Page 15 - Investment Advisor - December 2021

problematic history in trying to deliver a and benefit from the latest enhancements petitive wedge, and again, attempt to
silver-bullet solution. they could quickly and nimbly deliver. control the advisor desktop.
It all started back in 2007 when While Fidelity’s technology efforts While this looks great on PowerPoint,
Fidelity made the first attempt to bun- were percolating, Schwab, often late to it fails to recognize the underlying tenets
dle a tech stack with the WealthCentral the tech game, was launching “Project of the RIA marketplace. Advisors are
initiative. WealthCentral initially was C” in 2009, another CRM, planning and independent for a reason and want their
launched with much hype as a, “new, portfolio management system bundle technology to be independent as well.
integrated, web-based wealth man- featuring Salesforce as its hub. Again, Additionally, most, if not all RIAs,
agement platform that would inte- launched with much fanfare as “intelli- work with multiple custodians and
grate key RIA operational systems gent integration,” Schwab would become always will need a middleware solution
such CRM, portfolio management a Salesforce reseller via the bundle. that is independent of any one cus-
and financial planning, along with History was not kind to the tech todian. Despite the claims that these
the capabilities of Fidelity’s current execs at Schwab, however, as Project C custodian technology platforms will be
Advisor Channel platform, “multi-custodian,” in reality that
melding them into one hosted In this “Squid Game,” who is never the case. It also defeats
unified workstation that can be the whole strategic point, as
accessed through a web brows- has the most to gain or they only make money on assets
er,” as described at the time by lose? Currently, legacy RIA on their platform, why provide
tech guru Joel Bruckenstein technology that makes it easy to
in Financial Advisor. Fidelity custodians are benefitting diversify away?
promised it would be spending the most from the success and Ultimately, the only custodian
$50 million, representing “the technology integration strategy
single largest investment we growth of RIAs as they extract that actually worked was TD
have ever made in the indepen- Ameritrade’s Veo, which was
dent RIA business.” their two-way basis points in true open architecture, provid-
WealthCentral had a little their dual roles as custodian ing advisors with choice and
pickup in its early years as most flexibility as to the software they
advisors already had their own and product distributor. wanted to use that would work
CRM and planning tools, and well with TDA. This technolo-
while impressed with the integration, came crashing down just six years later, gy-friendly approach for both advisors
wanted to immediately unbundle it and saddled with low adoption and soaring and the advisor tech community result-
layer in their current systems instead. costs. In fact, Schwab abandoned the ed in making TDA the fastest-growing
Because of this false start, Fidelity re- project in 2016, orphaning 150 RIA firms custodian as a result.
branded WealthCentral as WealthScape who actually bought the bundle, as well Sadly, TDA’s vision of a “digital eco-
and went back into the bundling waters, as leaving them to fend for themselves system” with Veo will be snuffed out by
after acquiring eMoney, with its next iter- and to rebuild their tech stacks from Schwab as they shut it down and move
ation called the “Total Advisor Platform,” scratch, with nary a refund nor apology. everyone back to Schwab’s systems
which again was announced with much through the acquisition of TDA.
hype in 2016. TAP would be “a single CHALLENGES CONTINUE While I’m sure the industry wishes
technology platform to access Fidelity’s In the final analysis, these custodian Pershing well on their Pershing X strategy,
proprietary tools, third-party vendors technology initiatives will always be history has shown that the custodians might
and data from multiple custodians.” challenged by default because all are want to think about sharpening their jousts
Fidelity spent more than $1 billion based on a proprietary technology a bit more before starting on this familiar,
on TAP, but advisors were reluctant to strategy designed to aggregate an advi- yet quixotic technology journey.
purchase technology from their custo- sor’s business on the sponsoring custo-
dian. They still relied on their third- dian’s platform. This is why they only Timothy D. Welsh, CFP, is president, CEO and
party software solutions, which created work with that custodian’s accounts founder of Nexus Strategy, LLC, a consulting
Adobe Stock community as these independent soft- attempting to lure business through firm to the wealth management industry and
and data. It is a popular strategy for
a renaissance in the advisor technology
can be reached at [email protected] or
their technology pipes, build a com-
ware providers continued to innovate
on Twitter @NexusStrategy.
DECEMBER 2021 INVESTMENT ADVISOR 13