Envestnet acquires data-analytics and account-aggregation company Yodlee

This marks the wealth management software and service provider's third acquisition so far this year as it builds out its suite of tech offerings for advisers

Aug 10, 2015 @ 5:25 pm

By Alessandra Malito

Envestnet, the wealth management technology service provider, announced on Monday that it is acquiring Yodlee, a cloud-based data analytics company that provides account aggregation and various financial software.

Envestnet made the purchase of the Redwood Shores, Calif.-based company for $660 million in fully-diluted stock, at $18.88 per share, and $70 million in cash, for a total enterprise value of about $590 million.

It is the third acquisition that the firm has made this year alone, following online investment platform Upside in February and financial-planning software provider Finance Logix in May.

Envestnet's main goal driving all of these acquisitions is to provide a full suite of technology offerings for financial advisers.

Yodlee's financial software partners include Xignite and MoneyGuidePro. It claims five of the top 10 U.S. banks as clients.

"It's what has been missing," said Bill Crager, president of Envestnet. "We've got a very comprehensive wealth management and investment management platform, but we really haven't engaged at all in the consumer finance part of an investor's life."

With this acquisition, advisers' clients will be able to link their bank and credit card information to their advisers' platform so that there is a fuller picture of their net worth. By using the data then generated by the software, advisers will be able to gauge what investment strategies they should implement for their clients.

"Bank accounts and credit card information or mortgages have been separate from investment life," Mr. Crager said. "By acquiring Yodlee, we pull those pieces together in a very powerful way."

Envestnet, which has about $84 billion in assets under management and assets under administration combined according to its latest SEC filing, has approximately 41,000 advisers. Yodlee is the tenth company it has either acquired or with which it has struck a service agreement.

Data analytics will soon be the name of the game for advisers who want to get a leg up on the competition. Many have said it will lead the way to a greater perspective enabling more comprehensive financial planning.

Envestnet released its second-quarter earnings on Monday, jumping up 22% in revenue year-over-year to about $26 million.

Joel Bruckenstein, the founder of the Technology Tools for Today (T3) conferences, said the acquisition makes a lot of sense for Envestnet, as firms around the industry try to make their ways through data analytics and aggregation.

“They are all trying to make more data available to their clients and in a more usable form,” Mr. Bruckenstein said. “Data was available before but not in a format that the end adviser could consume and really make use of it.”

He said that there are many opportunities for Envestnet to grow its business with this acquisition, noting the significance of Yodlee teaming up with MoneyGuidePro last year.

0
Comments

What do you think?

View comments

Recommended for you

Related stories

Featured video

INTV

Has leaving the broker protocol worked?

Senior columnist Bruce Kelly and deputy editor Bob Hordt review the history of the protocol for broker recruiting, the shake-up in it a year ago and what's been the result for the two big firms leaving it: Morgan Stanley and UBS.

Latest news & opinion

Step one: Withdraw from the broker protocol

Pulling out of the protocol proved to be one part of multipronged strategies by Morgan Stanley and UBS to reduce broker attrition. So far, their plans seem to be working.

11 best islands in the world to retire to

International Living has come up with a list of affordable islands around the world.

SEC tests show investors don't understand disclosure form for brokers, advisers

Investor advocates: Agency still has a lot of work to do on Form CRS

Wells Fargo considering sale of retirement-plan unit

The business could fetch as much as $1 billion, sources say.

Employees can now save in a 401(k) by using a credit card

EvoShare provides workers with credit-card perks in the form of contributions to a retirement plan.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print