Fintech

Envestnet Tamarac expanding into wirehouses with Merrill partnership

The RIA technology will provide Merrill Private Wealth Management advisers with reporting on held-away assets.

Envestnet Tamarac is already immensely popular among registered investment advisers, but now the technology platform is going after bigger game in the wirehouse market.

Bank of America Merrill Lynch is bringing Tamarac’s performance reporting capabilities over to Merrill Private Wealth Management, a division serving ultra-high-net-worth clients.

Unlike the proprietary reporting technology that Merrill currently provides the 200 advisory teams in Private Wealth Management, Tamarac can pull together data from held-away accounts. This will help Merrill advisers provide better reporting on UHNW investors’ complex portfolios, which usually involve multiple financial institutions, said Don Plaus, the head of Merrill Private Wealth Management.

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“When you think about what it really does, it creates a single, comprehensive client report that gives overall asset allocation and performance regardless of where assets are held,” Mr. Plaus said.

In addition to reporting, Merrill PWM advisers will get improved portfolio analysis, interactive reports on performance metrics and a customized dashboard to view held-away assets. Tamarac’s capabilities will also enhance the data clients can view on their client portal.

While competing wirehouses have named growing their wallet share of held-away assets as a specific goal of new technology platforms. Mr. Plaus said the decision to bring on Tamarac had more to do with meeting client demands for more convenience.

“More so than anything else, it helps them organize around holdings that they have,” he said. “If we see underperformance [in held-away accounts], I’m sure that we would bring that to the surface, but that’s not what this is all about.”

Partnering with a technology like Tamarac could also provide wirehouses with more firepower to keep advisers from going independent, said Envestnet Tamarac executive managing director Andina Anderson.

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“There is a growing risk today of captive advisers breaking away,” Ms. Anderson said. “Merrill Lynch and others are looking for ways to keep advisers and end investors happy by providing that holistic view, the full financial picture that they are looking for.”

Bank of America and Merrill Lynch are already Envestnet clients that use Yodlee as a data aggregation portal and Finance Logix for financial planning. But the new partnership represents a significant opportunity for Envestnet to expand in the bank’s wealth management division. Ms. Anderson declined to provide specifics on the deal but noted that Merrill is Tamarac’s largest client to date, and its first wirehouse.

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According to Tamarac’s website, the technology serves 1,000 RIA firms that collectively manage $1.2 trillion in assets. Merrill Lynch manages more than $2.4 trillion.

Merrill is only rolling out Tamarac to PWM advisers for now, but the companies did not rule out the possibility of Merrill’s providing Tamarac to more of its advisers or using more of Tamarac’s capabilities beyond reporting.

“It’s not something anymore that [wirehouses] can just be OK with sending out quarterly reports,” Ms. Anderson said. “They have to look beyond what advisers have had to accept in the past because they have other options now and they will leave if [wirehouses] can’t provide that competitive advantage.”

Ms. Anderson isn’t worried that Tamarac’s existing client base of RIAs will feel as if the company’s focus is shifting. If anything, the work Tamarac is doing for Merrill will improve the product for RIAs, she said, especially when it comes to security.

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“Adviser needs are pretty similar, whether they are at a large shop or a small shop,” Ms. Anderson said. “I think we’ve done a pretty good job with communicating with our clients that we have a focus across the market.”