Fidelity announced their new WealthCentral platform by placing billboard ads throughout Las Vegas this week, during the Schwab IMPACT conference. Ballsy move — I love it.

WealthCentral combines portfolio management, customer relationship management, financial planning and other applications on a single platform. It doesn’t actually exist yet, but Fidelity plans to spend $50 million developing it. The software will replace Advisor Channel.

This an interesting move by Fidelity. They’re obviously under pressure to compete with Schwab’s Portfolio Center offering which is getting more and more popular. But instead of building all the components in-house (like Schwab), they’re tying together several best-of-breed products. That’s a tricky proposition — one vendor’s integrated best-of-breed platform is another’s Frankenstein monster.

Fidelity’s platform partners are:

• Financial Planning: NaviPlan
• Portfolio Management: Advent APX
• CRM: Siebel
• Trading: ???

Fidelity hasn’t determined pricing for the platform yet but it will be account-based. Knowing what their partner vendors charge, I’m guessing it will be expensive.

This is a great idea, but I have two implementation concerns:

Concern #1 - Integration

I know something about integrating back office applications. Tying together different packages is tough and I think Fidelity will have a hard time making the integration seamless. Each one of those apps is designed to run on its own database so the problem lies in making the web sites flow seamlessly back and forth.

I’ll assume we’re talking about some sort of framework that lets users switch seamlessly back and forth between the different apps. Writing their own UI that pulls information from different databases onto one screen isn’t a realistic option. So how will the data flow between systems? Siebel has hooks into the database but Advent and NaviPlan are designed to send information in a daily-batch mode. When I change a client address in NaviPlan, how long will it take until the changes are reflected in the other packages? When will new transactions in Advent be reflected in the NaviPlan values?

If the answer to either of those questions is not “instantaneously”, then the integrated platform becomes less compelling.

Concern #2 - Pricing

From the Investment News article:

John W. “Jack” Callahan, president of Fidelity Institutional Wealth Services said “We’re basically going to take our Advisor Channel platform and replace it.” Pricing for the platform is still being determined.

Ok… so you’re replacing a free platform with an expensive one? That math doesn’t work for me. I guess Fidelity could always change their mind and continue to offer Advisor Channel for free. Or maybe they could offer a free version of WealthCentral, but I assume their third-party vendors would want to be paid regardless.

…

This will be an interesting project to watch. I have a lot of respect for the Fidelity guys; they know what they’re doing. But I also know a bit about software and this is a tricky project to pull off, $50 million budget or not.

I’m also curious about Fidelity’s relationship with IAS Software. IAS was supposedly Fidelity’s software partner and was going to provide much of this functionality. What happened? Well, IAS went bankrupt a while back and was bought by a VC company. I know that Fidelity thinks the VC company ran IAS into the ground and doesn’t want anything to do with them now. Fair enough, but it doesn’t mesh with some of the good things I’ve been hearing about IAS lately. I’m planning on doing another post on that soon — I’ll get to the bottom of it.

Here’s the good news. If Fidelity *does* pull this off, it will change the industry. They’ll have a true best-of-breed silver-bullet app, and the rest of the industry will be scrambling to catch up. I’m keeping my fingers crossed.