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Build Your Own

Last month Fidelity announced the opening of its Wealthscape Integration Xchange. The Xchange is an open market “digital store” designed to make it easy for Fidelity’s clearing and custody clients to assemble the best technology solutions for their practices.

The Xchange leverages Fidelity’s integrations with over 100 third-party technology vendors. These include such well-known providers as Black Diamond, Orion, Envestnet Tamarac, Junxure, Redtail and SS&C as well as a broad selection of supporting technologies. Along with access to these platforms, Fidelity offers an array of capabilities to facilitate integration and data communication across solutions.

The Fidelity Xchange is the latest evidence of leading custodians’ acceptance of the value of an open architecture approach to advisor technology. Schwab too has recently come to recognize the limitations of its Portfolio Connect platform and has promised to double its current technology integration by the end of next year. First on the block, TD Ameritrade made the move to open architecture a few years ago with its VEO platform.

We expect that the move to open architecture technology approaches in general will continue for several reasons:

1. Advisor technologies are being developed at a rapid rate making it difficult for any single developer to keep pace with the state-of-the-art solutions across all platform functions.

2. As advisors use an expanding array of technologies, vendors are being forced to facilitate integrations to meet market demand.

3. Advisor technologies are expanding beyond portfolio management to CRM, planning, and digital client communications, again putting strain on traditional solutions to provide the fullest range of leading-edge available functionality.