To be sure, RIAs have chosen not to work at a financial giant that would provide their office space, staff and technology systems. Since they make a conscious choice to build their own businesses, RIAs tend to have a penchant for doing things their own way.
Consequently, many RIAs are uncomfortable about allowing their businesses to rely on a custodian for technology solutions as well as clearing services and have been skeptical in the past of custodian-provided technology solutions. In telling RIAs which apps they must use in their practice to optimize their relationship, a custodian runs the risk of being perceived by RIAs as using strong-arm tactics.

Despite the tension and controversy that might accompany an effort by custodians to steer their RIA clients toward a particular technology solution, Fidelity, Schwab and Pershing have built elaborate advisor workstations integrated with a limited number of advisor apps.

For example, Fidelity's Wealth Central platform is integrated with Advent PortfolioExchange for portfolio accounting, NaviPlan for financial planning and Oracle CRM. Pershing Advisor Solutions' NetX360 program has integrated with BlackDiamond Reporting for portfolio accounting, Redtail Technology for CRM and MoneyGuide Pro for financial planning.

All three of these custodians say they plan to integrate with more applications, but building each interface one by one is different from providing access to vendors through an API, as TDAI has done.

"We interviewed with advisors and they were adamant about wanting to use applications they currently use in their firms because they have spent money and time on training their staff to use those apps," says Jon Patullo, TDAI's director of technology production. "They don't want us to dictate what system they must use to benefit from integration with our custody platform. Our approach is different because it is consistent with the flexibility advisors want."

By distributing an API telling vendors how to request data on its custody system, TDAI enables many tech vendors to simultaneously develop interfaces incorporating its account data and enabling innovation faster.

By opening its database to many tech vendors, a custodian supports the growing trend toward specialized advisor apps, powerful tools that fulfill just one specific mission for an advisor but does that one thing very well.

For example, LifeYield, a two-year-old company, optimizes income streams for advisor clients using a proprietary algorithm developed by Paul Samuelson, LifeYield's co-founder and chief investment officer. LifeYield's narrow focus-telling advisors which assets should be located in taxable versus tax-deferred accounts and which should be sold first to generate income-adds some new ideas in the burgeoning category of rebalancing software. While LifeYield is focused on enterprise sales to independent broker-dealers and their registered reps, it could integrate fairly easily with a custodian that opens its platform through an API, providing more choice to RIAs.

LifeYield is just one example of a bevy of specialized apps coming to market that aim to do one thing great. These specialized apps provide a way to achieve the holy grail of independent advisor technology: the "silver bullet," a single app for managing an advisory practice.

The silver bullet, a term I coined in 1998 to describe the elusive all-in-one advisor desktop, is now achievable. APIs enabling an advisor's data to pass freely from one app to another allow an advisor to knit together the apps constituting his own personal silver bullet.