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.

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