Envestnet shows advisers how its purchases create integrated adviser ecosystem

The 2019 Envestnet Advisor Summit was lighter on splashy headlines than previous years, but the fintech giant used the conference to flex its muscles and show how its many moves and acquisitions in recent years are coming together for advisers.

While last year brought new Tamarac features and the launch of the Insurance Exchange, the most significant new product this year, Advisor Analytics, was an extension of the Yodlee-powered artificial intelligence apps that the firm announced in 2018.

Envestnet did announce that its half-billion-dollar purchase of MoneyGuide, announced in March, officially closed in the early hours before Wednesday’s opening keynote.

The Envestnet conference was not a dull affair for the 2,500 Envestnet clients, partners and shareholders gathered in Austin, Tex. It was the largest Envestnet conference to-date and the turnkey asset management platform used the opportunity to illustrate the fruits of its many technology firm purchases and other deals in recent years, including MoneyGuide, Schwab’s Portfolio Center, Finance Logix, and Yodlee.

“I think what we are seeing is all of these pieces they spent all these years building, buying and aggregating are coming to bear,” said Gavin Spitzner, president of Wealth Consulting Partners.

How Envestnet’s deal with MoneyGuide and others will put usable data in advisers’ hands

Envestnet CEO and chairman Jud Bergman said he’s thrilled to be showing advisers what this ecosystem is going to look like and how the end goal of creating “financial wellness” for consumers will come to be. In other words, now that the company has all of the necessary pieces, it’s less about introducing new capabilities and features, it’s about tying them all together.

“Today, that means cloud-based access to an ecosystem that allows for planning and budgeting, saving and spending, protecting capital and legacy, and managing credit,” Mr. Bergman told InvestmentNews.

Data is making it all possible. Envestnet Yodlee now aggregates information from 400 million accounts, but Stuart DePina, chief executive of Envestnet Data & Analytics, said his team is working on improving the quality of the data of aggregated investment accounts.

Envestnet is also investing $125 million towards making the data more useful for advisers in two key areas, Mr. DePina said.

The first is giving advisers access to information that helps them engage with clients. Beyond aggregating held-away assets to enhance client portals and financial planning, Yodlee can also access clients’ day-to-spending. Mr. DePina demonstrated how advisers can use this data to offer help with budgeting and saving.

(More:​ Envestnet launches tools to help improve adviser decisions)

Frank Coates, executive managing director of Envestnet Yodlee, expanded on the idea.

“I want to be able to tell you if you’re financially well or not,” Mr. Coates said. “Just like stepping on a scale and seeing you need to lose 10 pounds and get back to the gym.”

The other value of data is helping advisers manage their practices with benchmarking and RIA Pulse, a curated feed of information about the RIA market.

For business owners like Mr. Spitzner, this is extremely valuable.

“It comes into play with potential success planning, knowing where I am in terms of revenue, profitability and technology spend,” Mr. Spitzner said. “As an acquirer, having those benchmark figures are critical.”

Envestnet isn’t just buying up other technologies. In November, it announced a deal with BlackRock, where the asset manager secured a $122.8 million stake in Envestnet.

The whole industry is catching on to the power of data, said Bill Crager, Envestnet Wealth Solutions CEO, in pointing out the importance of the deal.

How the Envestnet – Blackrock partnership will help advisers construct better portfolios

As fintech becomes increasingly important for distribution, it was important for BlackRock to have “skin in the game,” said Rob Goldstein, chief operating officer & global head of BlackRock Solutions.

“We have the scale where we can put our money where our mouth is,” he said during a keynote presentation. “What we’re going to do together is figure out how to make it as seamless as simple, as few clicks as possible. How do we get as close to an iPhone experience to serve your customers as possible?”

The companies also revealed a bit about what that will look like in Envestnet’s product roadmap. BlackRock showed how it could integrate iRetire and Advisor Center into Envestnet’s proposal generator and financial planning.

Envestnet also gave advisers a look at other projects it has coming soon, such as the lending platform Credit Exchange and the annuities solution, Insurance Exchange. Envestnet director of solutions and engagement management Danny Hamer said the team wanted to show how it’s all coming together in a tangible way for advisers and their clients.

Finally, Envestnet showed off what it calls “the office of the future.” Using extra-large touchscreens from Dell (which advisers at the conference could purchase at a discount), Edmond Walters demonstrated the interactive estate planning software he’s developing at Apprise Labs.

“We used to build technologies for advisers to use,” said Blake Wood, Envestnet director of product strategy. “You’ve got to build technologies for advisers and clients to use together. That’s a big thing Apprise is focused on, that MoneyGuide is focused on, and that we are focused.”