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Walters gets MoneyGuidePro and Envestnet to each takes 33% stakes and bring their talents, data and market reach to reinventing financial planning to include a future beyond death and taxes
February 1, 2019 — 5:06 PM by Brooke Southall
Brooke's Note: The bottom line is that Edmond Walters let not a moment pass after his non-compete with eMoney expired. He is going after the high-end investors and expanding the definition of what high-end planning looks like. His move to start Apprise Labs may answer a lingering question about just why he left eMoney with such urgency. He is now making clear he doesn't at all like the direction he perceived it was heading: downmarket and toward a more product-oriented advisor.
Three RIA forces of nature with the most to gain by eMoney's loss are now co-equal partners in a venture that takes dead aim at the Fidelity subsidiary's market-leading position -- and even its best engineers.
The venture, Apprise Labs, has 14 people on staff including ex-eMoney engineers and is structured simply in one important respect: Each of its co-founders is a 33.3% owner.
Joining hands in the rare show of unity among business rivals are Envestnet, PIEtech (i.e. MoneyGuidePro's owner) and former eMoney CEO and founder, Edmond Walters. They've formed a complex pact, sharing and competing in the development of software that presumes that money outlives its owner.
The idea is not only to create better plans, but also a software that will connect an RIA to the plans and interests of the next generation--before it typically bolts during probate.
One of the few competitors to eMoney at this estate level of planning is Your eFolio, a software firm founded by Scott Huff in 2016. He started it as a side venture while working as an advisor with Omaha, Neb.-based Arbor Point. See: What Securities America and NorthStar Financial are up to with the creation of Arbor Point Huff is registered with Securities America.
Walters' move into estate planning affirms Huff's vision. "I'm ecstatic," he says. "It's fantastic. For someone like Edmond Walters to do this is a great validation."
Driving that train
That said, Walters is very much driving the Apprise train, which he launched in July following the termination of his non-compete with eMoney. Walters also has spent time working with AdvisorStream, which may provide the content for Apprise. See: Edmond Walters jumps aboard RIA software fast-riser, rolls up sleeves and takes new tack on perceived Vestorly void
Up to then, he says, he was "doodling" out Apprise, which is aimed at the high end of the market -- at least as it'll be marketed under the Apprise brand.
"I really think eMoney is moving downmarket to compete with MoneyGuidePro," he says. "They've done nothing with advanced planning in four to five years."
Walters' sale of eMoney to Fidelity in 2015 is famous in two respects -- the astounding $250-million price and the fact that Walters chafed so much under Fidelity ownership that he exited eMoney long before the deal contemplated a transition to a new CEO. See: Edmond Walters bolts from eMoney and Fidelity Investments scrambles to manage the jilt It left Fidelity to take the unusual step of naming Mike Durbin as temporary CEO. See: Mike Durbin gets right to work as eMoney CEO with MoneyGuidePro coopetition deal -- even though he's 'interim'
The new Apprise product likely won't be ready for prime time until at least September.
MoneyGuidePro and Envestnet will each sell their own renditions of the technology under their own brands to their own market segments, he adds.
Apprise will essentially allow MoneyGuidePro to "copy" what Apprise does but largely without competing. MoneyGuidePro will go after a more downmarket and enterprise sub-segment of the market.
Jud Bergman, chairman and CEO of Envestnet, described his firm's Apprise participation as a way to both move upmarket and make planning, in general, a more modern experience.
"We are excited to be working with two of the most trusted names in the industry to develop a new collaborative financial planning tool that will empower advisors to provide a higher level of client service," he said in a release. "This solution further advances Envestnet's mission of offering holistic financial wellness solutions that make people's lives easier."
Envestnet's shift of its business model from being primarily a TAMP and clearinghouse for SMAs for IBD reps to one focused on a "wellness" deliverable has long made observers suspect it needed to own a major financial planning firm, even beyond FinanceLogix.
"These new capabilities will use visual, interactive technology to help clients manage important financial decisions pertaining to home sales, retirement investments and assets, inheritance gifts, endowment contributions and more," he adds.
The change to the way Apprise works, meanwhile, is so radical that it demands that an RIA make a hardware purchase -- namely a Microsoft Hub and an 86-inch Dell screen that costs around $4000. The big screen can be manipulated with touches.
"You can go without it, but you're crazy if you do, and you don't belong in the business," Walters says.
His ardor about how investors and advisors receive his technology is not new. Much of Walters' legacy with regard to eMoney was with regard to how he was able to innovate the presentation of information on a dashboard
He explains that in virtually any other realm of design -- right down to putting in a new kitchen window -- this kind of technology is in mainstream use and that the advice business is simply behind.
Fox in henhouse
Walters admits that Envestnet may effectively compete with him on the high-end using Apprise capabilities but Envestnet brings key data to the table that make it an invaluable partner.
"For me it's like being a fox in the henhouse," he says. Walters adds that Envestnet also lent him its Finance Logix engineers to build his "engine."
The RIA data that Envestnet provides Apprise Labs, through Tamarac and otherwise, enable Apprise to pre-fill client reports and provide cash flow reports. This data does not come from the Yodlee side.
Walters points to Envestnet's relations with Lenox Advisors of New York and the large RIAs that do business with RBC as another RIA data access point outside of Tamarac.
Yet Walters also isn't playing down what he believes he brings to the deal -- vision, experience and the force of will needed to persevere in creating a much better financial planning mousetrap.
"My regret at eMoney was that I built things that were good and were 80% there, and I thought I'd go back and get to the other 20%. This time, I'm taking it to the 100%."
eMoney has left the door open for a competent entrepreneur to usurp its position on the high-end, Huff says, adding that some of his perspective is based on an insider's view, having previously worked at Fidelity.
"eMoney's (estate planning) platform is very basic and hasn't been touched for a long time. It's just not on their radar."
eMoney spokeswoman Joanna Armandi said she had no comment to any criticism but sent a link to the page on eMoney's website that describes the product.
Yet in a twist, Walters says he would like to be free to sell Apprise as a tool to users .of any provider, including eMoney. For now, he says his partners are less wild .about the idea.
Walters says his objective differs from eMoney's in that he is building his technology with the end user and the advisor in mind, rather than enterprise, or the products they sell.
"That's why I know I'll beat eMoney," he says.
No people referenced
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eMoney Advisor LLC
Financial Planning Software
Top Executive: Edward O’Brien
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