Advisors can combine search, reporting and mail merge tools to improve client service. For example, if a corporate action occurs an advisor could quickly search for all accounts holding the security, run a report on the fly with a brief commentary, create a mail merge and e-mail a notification to the appropriate accounts in a matter of minutes.

This IDS platform is the first system we've seen that allows advisors to generate their own XML feeds on the fly. This functionality will enable tech-savvy users to create their own "smart documents"-sophisticated templates linked to data in the IDS system that will be able to consistently refresh themselves.


Advisors have voiced two primary concerns with respect to their portfolio management software providers: independence and control. They have consistently expressed a preference to deal with independent third-party providers. In the case of ASPs, advisors have fretted over the thought of giving up control of their data.

The Fidelity/IDS relationship seems to have anticipated these concerns. By turning to IDS, Fidelity has distanced itself, to some extent, from software sales (although should the seamless integration of the IDS and Fidelity platforms take place, advisors still will be dependent on Fidelity). With regard to control, the IDS system will allow advisors to download data to their desktops in nonproprietary formats without any intervention from IDS, so they will always have full and complete access to their data. In addition, Fidelity and IDS seem to understand that data conversions scare the average advisor to death. "We will solve the conversion problem for advisors, period," said George Baumgarten of Fidelity. "We understand that this is a critical issue for advisors."

The only potential impediment to widespread adoption is cost. Detailed pricing information is not yet available, but I was told there will be an annual service fee component, a service fee and a per account component to the pricing model. A firm with 250 accounts and $250 million in assets under management might expect to pay in excess of $25,000 per year for the service. This is clearly much more than most Centerpiece, dbCAMS and CapTools users are used to paying, but it may be competitive with what some firms are being quoted by Advent, StatementOne and others.

The bottom line is that if the IDS/Fidelity platform can deliver on its promises, this is likely to be the most sophisticated, functional and unified portfolio management, reporting and trading system available to the independent RIA market. The solution offers numerous benefits, including the ability to outsource maintenance of the technology, single data entry (or none where integration provides it), downloads, reconciliation, backup/data recovery and access to data from any location. We should know within about six months whether or not the finished product lives up to its promise.

Joel P. Bruckenstein, publisher of Virtual Office News (www.virtualofficenews.), is a leader in the field of applied technology for the financial service professional.

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