Fidelity to spend $50M on platform for advisers

Hoping to steal the thunder from archrival Charles Schwab & Co. Inc.'s annual gathering of advisers this week, Fidelity Investments last week unveiled plans to spend $50 million to develop a wealth management technology platform aimed at advisers. As if that weren't enough to get advisers' attention, the Boston-based fund giant intends to promote its plans this week on billboards scattered throughout Las Vegas McCarran International Airport, where thousands of advisers will pass en route to IMPACT 2007, San Francisco-based Schwab's national adviser conference in that city. The web-based platform, WealthCentral, won't be available to advisers until late 2008. By combining portfolio management, customer relationship management, financial planning and custodial-transaction applications on a single platform, the technology will eliminate the need for advisers to use multiple systems that might be incompatible with one another or difficult to manage in terms of moving data be-tween them. The technology, which Fidelity has been developing for the past 18 months, will allow advisers to sign in once and manage nearly every aspect of their client relationship. Because the applications are integrated, it will eliminate the need for advisers to update information from one application to another — thus saving time and reducing the likelihood of errors made during the data entry process.
The project's $50 million price tag "represents the single largest investment we have ever made in the independent-adviser business," said John W. "Jack" Callahan, president of Fidelity Institutional Wealth Services. "We're basically going to take our Advisor Channel platform and replace it," he said. That's no small task, and the integration of multiple technologies on a single platform raises the stakes for Fidelity in terms of making sure that platform contains no glitches and that it is as impervious to hackers as possible. Linsco/Private Ledger Corp. of Boston and San Diego earned the wrath of the 7,000 representatives on its main platform in September when a technical failure prevented them from gaining online access to client accounts for three days. The same month, TD Ameritrade Holding Corp. of Omaha, Neb., revealed that a hacker had stolen personal client information from its systems. "We feel comfortable that we can provide a secure environment for our advisers," Mr. Callahan said. Any information stored on Fidelity's platform will remain private and not used in any way by Fidelity, he added. "The information will be private — no ifs, ands or buts about it," Mr. Callahan said. "We could never do anything with that information. If it got out, it would ruin our business." By and large, advisers applauded Fidelity's efforts. Fidelity's new platform will "only continue down the path to more- interconnected solutions for advisers," said Russ Thornton, a fee-only registered investment adviser and owner of Thornton Wealth Management LLC in Atlanta. Mr. Thornton, who does not have assets in custody at Fidelity, understands well the need for technology integration. He currently uses a variety of disparate online applications for portfolio management and reporting. "They all play well together regarding data flow and avoiding multiple data entry issues, but it's not perfect," said Mr. Thornton, whose firm oversees $19 million. Robert Ellis, a senior analyst with Celent Communications LLC of Boston, seems to share Mr. Thornton's views of what the platform represents. "It makes a lot of sense," he said. "What they've really done is taken the functionality of the old Advisor Channel and tried to create better efficiencies for advisers so they can spend more time building their book of business." "This new system is all about providing a single point of contact for the adviser," Mr. Callahan said. Specifically, the platform will integrate NaviPlan financial planning software from Emerging Information Systems Inc. of Winnipeg, Manitoba, Advent Portfolio Exchange (via Advent Back Office Service) from Advent Software Inc. in San Francisco and Siebel On Demand CRM software from Redwood City, Calif.-based Oracle Corp. While pricing for the platform is still being determined, it will follow an account-based model. "The key here is that their approach is right — they talked to the end user," said Ravi Dattani, a fee-only adviser and partner in Schiavi + Dattani in Wilmington, Del. Mr. Dattani, who has been on Fidelity's adviser steering committee for the past year and custodies most of his firm's $250 million in assets at the company, remains undecided about whether he will adopt the new platform. "Right now, everything is on the table," he said. "The pain associated with taking your data and putting it into another system is great. So ultimately, when the time comes, and we see the sum of the parts and can weigh what we'd give up — if anything — that's when we'll make our decision." Davis D. Janowski can be reached at djanowski@crain.com. "We're basically going to take our Advisor Channel platform and replace it."

John "Jack" Callahan

President Fidelity Institutional Wealth -Services