RIABiz

News, Vision & Voice for the Advisory Community

RIABiz

Envestnet acquires Finance Logix on heels of Upside

The Chicago outsourcing behemoth seeks to unify investment planning and financial planning

Author Brooke Southall May 6, 2015 at 9:57 PM
Admin:
no description available
Oleg Tishkevich will join Envestnet as financial planning chief.

Math

Math

May 6, 2015 — 10:47 PM

Upfront: – $24 million cash (you missed this # entirely in the first version of your article) – $52.67 × 123,410 ENV shares = $6.5 million stock consideration – 123,410 ENV options with a $52.67 strike price, 10 year expiration = ~$3-3.5 million option value depending on your Black Scholes inputs
Therefore total upfront value = ~$33.5-34 million

PLUS cash, stock, and options in earnouts over 3 years.

BMu(sed)

BMu(sed)

May 6, 2015 — 11:16 PM

Interesting development…seems every existing financial intermediary and their brother will have a “robo-advisor” of their very own in the not too distant future.

Unfortunately, the longer-term opportunity is not in supporting the advisor channel – it’s in going direct to consumer with a new, differentiated brand that stands for something different. And that means the Envestnets, Fidelitys, Schwabs technology offerings will remain at a disadvantage.

The sad fact of the matter is that the current lineup of financial intermediaries has failed their clientele…no number of acquisitions will change that. What’s needed are new brands and that’s what the next wave is building out.

FWIW, regardless of how one wants to slice it the days of advisors charging and ongoing 100 bps/yr. are numbered. That model’s changing. Check back in 5 years and tell me I was wrong…;-)

Investor1

Investor1

May 7, 2015 — 1:59 PM

BMu I agree with parts of your comments. The advisors that manage clients with assets of $250k or less that are fee only should have dumped these clients long ago. They are not profitable to any advisory business, therefore you have these robo-advisors. This is for the mass affluent, small investors that never had easy access to investing.

Investors with at least $500k or more and they have the need and want for professional advice that includes financial planning, estate planning, tax planning, trusts, etc will always turn to an advisor or consultant. The advisors that have books filled with smaller clients, well like your said, check back in 5 years!

BMu(sed)

BMu(sed)

May 7, 2015 — 9:55 PM

Investor1 – keep telling yourself that.

Each of the items you pointed out can be better addressed in an automated fashion. Financial planning – wouldn’t a service like Mint be much better suited towards laying out likely forecasts of expenses? wouldn’t it be much easier to automatically update your financial plan online using all your financial documents delivered through Yodlee? Estate planning, tax planning, etc. will also get gobbled up…that’s just the way its going friends.

Of course, two years from now it will be obvious that the $500k clients are better suited to automation but the $1MM + clients that are “safe to advisors”.

Anyways, enough of that. Best wishes to all.

Den

Den

February 28, 2018 — 6:40 AM
Hello! You can use our professional web design services to improve your online business and website conversions. 8+ years of successful work, reasonable pricing. Please, confirm the request to find out more.

Related Moves

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

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 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

Bill Crager shuffles the deck on management team created just seven months ago: Tony Leal is out of 'Big Three' inner circle, replaced by Morgan Stanley vet Rose Palazzo

The RIA software 'trailblazer' and co-founder of MoneyGuidePro has been working on departure for a year; will transition to a 'consultant,' company says

January 7, 2023 at 1:50 AM

See more related moves

Mentioned in this article:

Envestnet Inc
TAMP
Top Executive: Jud Bergman

Upside
TAMP
Top Executive: Tom Kimberly



RIABiz Directory

The Industry Sourcebook for RIAs

   |    LISTING


RIABiz Directory sponsored by:

Directory Sponsor Logo