Fidelity Investments recently announced that it is developing a new, integrated Web-based wealth management platform for registered investment advisors (RIAs), with a projected rollout date of late 2008. Dubbed Fidelity WealthCentral, the new platform will integrate key RIA operational systems such as customer relationship management (CRM), portfolio management and financial planning, along with the capabilities of Fidelity's current Advisor     Channel platform, melding them into one hosted unified workstation that can be accessed through a Web browser.
According to Jack Callahan, president of Fidelity Institutional Services, Fidelity is investing $50 million in this project over a period of three years. "This represents the single largest investment we have ever made in the independent RIA business," Callahan says.

Oracle's Siebel CRM On Demand will serve as WealthCentral's customer relationship management tool. Meanwhile, Fidelity has contracted with Advent Software to provide Advent Back Office Services, which will deliver Advent Portfolio Exchange (APX) software as an outsourced solution.             Emerging Information Systems Inc. (EISI) will provide the financial planning software in the form of NaviPlan Central.

The advantages of having all these key advisor applications combined into a single, unified Web-based platform should be readily apparent. First, you are outsourcing a good portion of your IT needs, including hardware and software maintenance, backups, security and disaster planning for these applications. Perhaps the greatest advantage, though, is that such a system drastically reduces the data entry burden, or, as Callahan says, "It eliminates keystrokes." Callahan believes that many advisors underutilize tools such as CRM software and financial planning programs because the data entry is tedious and time consuming. He believes that by automating data entry, Fidelity will help eliminate one of the greatest impediments to broader use of these tools.

Data entry is minimized in a number of ways. If you enter data manually into the CRM system once, you will not be required to enter that data again. If the data you entered into the CRM system is later required to populate Fidelity account forms, Advent APX or NaviPlan Central, the data can be accessed from the database where it is stored, and then used to feed the application that needs it.
In some cases, no data entry at all will be required of the advisor. According to Callahan, if a new client has an existing brokerage relationship with         Fidelity, and if the client authorizes Fidelity to share the existing client data with the advisor, Fidelity can use the client data on their brokerage system to pre-populate WealthCentral with the new client's data.

What types of data are we talking about here? Well, clearly, demographic data like name, address, phone number, e-mail address and Social Security number would be included, but it goes beyond that. Fidelity will also feed brokerage account data such as holdings, tax lot basis and 180 days of transactional history into the advisor's portfolio accounting system, too.

Advisors may even be able to use some of these capabilities as a prospecting tool. Currently, as part of the search for clients, many advisors ask prospects to supply statements of their current holdings. Advisors then enter this information into a software program, perform an analysis and critique the existing portfolio. Right now, the cost of providing this service to prospects can be substantial, with much of the cost attributable to collecting the data and entering it into the appropriate application. If the potential clients held their assets in a Fidelity brokerage account, however, it would be possible for Fidelity to feed that information into WealthCentral for analysis. When I asked Fidelity Senior Vice President Ed O'Brien about this, he told me that Fidelity's current WealthCentral plan did not include a provision for sharing prospect information; however, he did say that doing so is feasible and that Fidelity might be able to offer this feature in the future.

An Exclusive First Look

Callahan and O'Brien recently provided an exclusive preview of the WealthCentral prototype. The platform is still under development, so some features may change before the final launch, but based on what I've seen, WealthCentral will likely represent a revolutionary advance in advisor technology and efficiency.

Since the platform will be totally Web-based, WealthCentral just might be the catalyst that breaks the Microsoft Windows stranglehold on the financial service sector. A growing number of advisors have expressed an interest in using the Apple operating system. Assuming WealthCentral works with the Mac version of Internet Explorer, or with one of the other Mac-compatible browsers, advisors will be able to conduct virtually all of their business from an Apple computer. They might want to add a Mac edition of Microsoft Office to the mix, but other than that, they should be set.

The advisor dashboard or home page, illustrated in Figure 1, is the first view an advisor will see when logging onto the system. To the left of the screen, there are two sets of navigation tools. At the top, there are buttons that allow advisors to easily access popular views based on initial feedback from focus groups. These include the home page view, a client-centric view, an account view, an investment view, a prospect view and a groups view.     Below that, the user can create links to favorites for rapid access. These favorites can be grouped by subject for even quicker access.

