Fidelity institutional Wealth Services recently announced the launch of the first comprehensive, cloud-based virtual desktop solution for their advisors. Working with cloud outsourcing company External IT, this solution will provide advisors with access to their entire suite of business tools, both desktop and cloud-based, from anywhere via a Web browser, including from mobile and tablet devices.

Since the advent of personal computer usage in financial advisory offices, users have been trying to integrate all of their applications into a unified advisor workstation. Early attempts at integration date back to the days when DOS was the dominant PC operating system, when vendors such as dbCAMS integrated an early version of their portfolio management software with what today would be considered a basic CRM system. About a decade ago, Interactive Advisory Software began offering an integrated system comprising a CRM module, a portfolio management module and a financial planning module. That system has since been expanded to include rebalancing, trade order management and a client portal.

More recently, virtually all of the major custodians have been at the forefront of helping advisors integrate various industry-specific applications such as CRM, portfolio management software, financial planning software, rebalancing software, form-filling software and, in some cases, document management software with varying degrees of success. The glaring omission from this move toward integration has been another category of software applications: the general business applications that most small businesses require. This category includes applications such as Microsoft Office (Word, Excel, PowerPoint, Access, Outlook, etc.), QuickBooks and Adobe Acrobat, to name just a few examples. The result has been that many advisors now live in a world where some of their applications are cloud based, while others run off a server in their office.

Several vendors, including External IT, Right Size Solution, CloudRIA and Baer Software currently offer integration solutions to advisors, but few advisors are familiar with these firms, so adoption has been slow. Furthermore, most advisors are not sufficiently familiar with cloud infrastructure to discern whether a cloud provider’s infrastructure can meet the demanding performance and regulatory requirements of today’s RIA firm. External IT’s collaboration with Fidelity brings together the former’s extensive knowledge of cloud-based systems and virtual desktops with Fidelity’s knowledge of advisors’ needs, as well as the security and regulatory issues relating to advisor technology. This should provide advisors with a greater level of comfort than they would have approaching this technology on their own.

For those readers unfamiliar with the firm, External IT was one of the first full-service cloud IT outsourcing companies. Their cloud-hosting platform, OS33, unifies both Windows applications and Web-based applications in a single interface. In addition, the company offers integrated managed services that provide everything from a user help desk to data migrations, nationwide onsite assistance and remote management of clients’ networks. Founded in 2000, External IT has been delivering IT services for more than a decade and is a recognized innovator and pioneer in the cloud computing space.

So what does this mean for advisors in practical terms? Let’s say that you are already using some cloud-based systems such as MoneyGuidePro for financial planning and Salesforce for CRM, but you still have a server for applications like PortfolioCenter and QuickBooks. With OS33 from External IT, you can now outsource the hosting and maintenance of PortfolioCenter and QuickBooks to External IT, and you can access all of your applications a unified virtual desktop.

Most readers are familiar with Fidelity Investments. The firm is one of the world’s largest providers of financial services, with assets under administration of $4.1 trillion, including managed assets of $1.7 trillion, as of March 31, 2013. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. 

The Fidelity/External IT Offering
As mentioned earlier, External IT has been offering virtual desktop solutions directly to advisors for some time. So what makes the Fidelity configuration unique? A few things. This offering is in a dedicated environment designed by External IT in consultation with Fidelity. Because Fidelity understands how important data access is to advisors, this configuration provides multiple redundancies for critical files that permit External IT to guarantee return to service within an hour for e-mail and MS Office documents. That guarantee is far better than what many other hosts of Microsoft Exchange (e-mail) and Microsoft Office provide.

The virtual desktop comes preconfigured with the software applications that advisors commonly use. These include MS Word, Excel, PowerPoint, Outlook, Access and Publisher. Also included are preconfigured versions of Internet Explorer, Acrobat Reader and QuickBooks. In addition, the package includes a central document repository hosted in the cloud. This means that advisors can access their documents and their MS Exchange-hosted e-mail anywhere at any time.

Furthermore, the configuration includes an External IT support team that is dedicated specifically to Fidelity advisors, unlimited dual-site replicated e-mail storage, replicated file storage, mobile device support, a desktop/laptop agent for software updates, antivirus, patching and remote support. All of this, and more, with the exception of a QuickBooks license is included in a single subscription price of $150 per month per user.

