Envestnet Inc. has completed the integration of the HiddenLevers application into its unified wealth management platform, the firms announced last week.
HiddenLevers allows advisers to perform portfolio or security-level stress tests to measure their sensitivities to macro-level risk.
The application contains dozens of hypothetical macro-level risk formulas, such as oil shocks, global conflicts or large swings in gold prices, as well as correlations among more than one hundred economic indicators, industries and securities.
InvestmentNews first announced plans to integrate the application in May and the project was completed last week.
Bill Crager, president of Envestnet, was pleased with the speed of the integration process. The companies were able to take “HiddenLevers' tool set and map it with Envestnet's data in just one quarter,” he said.
While Mr. Crager had beeen familiar with HiddenLevers for years, he entertained the idea of adding the application to Envestnet's wealth management platform after a number of advisers mentioned the chance to improve their work flow. Underneath those suggestions, according to Mr. Crager, are the new realities of post-crisis finance.
“Markets have become so dynamic with serious risks everywhere,” he said. “These risks became more and more relevant after 2008 and 2009, and advisers are trying to answer, even anticipate, their clients' questions.”
A shortcoming in the application became apparent the day of the announcement. “I don't think there's a stress test for when the Nasdaq closes,” Mr. Crager joked.