Advisers find Fidelity score card promotional

Intended to help planners assess their practices, evaluator is just a 'prospecting tool,' they say

Apr 19, 2009 @ 12:01 am

By Davis D. Janowski

Fidelity Investments has unveiled a free web-based score card for advisers that many early users have found wanting.

The Technology Bench-mark Evaluator, which enables advisers to compare their use of technology with competitors, appears to be Fidelity's response to Schwab Institutional's Technology Adoption Scorecard, which was introduced in July. The Schwab offering attracted 2,000 users.

Both platforms ask advisers to supply information about their assets under management, the number of employees and the degree of system integration. The Schwab system also asks about use of authentication cards, wire requests and online-account-opening practices.

Advisers' reaction to Fidelity's offering has been cool. "Referring to the Fidelity tool as a technology-evaluation tool is a misstatement," said Bedda D'Angelo, a certified financial planner and president of Fiduciary Solutions Inc., a Durham, N.C., firm that manages $24 million and uses Fidelity as a custodian. "It is a prospecting tool designed to identify advisers with [assets under management] that are not on the Fidelity platform already and designed to get them to buy into Fidelity's WealthCentral platform," she said. "I would really have to downgrade the services I currently deliver to clients to use WealthCentral," Ms. D'Angelo said. "What's more, I would spend more for the Fidelity versions of the software packages than I currently spend and get less for my money with a less robust version." The Fidelity tool offers "a pretty superficial assessment. It seems mostly like a marketing effort to position WealthCentral," Thomas C.B. Davison, a certified financial planner and principal with Summit Financial Strategies Inc. in Columbus, Ohio, wrote in an e-mail. "On the other hand, the topics addressed are large and complex, and any data collection that can be done in a short period of time must be superficial," he wrote. For instance, the tool doesn't distinguish between a customer relationship management system that merely records a client's name and address, and a system that captures more details. Moreover, Fidelity's offering asks about re-balancing but fails to differentiate between a firm that uses sophisticated portfolio re-balancing and a simple re-balancing model. "So the complexity or quality of the integration, information and results are left to the judgment of the participant," said Mr. Davison, whose firm uses Fidelity as a custodian. "It appears to do a very good job for the time required and level of information provided, but don't expect wonderful insights for your firm." Another adviser finds the lack of details frustrating. "I'd love to have a better sense of whether we are spending too much on hardware versus software, or financial planning versus our database, and the tool just doesn't get down to that level of detail," said H. Jude Boudreaux, director of financial planning at Bellingrath Wealth Management in New Orleans. He did learn, however, that the firm's technology spending of 3.5% of total revenue is in line with the 3% median. Fidelity spokesman Stephen Austin defended the Technology Benchmark Evaluator, saying it is intended to be an entrée into a discussion with Fidelity experts about effective practice management. "It's not intended to be a comprehensive tool," he said. "It is a jumping-off point based on research done by Moss Adams LLP," the Seattle consulting firm.


By contrast, a user of Schwab's tool praised its ability to let him compare the way he uses technology against other firms.

"One of the things I find most helpful about the score card is being able to gauge how other firms are using available technology," said John Chiacchiero, a principal of Oak Advisors LLC in Bluffton, S.C., which manages $100 million in assets.

For example, Mr. Chiacchiero said, the firm opens all its accounts online, "but we were surprised to see in the score card results that only about 25% of other advisers open their accounts online."

Some firms have other motivations for making use of the Schwab tool.

"Frankly, I've wanted to make use of many of these things so that we will have an audit trail, as much as anything," said Kim Carson, chief compliance officer with Holderness Investments Co. of Greensboro, N.C., which manages $90 million in assets.

"We have a small staff. There are just four of us, and we try to make as much use of the features [Schwab] offers us as we can," she said.


The offering helped her better understand the time savings realized from taking advantage of features such as online wire transfers.

San Francisco-based Schwab made Ms. Carson available for this article.

One adviser found Schwab's score card useful because it centralizes information and made planning easier.

The results are put into "a format that is useful for me in making a decision [about what to adopt] going forward," said Don DeSeranno, an adviser at DeSeranno Wealth Planning, a Grosse Pointe Farms, Mich., advisory firm with $100 million in assets under management.

"We found for the most part that we are ahead of the game in our use of Schwab's technology."

Schwab made Mr. DeSeranno available for this article.

One area where his firm lags, he found, is in deploying authentication cards.

"It's an additional layer of security," Mr. DeSeranno said. "You push a button on it that gives you a unique code that you use to log in with. They had just come out, but we weren't using them yet. We saw that 20% of firms were using them, and we weren't, so it called that to our attention."

E-mail Davis D. Janowski at


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