The desktop can be configured with links to all of an advisory firm’s cloud-based providers. External IT’s platform is capable of offering single sign-on via Security Assertion Markup Language (SAML). They already offer single sign-on for Salesforce and a number of other third-party vendors. With the scale that this offering should provide, it’s a good bet that many cloud vendors serving the advisor community will pursue single sign-on capabilities with External IT. Unfortunately, the initial version of the Fidelity configuration will not include a single sign-on to Fidelity WealthCentral, so advisors will have to click on the WealthCentral tab and provide their WealthCentral credentials. We expect single sign-on to WealthCentral to be added soon. Non-cloud applications can be hosted for an additional charge.

The virtual desktop can be customized at the firm level to include the firm’s corporate colors and logo. The firm’s administrator can provision and configure users. The administrator can also control who can access what corporate data, and where they can access it. For example, the administrator can limit file and folder access to a subset of employees only. The administrator can also limit access by location, so that only some employees can access documents remotely. Furthermore, administrators control how data can be saved, so, for example, if an employee is working on a document remotely on a laptop, the system can be configured so that the employee can only save the document to the cloud, not to the hard drive of the laptop. This functionality protects against a laptop theft, as well as an employee copying data that the firm would rather not have copied.

In addition, the administrator controls what information appears in the “shared links” section of the virtual desktop. Shared links are links that the firm wants to make readily available to all employees. These might include links to things like the firm’s 401(k) provider, health insurance carrier, e-mail archiving service, etc.

Individuals can customize their main page by dragging and dropping or resizing individual elements that may include their own personal links, the weather, various RSS feeds, a Google search bar and other available elements.

We’ve already covered a number of advantages of this Fidelity/External IT offering, but they are worth repeating. Advisors get a secure, redundant virtual desktop that offers integration, mobility and customization options.
Administrators have granular controls to control and monitor the firm’s valuable data. Other advantages include the ability to outsource their IT infrastructure, which allows them to devote their time to moneymaking pursuits, rapid deployment, offline access to their applications (work done locally will synchronize with the servers when the user reconnects). It is also worth noting that there are no startup or transition costs.

Although the virtual desktop was initially developed with the independent RIA firm in mind, Fidelity will make it available to clients of National Financial and their family office division as well. Smaller broker/dealers with legacy systems in particular may find the ability to outsource their IT preferable to making a large capital investment in new hardware and software.

Although the virtual desktop looks enticing, there are some potential negatives to be aware of. In order for this to be a viable option, plenty of Internet bandwidth is desirable. The more bandwidth you have in your office, the happier you are likely to be with a virtual desktop approach. Ideally, firms will also want Internet redundancy. If your primary carrier goes down and you have a backup, you will still be able to work online. If not, employees will eventually need to go elsewhere to get work done in the event of an outage. In fairness though, the need for Internet redundancy applies to all financial firms today to some extent.

Second, as mentioned earlier, the initial version will lack single sign-on to Fidelity WealthCentral and many third-party providers. This is not a major flaw, but ideally single sign-on for WealthCentral and for partners is preferable.

Clearly, there is more that Fidelity and External IT can do to improve the offering. For example, in theory at least, Fidelity could “widgetize” portions of their back office Web site and WealthCentral so that they can appear within the External IT home page. This would make such data more accessible to users with fewer clicks, but there are technical issues that must be addressed before that can happen.

In Conclusion
Although virtual desktop technology is not new, the combination of External IT and Fidelity make such systems much more approachable to RIA firms, B-D firms and family offices. The technology is solid, and the price is appealing. The scalability and security of this particular offering should help distinguish it from competitors. Early indications are that advisors are interested. I spoke with Ed O’Brien about a week after the initial release of the offering, and he told me that a significant number of Fidelity’s larger RIA firms have expressed an interest in the virtual desktop.

Only time will tell how successful the virtual desktop proves to be among advisors, but Fidelity deserves a great deal of credit for thinking outside the box and delivering an integrated solution that brings together industry-specific and general productivity tools in a single package at an affordable price.