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Pressed by a Wall Street analyst, Bill Crager defines 'financial wellness,' a touchy-feely 'Hallmark' concept that just happens to be sweeping the financial services industry

The Envestnet CEO was self-deprecating about the 'Hallmark card' aspect of financial wellness but is targeting the company's full arsenal of products and services on the sweet equilibrium between money and life.

Tuesday, October 27, 2020 – 9:32 PM by Oisin Breen
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Bill Crager is sold on financial wellness. The concept was mentioned 29 times in less than an hour at an earnings call.

Brooke's Note: Us reporters are Old School. When a word or expression gets used, we believe that it should be crystal clear what it actually means. So we've been leery from the start about "financial wellness." We are certain the Buddha would find it oxymoronic, that Merriam and Webster would turn over in their graves and that Orwellian characters everywhere are exulting about its rise. We are equally certain that a preponderance of Americans -- never mind our country's finances -- are unwell with regard to balancing life needs with spending, debt, income, investments and insurance. Yet those in my profession are not alone in worrying about this tossing about of "financial wellness" as if its descriptive powers were in a league with "black" or "white." A Wall Street analyst had the gall to ask Envestnet's Bill Crager right out in open society. It went perhaps better than expected. The CEO balanced humor and description in equal measure. But it took lots of words. That may be why it gets used so much in the first place to describe "all of the above" financial services in the context that their is a deep, unseen synchonicity between them.

Bill Crager not only knows "financial wellness" when he sees it, he can also define it -- no irony here. 

The new Envestnet CEO spelled it out for a virtual audience of skeptical Wall Street analysts -- with his own brand of self-deprecating humor.

"It's a little bit like a hallmark card, right? I mean it's a feel good," he told analysts at Q2 earnings call over the summer.  

"It's a financial plan that's headed you in a direction, then the best way to achieve that plan, investing, protecting income, credit, banking, how I balance health care, with health care costs," he continued.

"How do I pull that picture together to create balance, and balance is where financial wellness lives."

Raymond James analyst Patrick O'Shaughnessy hit the nail on the head: "You guys talk about financial wellness, and it feels like, I hear that phrase being spoken by more and more companies as time goes on." 

What he wanted to know is how Envestnet is delivering financial wellness in "ways that other companies are not."

Scores of competing firms are facing the same existential question. Crager clearly grasped its importance. See: Never mind the short-term gains, Bill Crager tells Wall Street he's keeping Yodlee as it wins back accounts from the Plaid-era firms with oodles of value yet to be unlocked

The word "wellness" was mentioned 29 times during the 53-minute earnings call. 

Breadth, scale

But the concept is more than the sum of the parts Crager spelled out. It's a powerful marketing tool that is gaining currency across the business world. 

Financial Wellness Infographic
An Envestnet Infographic depicting wellness.(click to enlarge)

The Mass Mutual Financial Wellness Trend Study survey this past February found that nearly half (42%) of 863 employers surveyed offered financial wellness programs as part of their retirement plans.  

Another 19% said they were in the process of implementing programs and 19% said they planned to introduce wellness programs within the next three years.

Crager said the Chicago-based firm has a leg up in the financial wellness sweepstakes because of Envestnet's depth and breadth.

"We're best positioned to do it; only Envestnet has the depth of data, the scope of technology from front-to-start and the network of solutions, [including] our investment platform ... insurance exchange [and] credit exchange," he explained. 

"We can do it at scale for millions -- tens of millions of families."

Expanding definition

Selling wellness is having the cogs mesh for long-term and short-term goal-setting, investment returns, risk-control and planning, according to the firm.

"It's an acknowledgement that the phrase 'financial wellness' is used by several companies, and it can be hard to understand what it means," says an Envestnet spokeswoman.

"We’ve been clear in our definition ever since we introduced it, and we continue to expand upon our description of financial wellness as we evolve," she states.

"It's centered around an expanding definition of financial advice and the role of an advisor," she continues.