For example, in Figure 1, we see shortcuts to Siebel CRM On Demand and NaviPlan grouped together under the heading Planning & Tools. Additional navigational aids, some of them repetitive, are available at the top of the page. For example, an advisor could also gain access to NaviPlan by clicking on Planning & Tools above, but it would take longer because you would first have to click the menu item and then select NaviPlan from the drop-down menu.

The main work area of the page is totally customizable. Advisors, if authorized by their firms, can select from a large number for views, including quotes, a pie chart of the firm's assets under management grouped by asset class, top holdings, top clients, etc. Alerts and customer service requests can be tracked here as well, if desired. As an alternative, a firm administrator can create custom templates linked to roles within a firm. So for example, all portfolio managers within a firm might be assigned one set of views in the dashboard, while customer service reps might receive a totally different group of windows in their views. Using the same entitlement system, administrators can define who within the firm has access to what information, as well as what they can do with the information. For example, a system administrator could define which accounts each employee has access to. The administrator can also define who can edit, copy or print information.

When working in the client view, the left navigation bar lists all clients, along with the number of accounts associated with a client. Each client entry within the bar can be expanded with a mouse click to reveal a summary of information pertaining to the client relationship. This includes staff members assigned to the client, total net worth, available cash, total market value, number of members within the household and the date the client relationship commenced. The client list can be searched or filtered using the tools at the top of the client list.

Within the main work space in the client view, there are numerous tabs. The overview lists accounts, sorted by household member; a list of household members; and a financial summary. Much of the information is in the form of hot links. By clicking on any hot link, the user can "drill down" to see details related to the hot link. So, for example, if you clicked on a name under "households," all of the individual accounts would appear. If you clicked on an account, the contents of the account would be revealed.

Other tabs include positions, balances, transactions, order status, documents and notes. In the case of documents, advisors can attach an unlimited number of documents to a client record, but the document storage capabilities are client-centric, and they do not represent a full document management system.

The platform offers tight integration with Advent APX, Advent's next-generation portfolio management and accounting system. Perhaps the biggest news on the portfolio management and reporting front is that APX will download and reconcile client accounts held not only at Fidelity, but at other custodians as well. So the good news is that you will not have to work exclusively with Fidelity to use APX through WealthCentral. On the other hand, there is one benefit to housing accounts at Fidelity: integration with the trading platform. With assets housed at Fidelity, all trading can be done from right within WealthCentral; for held-away assets, you would have to launch another application to do the trades.

Portfolio reports should meet the needs of most. APX includes a rather extensive list of standard reports. In addition, Advent has agreed to include an additional 30 custom reports that Fidelity requested based on feedback from focus groups. More may be added later if needed.

There are no immediate plans to offer client-facing reports through APX or WealthCentral; however, LightPort, a firm that provides client-facing Web portals, offers preferred pricing to Fidelity advisors. Through LightPort, advisors can automatically upload portfolio reports and other files to a secure client VirtualSafe.

The CRM program relies on the standard Oracle Siebel On Demand architecture, but it also includes many custom fields that advisors require such as Social Security numbers, dates of birth and referral sources. It links to Outlook, so both incoming and outgoing e-mail initiated from within the CRM system becomes part of the client record.

The CRM system itself is quite extensive. It can accommodate actions and work flows (a group of actions). Workflows allow you to automate multistep processes, assign them to one or many people in the office and track the process of the work flows. For example, opening a new client relationship might require eight separate actions involving three staff members as well as the new client. By creating an "open new account" work flow, you can set the whole process in motion with a single mouse click. Fidelity intends to offer a number of "workflow templates," or preconfigured processes. This should make it easier for advisors to implement work flows by allowing them to modify existing templates instead of starting from scratch.

In addition to work flows, advisors can use CRM to create appointments, create customer service actions, prospect, and cross sell. Advisors can also view portfolio summaries from within the CRM system so they can answer client questions without navigating away from their current screen.
As is the case with Advent, reporting is rather extensive. I'm told that the CRM system will offer at least 75 reports. Besides the client-centric reports, there will be many reports that can be used for business analysis, such as ones to help advisors identify who the best prospects are, reports on sales-cycle duration and average close rates. You will also be able to report on the amount of time your firm spends servicing a client or household, revenue per household, profit per household, etc.

