Envestnet looking to support breakaway advisers

New Quick Start program promises to onboard new RIAs on the Tamarac platform within 30 days

Mar 28, 2018 @ 6:45 am

By Ryan W. Neal

Envestnet Tamarac is getting into the business of supporting breakaway advisers.

On Wednesday, the company launched an offering it calls Quick Start that will get new registered investment advisers up and running on the Tamarac portfolio management software within 30 days.

Adopting a new portfolio management system usually takes a few months. Tamarac says Quick Start streamlines the collection and conversion of client historical data, often the most time- and labor-intensive part of the process, into a matter of days.

(More: Envestnet releases mobile Tamarac tool as tech conference opens)

Quick Start also saves time by digtizing much of the training that traditionally required in-person sessions.

Envestnet Tamarac president Stuart DePina said Quick Start is especially beneficial for firms like breakaways — brokers leaving wirehouses to form their own businesses — who need to achieve scale and establish business operations as quickly as possible.

"Breakaways are most vulnerable to external forces as they work to secure their business and build their operations," said Mr. DePina in a statement. "We've found that some firms initially gravitate toward half-measures, and believe they should wait to grow their business before implementing an integrated platform like Tamarac. But the research shows that firms that invest in scalable technology early in their growth are able to better competitively position themselves and streamline their operations during the critical formative stage."

(More: Echelon: RIA M&A slowdown not due to fewer breakaway advisers)

In addition to the portfolio management technology, Mr. DePina said Quick Start also provides access to the investment products offered by Envestnet for new firms to quickly offer clients separately managed accounts and alternatives without resorting to a workaround.

Mr. DePina said Quick Start has been successfully tested and implemented for multiple firms and can be used by RIAs of any size.

Some advisers are skeptical that such a complicated process can really be boiled down into a single month.

Jim DeCarlo, the CEO of Strategic Wealth Management Group, said even if a new firm doesn't have the challenge of converting from an old platform to a new one, it still has to bring over more than a decade of client data from a wirehouse's platform.

"It is a churning, laborious, deeply detailed process," Mr. DeCarlo said. The problem isn't just getting the data; the platform must accurately report on years of performance and averages.

Mr. DeCarlo said it would be a game-changer to compress the process into less than a month, but remains suspicious of the claim.

"It's neat to think we can get a seamless onboarding process, but until somebody shows me a Friday to Monday process, where you leave on Friday and are up and running on Monday, then I don't think we have a delta," he said.

Mr. DePina doesn't want to imply that Quick Start won't involve work for the breakaway adviser, but said it will limit effort involved.

Tamarac traditionally serves large RIAs, and breakaway firms are a new market for the technology vendor. Mr. DePina said Quick Start isn't meant to entice advisers to leave their current firm, but does position Tamarac to capitalize on the ongoing trend of brokers going independent.

"We've had a number of these firms knock on our door over the last couple of years, and we've said, 'We can't help you,'" Mr. DePina told InvestmentNews. "[Quick Start] puts us in a position to capture that part of the market."

Tamarac launches the new service as wirehouses are looking to plug the drain of assets from advisers going independent. Last year, both Morgan Stanley and UBS Financial Services exited the broker protocol agreement. Some have predicted this will backfire and drive increased breakaway activity.

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