Most advisors I know struggle with technology. In theory at least, they should be able to harness it to improve their efficiency and lower their costs. Eighty-six percent of those surveyed in a recent Moss Adams report sponsored by Fidelity said technology was a critical factor in the success of their business. According to Ed O' Brien Sr., a vice president at Fidelity Institutional, "Our 2007 RIA Efficiency Needs Study demonstrated that advisors who use the right technology can save up to 1.5 hours per day compared to those who don't."
Unfortunately, many firms don't seem to be using "the right technology" because the hoped for efficiencies and cost savings often prove elusive.

For Fidelity, their problem is the lack of an integrated platform, and evidence indicates there are great benefits to using high quality software applications that can all communicate with each other. The company's 2007 study indicated that those RIAs who used such technology had 36% higher revenue per professional and 30% higher profits per owner.

And yet so few firms use these packages mostly because they can't find the right one. And it's not only Fidelity saying so. Other firms and publications have long noted most people are dissatisfied with their software integration, and few are very happy with it.

So Fidelity announced in October of 2007 that it would invest up to $50 million to create such a platform for its advisor/clients. The result of this effort is Fidelity WealthCentral, now in beta testing with approximately 25 RIA firms.

WealthCentral is an ambitious undertaking. Fidelity's plan was to find "best of breed" providers in CRM software, financial planning software, portfolio management and accounting software, and rebalancing/order management software, and then to integrate these applications with each other, as well as the Fidelity back office. The whole package would be accessible over the Web through a single user log-on.

There is no in-house software required by the advisor, so there are no servers required to store the applications and data, and a firm can dramatically cut ongoing hardware and software costs. Users can largely outsource hardware and software maintenance, data backup, redundancy, disaster recovery, etc. There is only one vendor to deal with if a problem arises; there is only one check to write.

The cost to integrate all of these applications with the Fidelity back office piecemeal would be prohibitive, even if you could do it. And Fidelity's economies of scale can keep the costs per advisor lower than they would be if firms purchased each component individually.

If all goes according to plan, WealthCentral users should be able to devote more time and resources to client acquisition, service and retention and spend less time and resources on technology.

From Theory To Implementation
The product is still in beta, and although Fidelity was kind enough to set me up with a test account, there were practical limitations, including the amount of time I could spend working on it. I had a limited data set, and could not actually initiate trades. I did not test every feature in detail.

For that reason, I'm not ready to offer a definitive review at this time, though I can provide some insights into the user experience and the navigation through the platform. While one could argue about whether each software component in the platform is the best in its breed, all of them are strong. Let's examine each in turn.

The WealthCentral home page has various widgets that can be displayed, hidden and rearranged to your liking. It can display information such as the number of clients you have, your total AUM, a breakdown of AUM by asset class, your top ten clients, market updates and the advisor resources you can tap from Fidelity. Buttons allow you to search the platform by client, group or account. Drop-down lists supply instant access to your applications (such as your CRM software, your financial planning tool, your portfolio management software, your RMD calculator, your retirement income evaluator and more). The drop-down lists also allow you to access research and trading tools, as well as back office services and resources (news, practice management help, training and the product library).

The Fidelity back-office section offers a great deal of functionality. The screens are well laid out and easy to navigate. For example, if you click on an account number, a menu pops up that offers options to view an account summary, positions, balances, history, statements, service requests, the portfolio management software and more.

Among its many features, the site allows you to enter trading preferences and trading restrictions. The former allows you to do things like setting trade ticket defaults. The latter allows you to restrict the purchase or sale of designated securities.

For CRM, Fidelity chose Oracle's Siebel CRM on Demand. This online CRM system offers the ability to create appointments, create tasks, store information about contacts, etc. But like all general-purpose applications, this one lacks specific fields necessary for wealth management such as driver's license information, the customer's tax bracket information, the client's net worth and his investment objective. Fidelity, however, has done a good job of including most of the fields advisors require, and the company also offers some additional fields advisors can customize.

Much of the information about an advisor's client base can be accessed by clicking a tab across the top of the screen. For example, if the advisor wanted to view all opportunities to either cross-sell an item to an existing client or seize on a new client prospect, a simple mouse click on the "opportunities" tab would reveal them.  

One key feature that many competing products offer is the ability to create customized work flows, or a series of tasks. This feature usually includes the ability to assign some of the tasks in a work flow to various employees. The "opportunities" section appears to allow advisors to create work flows, but I could not figure out how to create work-flow templates, if the feature exists.

When you click on the portfolio management software button from the drop-down list or from the accounts list, it will launch a custom version of Advent's APX software. This system is quite robust. Advisors can manage both Fidelity and non-Fidelity assets on the application, though assets custodied with Fidelity can be tracked closer to real time (with a delay of about five minutes) as opposed to the more standard daily download routine.

APX offers the ability to set user permissions, to group securities into portfolios and portfolios into groups. Users can create custom composites. They can link multiple persons, or "interested parties" to a portfolio. Holdings, transitions, history and performance, as well as just about any other data point stored in the system can be sorted and displayed in multiple ways. Access to a wide variety of portfolio, equity and fixed-income reports is only a mouse click or two away. It's also easy for users to access tools for tasks such as security reorganizations, to create payment schedules and to calculate bond interest, functions that are often missing or buried in other applications.

For financial planning software, WealthCentral has chosen NaviPlanCentral, the online version of EISI's NaviPlan suite of financial planning products. In my demo setup, I had access to the online versions of both NaviPlan Standard and NaviPlan Extended. NaviPlan Standard is a highly rated goal-based planning solution. NaviPlan Extended is widely regarded as one of the best comprehensive cash-flow based financial planning programs available today.  

I was not able to evaluate the rebalancing portion of the platform, created by Northfield Information Services, but it sounds promising. It remains to be seen how well it will stack up against industry leading products such as iRebal and Tamarac, but Fidelity appears to be keenly aware of the competition and what benchmarks this software will be measured against.

Overall, the suite of products seems to be of high caliber. I have some doubts about the CRM work-flow templates. (If they exist, they are not easy to locate.) There might be some popular features found elsewhere that users will miss here. In design and functionality, at least, WealthCentral is quite appealing. But of course, the devil is in the details, and my short trial was insufficient to uncover any bugs that may lurk beneath the surface. Will the platform stand up to the demands of advisors when the platform is rolled out to the entire Fidelity client base? Only time will tell, but if it does, WealthCentral should attract a large number of users over time.