EISI will supply NaviPlan Central for financial planning. NaviPlan Central is EISI's hosted NaviPlan platform capable of delivering Web-based versions of both NaviPlan Standard and NaviPlan Extended. The financial planning applications will be able to access data from other WealthCenter components and use that data to pre-populate initial plans and then update plan data regularly. In addition, EISI's NaviPlan Central has the capability to offer online/offline functionality; that is, if their systems are configured to allow for it, advisors can download planning files from the server, work on them without an Internet connection, and then upload their updated files later. According to Ed O'Brien, the current plan calls for this functionality to be available in the initial release of WealthCentral.


The pricing for all this, while it has not yet been disclosed, should be attractive. The Fidelity portion of WealthCentral, the software that replaces the AdvisorChannel functionality, will of course be provided free of charge. As for the CRM, financial planning and portfolio management applications, a Fidelity spokesperson indicated that prices were still being negotiated, but the company expects each application to be available at a 20%-50% discount to what its price would be if purchased directly. Discounts will undoubtedly be available for multiple users and larger custodial relationships. Remember that this pricing includes the integration, a key to the value proposition. In addition, I'm told that unlimited storage will be included with each account, so no matter how many e-mails, documents and reports are stored on the system, the price will remain constant.

Overall, the pricing for CRM and financial planning sounds about right. Whether Advent is a good deal depends on where the break points kick in and how steeply the price falls when you start hitting them. For example, I don't think many would balk at paying $90 annually for the first 100 accounts, but far fewer would agree to pay that rate on the first 300 accounts.

What Could Go Wrong?

The first question most potential users of the system will likely ask is: Who owns the data? According to O'Brien, it is the advisor. Fidelity is in the process of developing contracts that will clearly delineate where the data is located, who has access to the data, etc. This document will also clarify the relationships between the parties. I'll try to summarize some of the key points.

O'Brien says each vendor will host its own application: Oracle will host the CRM application, EISI will host NaviPlan Central, Advent will host APX and Fidelity will host the brokerage interface. Rather than relying on one centralized database, each application will store its own data and share it with the others in real time or near real time. For security, all the applications will use a standard industry protocol, SAML 2.0, to authenticate one another before sharing data.

From a design perspective, one could argue that storing data in a single database would be preferable, yet the Fidelity arrangement may have some special appeal to advisors. Since each application vendor is hosting its own database, the advisor's relationship is with the vendor, not with Fidelity. This provides at least some level of separation between Fidelity and the advisor. In addition, since the vendors are hosting the data, the advisor/vendor relationships could stay in place should the advisor decide to terminate the relationship. That's not to say that advisors could divorce from Fidelity unscathed. In dissolving the relationship, the advisor would lose two important advantages: access to Fidelity's preferred vendor pricing and the integration with Fidelity's back office.

Another concern is training and support. I'm told that Fidelity will provide "level one" support for all the applications. This means that if an advisor has a problem with any component within WealthCentral, it will initially be addressed by a Fidelity employee. If the level one support person cannot resolve the issue, it will be escalated to vendor-related "level two" support staff.

Training costs should not be ignored. While it is apparent that Fidelity plans to address the training issue, it will take time for users unfamiliar with the different applications to get up to speed on them. While the long-term benefits of WealthCentral will justify the short-term transitional pain, the operational difficulties involved in making the switch should be carefully evaluated.

Bottom Line

As I stated at the outset, this offering could be revolutionary for a number of reasons. Let's start with the fact that it is the first integrated wealth-management platform. Yes, I know that a few smaller firms such as IAS have built integrated systems, but they do not integrate best-of-breed applications such as NaviPlan, Advent APX and CRM OnDemand. Furthermore, they do not integrate with a custodial brokerage platform, and they do not have the financial might that Fidelity and its partners bring to the table.

If WealthCentral meets expectations, it will create significant efficiencies and cost savings for those who take full advantage of it. In addition, if Fidelity can pull this off, it will leapfrog the technology offerings of other custodians, as well as those of independent providers, by a significant margin. The existence of WealthCentral will pressure other custodians to match or exceed Fidelity's platform by offering a unified system of their own. This, in turn, could send shock waves throughout the advisor technology sector. As would the opening of the advisor sector to Apple computers for the first time.
Fidelity is still a year away from delivering a finished product, and, quite frankly, if WealthCentral were the work of a start-up firm, I'd be extremely skeptical; but it is not. Fidelity has an accomplished in-house technical staff and it has partnered with talented, experienced firms that are each among the leaders in their respective fields. With Fidelity's ample budget and the talent, the odds of it bringing WealthCentral to fruition are excellent. If and when it arrives, WealthCentral will surely disrupt the status quo, if it has not already done so.