?
In the financial services industry, a custodian maintains possession and record of client assets and security positions. A clearing services company ensures the orderly transfer of assets and securities from buyer to seller.
Your assets at NFS are segregated and not commingled with their assets. Your assets are readily accessible within normal business settlement cycles.
NFS only executes trades at our direction under the supervision of your William Blair advisor. Additionally, NFS does not provide investment banking services such as using firm capital for investment opportunities, raising capital, or advising and managing mergers and acquisitions.
Custody and Safekeeping at William Blair
Why does William Blair use NFS as an outside custodian?
After extensive due diligence, in 2015 William Blair selected NFS as William Blair’s broker/dealer custodian, to prudently create separation from having both the custody and advisory responsibility for our clients. Fidelity’s culture, their focus on clients, their superior financial condition, and ability to invest in technology as well as other client resources impacted the ultimate decision to enter into agreement with them.
For more information, we have provided the latest Fidelity Annual Report 2023 and NFS Statement of Financial Condition
What insurance is in place to protect client accounts?
There are several investor protections in place, including the Federal Deposit Insurance Corporation (FDIC), the Securities Investor Protection Corporation (SIPC), and “excess of SIPC” insurance provided as part of the Fidelity platform.
What is FDIC insurance? The FDIC insures cash deposits at a bank (checking, savings, bank deposit accounts) of up to $250,000 per individual. The FDIC is backed by the full strength and credit of the U.S. government.
In addition, William Blair clients have access to our Bank Deposit Sweep Program, in which individual ownership accounts are covered up to $2,500,000, and joint ownership accounts are covered up to $5,000,000. Entity accounts (i.e., corporate accounts) are also covered up to $2,500,000.
What is SIPC insurance? SIPC is a nonprofit organization that protects stocks, bonds, and other securities in case a brokerage firm goes bankrupt, and assets are missing. It will cover up to $500,000 in securities, including a $250,000 limit for cash held in a brokerage account.
What is “excess of SIPC” coverage? In addition to SIPC protection, NFS provides additional “excess of SIPC” coverage. The excess of SIPC coverage will be used only when SIPC coverage is exhausted. Like SIPC protection, excess of SIPC protection does not cover investment losses in customer accounts due to market fluctuation. It also does not cover other claims for losses incurred while broker-dealers remain in business. Total aggregate excess of SIPC coverage available through NFS’s excess of SIPC policy is $1 billion. Within NFS’s excess of SIPC coverage, there is no per-customer dollar limit on coverage of securities, but there is a per-customer limit of $1.9 million on coverage of cash awaiting investment. This is the maximum excess of SIPC protection currently available in the brokerage industry.
What other account protection levels does Fidelity employ?
For additional information, please refer to Fidelity’s Customer Asset Protection Overview
About William Blair
We are an 89-year-old private partnership, dually registered as both a broker-dealer (BD) and registered investment advisor (RIA). We have over 1,900 employees across four continents, and offer expertise in investment banking, investment management, private wealth management, institutional sales and trading, and equity research. We provide advisory services, strategies, and solutions to meet our clients’ evolving needs.
As an independent and employee-owned firm, together with our strategic partners, we operate in more than 30 offices worldwide. *