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Having won advisor assets, Envestnet's next -- more Google-like -- play is for their smarts

The Chicago outsourcer will soak up and synthesize information from 23,000 advisors and distribute it in real time in an effort to create one big giant brain out of an atomized industry

Author Lisa Shidler May 10, 2013 at 5:40 PM
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Bill Crager: The content race will be on and we'll open up a whole new competitive landscape for asset management.

RIA Custodians

Stephen Winks

Stephen Winks

May 10, 2013 — 7:15 PM

Big data cuts both ways as it exposes cost, pricing and effectiveness in highly transparent ways.

The takeaway is there is a lot of fat to cut, less costly, more modern and far more effective approaches to portfolio construction and far higher margins to be achieved at the advisor level. (Brokers have no control over their margins, it is set by their supporting firm determined by its overhead.)

This will make brokers selling of investment products to include investment advice products seem antiquated to advisors addressing and managing investment and administrative values in the best intererst of the investing public.

Importantly, advisors and brokers alike become accountable for and have ongoing responsibilities for their recommendations—presently not possible in a brokerage format—the principle industry push back on supporting the fiduciary standing of brokers.

EnvestNet begs the question of whether any broker/dealer afford can afford to self select not to support the highest level of advisory services and the associated professional standing accorded to brokers fulfilling their fiduciary duties in the best interest of the investing public.

Big data greatly simplifies the business by requiring simplifing processes. It boils down to a very simple equation—how effective is each individual avisor in addressing and managing investment and administrative values in the consumer’s best interest.

Let’s hope that EnvestNet is not the only firm who wants to help brokers and advisors grow as professionals and accordingly build and grow their business. Right now, given the behavior of our largest brokerage wirehouses which historically have been insular to the best interest of the investing public, it looks like EnvestNet is beginning to pull away from the pack.


Pat Mulvey

Pat Mulvey

May 10, 2013 — 8:25 PM

Anyone familiar with the Trust Universe Comparison Service (TUCS) which Wilshire created back in the 1980’s? Technology today makes the communication more immediate but the idea was the same only directed to institutional assets- gather all this raw data like account size, asset allocation, returns for peer groups etc. (for TUCS from the Trust companies and for envestnet from the advisor)- clean the data, organize and analyze it and sell it back to the providers of the raw data for a fee. So, if you want to know the quartile rankings of say…equity exposure for account between 2-5M you can. Or if you want the exposure to passive strategies you can as well. TUCS was very successful and perhaps this will be as well. Surprised the custodians don’t do this.

Related Moves

February 28, 2024 at 3:36 AM

Envestnet shares popped -- up 8% today -- after Wall Street filtered out bad news and staked its bet on confidence in a new team

The Berwyn, Pa., firm sugar-coated nothing but ended up with a sweet stock price result as analysts see good outweighing bad.

February 24, 2024 at 3:33 AM

Bill Crager is dropping CEO role after multiple shoes dropped; the company insists it was his 'decision' but vision, Yodlee future uncertain

The co-founder of the $5.3-trillion AUA outsourcer of software and investments was pressed to take the job under the most adverse circumstances, then second-guessed by stakeholders as he managed the cards he was dealt.

January 9, 2024 at 4:09 AM

Bill Crager makes critical hire of 'step back from the numbers,' Joshua Warren, replacing 'brother' Pete D'Arrigo at CFO; Warren had a big role at BlackRock -- Envestnet's biggest stakeholder

The Envestnet CEO gets 'very, very impressive' 43 year-old BlackRock exec; the New York asset manager happens to be Envestnet's largest stakeholder.

September 27, 2023 at 2:48 AM

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