Brooke’s Note: This is the first video published by RIABiz (see below). We wanted to start off with a bang by interviewing somebody who matters to a wide audience and to do it in a high quality way. When Marie Swift said that she would lend a video crew at T3 to interview executives, we decided to give it a go. See: RIAs flock to Dallas for the T3 technology conference. I was especially pleased that we were able to get Ed O’Brien, who oversees what may be the largest technology budget in the RIA business and a software ecosystem that reflects Fidelity’s ambitions and financial muscle. It was also essential that Tim Welsh, who appears to have spent a semester at broadcasting school, was at the ready in Dallas to deliver the questions.
When last we left off writing about WealthCentral in August of 2010, the RIA technology platform of Fidelity Institutional Wealth Services, it had about 600 users. There were 300 existing advisors that had converted from its legacy system, AdvisorChannel, and an additional 300 breakaways who started life as independents using the system. See: Fidelity Institutional and Black Diamond tie the knot through WealthCentral.
Coming on like blazes
Still, that represented only 20% of Fidelity’s 3,300 RIA clients — way behind the schedule Fidelity had set out for itself. At the time, Mike Durbin, president of FIWS, said that 2008-2009 market conditions slowed implementation efforts because RIA firms were preoccupied with serving clients.
Now the Boston-based custodian seems to have gathered steam and has 2,200 users on its system. More impressively, 650 of those firms are also using at least one of the third-party providers that Fidelity has integrated — mostly Advent, Black Diamond Performance Reporting, EISI (planning), Northfield Information Services (rebalancing) and Oracle (CRM).
The company is now at “some stage of integration” with a new roster of vendors including: SalesForce, AppCrown, LLC, Morningstar Office, Envestnet Asset Management and Redtail Technology. See: Fidelity is set to add Envestnet, Redtail, Morningstar, AppCrown and SalesForce to WealthCentral.
It is free to use WealthCentral as a basic access point to Fidelity, but the company charges for third-party technology. Though that technology has many price points depending on the practice size, the company offers a ballpark figure of $30,000 for a firm with about six associates, 300 accounts and $120 million of assets under management.
Challenges, internal and external
But Tim Welsh’s interview here with Ed O’Brien gives the viewer a very strong sense of the ground that WealthCentral has covered and some of its challenges, both internal and external. It has Schwab chasing after it with a CRM-based system and it has the realities of converting advisor data from one system to the next. There are allusions to both here. See: What Neesha Hathi has to say about Schwab’s oh-so-slow-but-steady technology initiative.
Edward O’Brien is head of technology for Fidelity Institutional Wealth Services and Fidelity Family Office Services, units of Fidelity Institutional, a suite of Fidelity Investments businesses that offers financial professionals and institutions access to the products, services and investments they need to service their clients and expand their businesses. Fidelity Investments is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and other financial products and services to more than 20 million individuals, institutions and financial intermediaries.
O’Brien assumed his current position in July 2009 and is responsible for overseeing division-wide technology strategy and development. He reports directly to Michael Durbin, president of Fidelity Institutional Wealth Services.
Prior to his current role, O’Brien acted as senior vice president, technology product management for IWS — responsible for the development and operations of Fidelity WealthCentral. He previously held numerous positions within Fidelity, including responsibility for the market data and pricing support group within Fidelity Systems Co. He was also responsible for the securities-lending group of Fidelity Service Co. In 1998, O’Brien left Fidelity to launch a business, AdvisorTech that successfully introduced a technology platform for financial advisors in Japan, South Korea and Germany. After spending nearly five years with AdvisorTech, O’Brien returned to Fidelity. He first joined Fidelity in 1986.
Timothy D. Welsh, CFP, is the president and founder of Nexus Strategy, a leading consulting firm to the wealth management industry and can be reached at email@example.com or on Twitter @NexusStrategy.