Envestnet sets up RIA for new embedded investment solution for financial institutions

New platform aims to help banks fight back against disruptive digital investment platforms.

Envestnet has launched a new embedded investment platform to empower banks and other financial institutions offer a more holistic service to their customers.

The firm has established an SEC-registered investment advisor called Envestnet Embedded Advisor to be the asset manager for the embedded financial solutions while investment accounts will be held at independent broker-dealer and custodian DriveWealth, LLC.

The new platform will power a digitized process for banks, credit unions, and financial advisors to offer investing solutions within their own apps and websites to customers within their existing banking experience, critical to staying competitive against the rise of fintechs and other digital investment offerings.

“Our data and analytics indicate that banks and credit unions are losing billions of dollars to digital investment platforms, as customers leave their banks to seek out these investing solutions,” said Dani Fava, Group Head of Product Innovation at Envestnet. “Envestnet is giving these entities a turnkey solution to help retain customers, by offering a seamless investing integration—so they can experience a more holistic financial experience with their current institution.”

Embedded investment and other financial solutions are seen as a key growth driver for financial services by being able to reach customers who may have traditionally not had access to the tools provided.

Envestnet’s new platform offers diversified portfolios invested in exchange-traded funds and optional thematic stocks. Financial institutions can retain deposits within their own ecosystem and serve smaller account sizes in a digital fashion.

INAUGURAL CLIENT

The firm has already secured its first client for the new offering, Central Trust Bank, headquartered in Jefferson City, Missouri, with locations throughout the Midwest.

Envestnet will recommend investment portfolios that meet the bank’s customers’ investment goals on Central’s new Digital Investor experience that integrates with its existing mobile and online banking platforms.

“Today’s consumers are looking beyond traditional banking products – even as they begin their financial journey. We’re excited to partner with Envestnet to empower our customers to optimize their finances directly within their banking app – while providing them access to the investment side of the house,” Dan Westhues, Executive Vice President & Chief Marketing Officer of Central Bank. “This will greatly streamline the user experience of our customers and ease the process of managing their personal finances, also providing them with thematic investing options through Envestnet.”