Envestnet completes first stage of Finance Logix integration

Envestnet, a financial services technology provider, has made significant progress in the process of erasing the divide between its platform and that of Finance Logix, the financial planning software vendor that it acquired in May, in an effort to improve the level of user-friendliness for financial advisers.

The company recently announced that it had finished the first phase of the integration, which allows advisers to move back and forth between the two systems. With this bidirectional flow, advisers can use data from Envestnet’s platform, ENV 2, to create a financial plan in Finance Logix and then switch back to ENV 2 to create an investment strategy.

Next up will be taking the necessary steps to merge the two software platforms into one.

“It will be one piece of software,” said Bill Crager, president of Envestnet.

The third and final phase will be to distribute the integrated platform along with other Envestnet systems, including programs that advisers use in their home offices.

Envestnet has been aggressively pursuing acquisitions for the past seven-plus months. Not only did it acquire Finance Logix four months ago, but in February it also acquired robo-adviser Upside. Further, just last month, it acquired data aggregator and analytics provider Yodlee.

Envestnet has already integrated Upside fully into its digital portal, Advisor Now. The acquisition of Yodlee is still in the process of closing.

The advisory technology provider’s ultimate goal is to be the one-stop shop for advisers.

“It goes back to the life cycle of advice,” Mr. Crager said, adding that advisers want to be able to create a financial plan and an investment strategy simultaneously. “In the past, plans stop there, and advisers have to switch apps and begin anew on a new platform to achieve that plan.

“Now those two parts are seamlessly integrated,” he said.

Although the amount of work necessary to complete a post-acquisition integration always depends on a range of variables, the four months it took to mesh the two platforms is pretty short, said Joel Bruckenstein, the co-founder of the T3 Technology Tools for Today conferences.

It may be because Finance Logix is exactly what Envestnet needed to round out its suite of adviser-facing software and services.

“Envestnet needed that missing piece,” he said. “It is impressive they’ve been able to do what they’ve done and as fast as they’ve done it.”

The company has done well in bringing the deal makers together, said Mike Apker, managing director and executive vice president at Envestnet. He has seen it from both sides — he was chief executive of Oberon Financial Technologies before it was acquired by Envestnet in 2004.

“Envestnet has done, I feel, a good job of integrating both the people and the technology,” Mr. Apker said, adding that both pieces are equally important. The people from the acquired company should feel comfortable with the direction of the acquiring firm, while the combined technology platform should help to push the business forward from a competitive standpoint.

Regarding the software integration, advisers should proceed cautiously, however.

Lorraine Ell, the president and director of training at Excellat Consulting, said that there are almost always bugs in the beginning.

“Usually the bugs or the inconsistencies or the glitches tend to be worked out fairly quickly as people discover them,” Ms. Ell said. “It would be just a matter of doing test runs with the system before you totally rely on the fact that the data is accurate.

“My advice would be to slowly do some practice tests on any new software,” she said.