What's next? It's a universal question. But probably no more widely asked than in the context of technological innovation. Indeed, we, as a civilization, are enamored with technology-just think about all the smartphones, e-readers and tablets (particularly Apple iPads) that were on your family's wish list last holiday season.
However, for financial advisors, "What's next?" is becoming a strategically important question as the industry demands greater business efficiency and smarter ways to compete. Many are turning to broker-dealers and custodians for technology answers. And, as Joel Bruckenstein reported in December's issue, those firms appear ready. "Broker-dealers and custodians are realizing that better technology can free up advisors to spend more time attracting new clients and servicing existing ones," Bruckenstein says. "As a result, virtually all firms with custody of advisor assets have technology initiatives designed to help their advisors run more efficient, profitable practices."
Indeed, firms that service advisors appear to be escalating what's fast becoming a technology arms race. Last summer, Bruckenstein detailed the plans of Schwab Advisor Services to deliver high-quality, integrated solutions to financial planners. In this issue, he provides a rare look inside the development lab at Fidelity-the Fidelity Center for Applied Technology (FCAT) [see "The Lab," page 54]. Fidelity spends some $2 billion a year on technology, and many insiders believe it gives the company an edge over its competitors.
Located in Boston, FCAT looks just like you'd expect a high-tech lab to look-open spaces; soft, cool lighting; huge wall-mounted monitors; and, of course, cool gadgets. But as futuristic as the lab appears, its mission is to determine which new technologies will boost Fidelity and its customers in the near term-the next 18 months.
Launched in 1999, FCAT has already been instrumental in a number of developments at Fidelity, and the lab is deeply involved in updating Streetscape, Fidelity's online brokerage technology platform, which delivers market data, news, research and trading functionality to investment advisors. The new version is designed to be more powerful and easier to use. For instance, Bruckenstein notes, information that once required four-page views has been consolidated on a single page.
Going forward, FCAT is focusing on three areas that Bruckenstein says could open up new technology fronts: cloud computing, mobile computing and social media. FCAT is looking at how "the cloud" could be used to improve business performance and lower costs-such as in the use of cloud-based data storage services. On the mobile front, FCAT is contributing to the development of iPhone and iPad applications and, Bruckenstein notes, it's widely expected that Fidelity will soon introduce mobility apps for advisors. And FCAT is actively looking at the implications of social media in the financial planning space.
"FCAT's role with regard to technology will continue to expand," Bruckenstein says. Other firms will keep pace. The technology arms race will continue. And that's good news for hard-pressed advisors looking out for "what's next."
John McCormick, editorial director
