Fidelity Institutional Wealth Services announced a cloud-based virtual desktop offering for financial advisers today — the first of the four major custodians to do so.
It will become generally available to financial advisers custodying with Fidelity IWS in July and should allow advisers to run their offices without the need for maintaining their own local software.
While not available generally until July, Fidelity has enlisted a handful of advisers to work with them in pre-production testing during the remainder of the development process.
The offering combines the Fidelity IWS WealthCentral platform, already in use with 3,200 firms, and adds a variety of office productivity applications including the full suite of Microsoft Office, among other software.
“This is a natural progression on our roadmap,” said Edward O'Brien, head of RIA and family office technology at Fidelity IWS. “We envision it as a place advisers can go to get everything they need to run their businesses.”
Fidelity IWS is not hosting the offering itself, rather it has partnered with cloud outsourcing company External IT. The entire offering will be available via a single sign-on over the Internet.
Part of the deal Fidelity IWS has made ensures that advisers will have dedicated External IT support personnel as well.
In addition, advisers will have unlimited replicated email storage, replicated file storage (meaning both backed up at a second facility), mobile device support and software updates, antivirus, patching, asset inventory and remote support included in the package.
“Advisers tell us they have legacy technology that they have to manage outside WealthCentral including things like file servers and e-mail servers etc. This offering will let them get rid of all that legacy technology and provide them access to their desktops anywhere,” Mr. O'Brien said.
The cloud offering will also have a central document repository, and hosted Microsoft Exchange e-mail will be an option. Perhaps more intriguing will be the potential for advisers to have their other legacy technology also hosted by Extenal IT. This could include, for example, their Junxure CRM or normally on-premises hosted financial planning software.
Through Fidelity's arrangement with External IT, advisers will have the opportunity to contract directly with External IT for the provisioning of bundled or customized services at a discounted rate.
Pricing for this al a carte hosting has not been worked out, but the overall cloud offering will be available on a subscription-based pricing model. Mr. O'Brien said that a preliminary target of around $150 per user per month or around $1,800 per year was likely.
With the new offering it will be simple for advisory firms to add temporary users as well (for example, summer interns or contract workers), and firms will only pay for the applications they need — and monthly for as long as they need them.
Another point advisers will probably like: no upfront cost for the cloud offering, a common practice that is often part of migrations or installation of new systems.
For those in need of a refresher, the WealthCentral platform was announced in 2007 and delivered in 2009 as an online offering for advisers, and was made up of several core advisory applications. The initial offering included Advent APX for portfolio management and accounting capabilities (from Advent Software Inc.), Naviplan financial planning software (now owned by Zywave) and Siebel On Demand customer relationship management software. Additional offerings have since been added — among the latest is the popular CRM package of Redtail Technologies. Salesforce CRM is also slated to be added to the platform by late summer.
“This will include workflow integrations and workflow with real time data, but advisers using Salesforce can right now get data feeds from Fidelity,” Mr. O'Brien said.
For now, other applications that will be available on the cloud offering will include the Adobe Reader X (from Adobe Systems Inc.), Microsoft Access 2010, Publisher 2010 and SynToy programs (for synchronizing files that have been edited off-network), and Quickbooks Pro 2012 (from Intuit Inc.).
According to recent Fidelity research cited in today's prepared statement, operational, technology and back-office support was ranked as the top support need for advisers considering a switch to an existing or new independent firm.
According to recent Fidelity user group data, 39% of advisers currently employ some form of cloud computing and 76% plan to store more than 50% of their documents in a cloud environment within five years.
In our own 2013
InvestmentNews Adviser Technology Study we found that 63% of 331 responding firms were already using some form of cloud computing.
Another finding from Fidelity was that 48% of advisers chose "gaining workflow efficiencies from cloud computing" as their top tech goal.
Fidelity's Mr. O'Brien added that the economies of scale Fidelity IWS can achieve in their negotiations for technology hosting are at a level most independent advisers are simply not going to be able to attain on their own.
“We feel that every dollar of investment [in technology] should make their offices more efficient and help them work more effectively with clients," Mr. O'Brien said. "Advisers paying for an additional consultant or hiring someone to come in and run IT are probably not the best use of their budgets.”
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