Fidelity recently unveiled its vision for its next generation “total advisor” technology platform, a platform designed to help registered investment advisors, broker-dealers, banks and family offices digitize their businesses.
The new platform, developed in close collaboration with Fidelity’s clearing and custody clients, centers around a new workstation, Wealthscape, which will serve as a gateway to connect firms to new Fidelity tools and third-party solutions, including eMoney Advisor’s wealth planning software.
The Wealthscape name may sound familiar to those of you familiar with Fidelity’s current technology platform offerings. Today, Fidelity offers a platform called WealthCentral, which is primarily designed for independent RIAs, and Streetscape, the platform that primarily supports broker-dealer reps and hybrid advisors. The Wealthscape name is meant to represent the melding of these two platforms into a single, comprehensive one. Although it has not been obvious to casual observers, Fidelity has been taking steps behind the scenes for a number of years to integrate all of the functionality that financial intermediaries might need into a single platform. Wealthscape is the culmination of that effort, and a lot more.
“Advisors today are faced with a paradox of choice,” says Ed O’Brien, head of technology for Fidelity Institutional. “Technology options have grown exponentially in recent years, making the mapping of technology time-consuming and complicated. For firms that want help designing their technology architecture, our “total advisor platform” removes the guesswork of linking it all together. For firms that want to manage their own technology, Fidelity remains committed to an open architecture environment.”
The new Wealthscape total advisor platform is designed to drive transparency, efficiency and growth for three types of users:
• Financial advisors will benefit from advanced analytics, automated work flows and an integrated suite of portfolio management solutions, all supported by a consolidated data platform that Fidelity says will be multi-custodial. Those advisors who leverage eMoney’s eMX suite of software will benefit from deep integration with Wealthscape, allowing them to move swiftly from collaborative planning with clients to taking actions, such as trading or moving assets.
• End investors, the clients of advisors, will have access to a new, improved client portal. Advisors using eMoney can offer their clients an investor experience deeply integrated with Fidelity’s clearing and custody capabilities, which enables them to organize their financial lives in one place.
• Home office professionals will be able to focus their team on higher value activities through integrated work flows and tools, such as data visualization, to comprehend and act upon advanced analytics.
O’Brien, who introduced Wealthscape at the recent Technology Tools for Today (T3) Advisor Conference, framed the development of Wealthscape as a simplicity play, one that takes a complex technology landscape and simplifies it for Fidelity clients. He highlighted five areas of emphasis, or “Big Plays” for Wealthscape.
Big Play No. 1 is a deep integration with eMoney, empowering advisors to move seamlessly from planning to action. For the investor, this means Fidelity communications (such as statements, trade confirmations, etc.) delivered directly to the eMoney client vault. Investors will be able to enroll for eDelivery and perform account maintenance tasks from within the eMoney portal as well. For advisors, this means a holistic view of their business from within eMoney. This play is piloting in the first quarter of 2016, to be followed by general availability later this year, with further enhancements thereafter.
Big Play No. 2 is the integrated suite of portfolio management tools. The suite will include proposal generation, modeling, performance reporting, advanced rebalancing and fee billing. Modeling, performance reporting and advanced rebalancing are scheduled to pilot in the fourth quarter of 2016, with client profiling, proposal generation and fee billing being piloted in 2017.
Big Play No. 3 is the consolidated data platform. Fidelity’s plan calls for the delivery of the most comprehensive, multi-custodial data platform in the industry. The idea is to provide a holistic view of wealth for the advisor and the end client. The client data will be fully reconciled and performance ready. Access to Fidelity client data will be available in 2016, with multi-custodial data scheduled for 2017. In addition, the data platform will provide advanced analytics empowering deeper conversations with clients and potentially driving better planning outcomes.
Big Play No. 4 is the layering of automated work flows on top of this platform to drive efficiencies, power growth and manage risk. Work flows have traditionally been the focus of broker-dealer home offices, but Wealthscape will deliver automated work flows from the home office (if applicable) to the advisor, and from the advisor to the end investor. To cite just a few examples, work flows for the advisors will streamline time-consuming activities like client on-boarding, preparing for client meetings and data visualization. For end investor clients, work flows will simplify things like providing digital signatures and paperwork submissions.
Big Play No. 5 is a single point of access to all of Fidelity’s capabilities through Wealthscape.
Thoughts And Analysis
A recent Fidelity study concluded that only approximately 30% of advisors surveyed were eAdvisors. Why is this significant? Because Fidelity found a strong link between the use of technology and advisor success metrics. eAdvisors have 40% higher median AUM than non-eAdvisors. They have 35% more high value ($1 million or more) clients. They have higher median AUM per client, and they have more Gen X/Y clients. Clearly, eAdvisors are more successful by every metric that was measured. That being the case, it would seem to be in Fidelity’s interest, as well as the interest of its advisor clients, to convert as many as possible into eAdvisors.
Wealthscape has the potential to create many more eAdvisors for the Fidelity platform. By providing integrated performance reporting, a data platform with advanced analytics and finally providing a robust, tax-sensitive rebalancing solution, Fidelity is filling some gaps in its current offering. Other capabilities, such as robust fee billing, proposal generation, integrated work flows, etc., could potentially propel the Fidelity platform beyond the capabilities of what the competitors offer in the very near future.
Will advisors gravitate rapidly to this platform, or will they shy away from a platform that is so heavily Fidelity-centric? It is too early to tell, but I suspect that for many it will be a great fit. Small to midsize broker-dealers that struggle to keep pace technologically can outsource a good deal of their technology to Fidelity going forward. Breakaway brokers used to having their technology managed for them by their B-D are likely to welcome this development as well. For independent RIAs, the picture is a bit more complex. If you already do most of your business with Fidelity, and its offering meets or exceeds what you currently have, Wealthscape will be a good option. Even those who value their technology independence and prefer a best-of-breed approach may be tempted to give Wealthscape ample consideration, provided Fidelity delivers on all the promise of deep integration, seamless work flows, etc. No pricing has been provided yet, but it is a good bet that the full Wealthscape offering will be very attractively priced.
Having said all that, Fidelity says that the platform remains open, and third-party providers with long-standing Fidelity integrations are sure to respond with innovations of their own, which they will need to do in order to retain their clients that custody at Fidelity.
So, from this writer’s perspective, Wealthscape initially will appeal to some B-D clients, breakaways, and some RIAs transitioning to Fidelity. I don’t envision a mass exodus on the part of current Fidelity RIAs to a Wealthscape-only environment. Longer term, however, when a firm is looking to update its existing technologies, I suspect Wealthscape will receive serious consideration from a portion of the Fidelity RIA population.
If Wealthscape gains traction, as I expect it to, it will be interesting to see how competitors respond. Will they alter their models and offer more propriety technology products? Only time will tell, but the battle among the custodians for technology supremacy shows no sign of abating anytime soon.