News, Vision & Voice for the Advisory Community


Jud Bergman defies advisor feedback as Envestnet stares down the barrel of change

The Envestnet chief executive invokes railroad pioneers to explain why he is erring on the side of the theoretical over hard feedback

Author Lisa Shidler May 7, 2015 at 8:31 PM
no description available
Jud Bergman: They all tell me that their clients don't want it.








Stephen Winks

Stephen Winks

May 8, 2015 — 12:59 AM

It is not a question of whether RIAs will embrace “robo advice”. It is a question of how the individual advisor will provide continuous comprehensive counsel for hundreds of accounts at a lower cost than a packaged product and achieve higher gross revenues and margins at the advisor level. The advisory services industry is being redefined. The casualty is high cost packaged products where real time holdings data is not possible and the product itself cannot be individualized at the client level. Professional standing (based on non-negotiable fiduciary criteria cited in statute) requires real time holdings data for the continuous, comprehensive counsel required for fiduciary duty. The broker does not have a mechanism that facilitates and monitors a recommendation in the context of all a client’s holdings in real time. Highly desirable and elusive scale, margins and expert professional standing by market segment served, not possible to achieve in a brokerage format or in the typical individual advisory practice. This will become essential to compete and win market share thus the reordering of the industry. Broker/dealers will try to respond but they are only as good as their advisors who have inadequate support.

Jud Bergman and EnvestNet have everything to gain by advancing innovation as enterprising advisors will have a far superior value proposition at a lower cost and far higher margins at the advisor level. This requires EnvestNet to deliver a new, more modern approach to portfolio construction not including expensive packaged products. EnvestNet will win massive market share from high cost low value added brokers through advancing (1) expert authenticated prudent investment process, (2) advanced technology (to include today’s disjointed commoditized robo advice) and (3) work flow management which make expert fiduciary counsel (advice) safe, scalable, easy to execute and manage as a high margin business (at the advisor level).

It is a wonderful time for enterprising advisors to be in the advisory services business. EnvestNet , Orion and a few others have an open field before them and it is ok by them that everyone doesn’t get it as the early adopters will own the industry.

There has never been an instance in a free market since Adam Smith introduced the “invisible hand” in 1776 that the best interest of the consumer did not prevail. Let’s see if RIAs can embrace the best interest of the investing public and deliver an unprecedented level of investment and administrative counsel made possible though prudent process, work flow management and advanced technology.

Stephen Winks

Pete Giza

Pete Giza

May 8, 2015 — 6:05 AM


I am amazed at the level of discussion over something so basic as a portal. I get the fact we’re talking robo-scope but it still amazes me that firms are still arguing “my clients don’t want a portal”. Its more like “I don’t want to deal with it”. It is one of the many reasons firms look to the Orions and Tamarac. They desire the “one platform nirvana”.

The portal issue has become an ever increasing topic of conversation for us here at WealthSite. UHNW clients may want something as simple as a quarterly report and a doc vault, while others want to see everything in as close to real time as possible.

Automation of work flows E.g. selling, marketing, researching, advising, accounting, planning, reporting, rebalancing, trading, recon, etc., is a formidable task but not an insurmountable one.

Vendors are embracing innovation as their secret weapon. Innovation comes from within so it’s a visceral and many times painful process. It takes real courage and willingness to take risks that could erode a core product.

However the payoffs can be big. In the end it is the innovators that take the lead and usually by leaps and bounds. Taking a hard look inwardly can reap large rewards.

The “Robo movement” like the “Maker movement” is the power of innovation at work. The Maker is innovating on an age old American desire to Make and deliver a product in a highly streamlined paradigm.

Everything a robo does has to be innovative. The market they are trying to attract and serve demands them to be innovative or face a fire sale or complete demise.

The seeds to innovation are as likely to come from outside stimuli as they are spending time brainstorming around a whiteboard. For example, over the past twelve months WealthSite has been striving to innovate within the confines of our featureful platform. Ideas came and went.

It took outside stimuli, a demonstrable client need, and a target to focus our innovative creative talents on. This focus led WealthSite to a ground breaking innovation that is global in scope in its impact on the world of private asset management and reporting.

It has been stated many times that firms should embrace the idea of the robo as a potential partner in the future.

Firms must learn to think innovatively. They need to find ways to exploit the robo when and where possible. And if not directly, then through emulation. Be serious about it. Listen to outside stimuli. Filter out the industry hype and build upon those nuggets of innovative stimuli. Listen to your clients, assess their need, filter some more, listen again, filter again, act.

Time will demonstrate the value of this and what appears to be but one of many acquisitions coming it way in 2015.

Common acquisitions are commonly fodder for product gaps.

Good acquisitions create a strategic advantage pushing the ball to a significant goal.

Great acquisitions combine the best each entity has to offer. This result is products so innovative that they leapfrog several places over its competitors.



Pete Giza | VP Bus Dev | www.wealthsite.com
Concierge Reporting for the UHNW

PS. Blame my Android for poor spelling, bad grammar, etc. :-)

April Rudin

April Rudin

May 8, 2015 — 2:22 PM

Kudos to Jud Bergman for “going aganst his adivsor’s advice”...

I cannot fathom how this conversation has become so “large” over the the most basic of tools in 2015. I think it is safe to say that the Internet is here to stay!

Pete Giza

Pete Giza

May 11, 2015 — 5:00 PM


Can you expand on “I cannot fathom…”?


Pete Giza | VP Bus Dev | www.wealthsite.com
Concierge Reporting for the UHNW

Related Moves

January 9, 2024 at 4:09 AM

Dani Fava is out at Envestnet -- to capitalize on AI revolution at a new firm, she hints

The ex-TD Ameritrade talent was hired by CEO Bill Crager in 2020 to harmonize acquisitions -- not least MoneyGuidePro and Yodlee that the company still grapples with

March 20, 2024 at 1:25 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

See more related moves

Mentioned in this article:

Envestnet Inc
Top Executive: Jud Bergman

Envestnet | Tamarac
Portfolio Management System, CRM Software, Trading/Rebalancing
Top Executive: Stuart DePina

RIABiz Directory

The Industry Sourcebook for RIAs

   |    LISTING

RIABiz Directory sponsored by:

Directory Sponsor Logo

White Paper Postings

Common Tags

Recent Articles

Popular Writers

RIABiz logo


About Us




RIABiz, Mill Valley, California
Copyright © 2009-2024 RIABiz Inc. All rights reserved.