"[It is] connecting an advisors' clients' daily financial lives with their long-term goals through: planning and budgeting; investing; managing credit and protecting capital, backed by the power of data & analytics."

Crager's full statement explains the at times slippery term by breaking it down, and making it relevant to his firm's strategy.

He emphasizes that the admixture of the software his firm sells and the analytics and data it provides is why financial wellness matters to Envestnet's business.

Position of strength

Founded in 1999, Envestnet is a bit like a giant virtual wirehouse. It serves 4,900 clients and 103,000 advisors, including 500 of the largest RIAs, 16 of the 20 largest US banks, 46 of the 50 largest brokerage, and hundreds of financial technology firms.

It administers a total of $3.8 trillion on behalf of 12.3 million investors and aggregates from 17,000 data sources.

Envestnet sells portfolio management (Tamarac, and PortfolioCenter), financial planning (MoneyGuidePro), and data analytics software (Yodlee), and it also runs an in-house TAMP (PMC), and insurance and credit exchanges. See: Envestnet's shares are surging; it's getting Tamarac's 1,000-plus RIAs to invest more of their $1.2 trillion of assets in its managed accounts and MoneyGuidePro is succeeding as part of the Tamarac bundle

The outsourcing giant's revenues have grown by an average of 26%, or $29.3 million year-over-year since 2016, according to 10-K filings for 2017 and 2019.

Moreover, once non-cash expenses are removed, an annualized projection of the firm's performance in the first six months of 2020 suggests its income should rise a further 14% or $27.5 million, according to its latest 10-Q filings.


Related Moves

Envestnet just named an ESG head to meld 'wellness,' 'The Intelligent Financial Life' and 'sustainable investing' into a single nirvana -- that starts outside of the product realm

Ron Ransom earned CEO Bill Crager's trust as chief business development officer and now will define how Envestnet conducts itself as a global citizen and vendor of wellness.

July 27, 2022 – 2:27 AM

Envestnet and Edmond Walters end odd couple 'Apprise' relationship with buyout, but leave open the door to jointly pursue RIA-to-entrepreneur dashboard... later

The MoneyGuidePro owner and eMoney founder execute clean break with Apprise IP rebranded as 'Wealth Studio.' Walters off to the races with a startup and vague promise to collaborate later.

April 6, 2021 – 12:50 AM

Envestnet turns to former FIS executive -- and replaces a CTO -- to help shape up the firm's disparate offerings into a unified whole around the concept of 'wellness'

The Chicago outsourcer gets Donna Peeples to harmonize products and marketing to move beyond the 'TAMP' label as Orion contends for market share with Brinker added.

November 10, 2020 – 2:45 AM

Envestnet nabs Dani Fava to cross-pollinate semi-autonomous units and reap 'financial wellness' as the end product

The Chicago outsourcer has a massive, partially disconnected arsenal of products that CEO Bill Crager is rationalizing into 'wellness' with yet another new unit.

July 23, 2020 – 1:42 AM

See more related moves

Mentioned in this article:

Envestnet Inc
TAMP
Top Executive: Jud Bergman




Frank Reilly

Frank Reilly

October 28, 2020 — 4:31 AM
Was nobody around 10 to 15 years ago as unnamed advisors were talking about "Holistic" advice? How is this different? "It's centered around an expanding definition of financial advice and the role of an advisor," To funny!
Chris Heye

Chris Heye

October 28, 2020 — 12:49 PM
Maybe this will help? https://www.financialplanningassociation.org/article/journal/SEP20-introducing-hierarchy-financial-wellness
Maria Marsala

Maria Marsala

October 28, 2020 — 3:20 PM
Agree Frank. It's about naming what advisors do... should be doing... etc. It has to be about what the end result a person wants to achieve and include all the other spokes of a person's life. I think holistic... has a certain air about it for some people. Financial wellness I think is a more marketable phrase pertaining to the same thing. I did a search on financial wellness and it was interesting how many definitions were from the last few years. Just that I find, even when looking at the spokes in a person's life, it's not "balanced" -- where lets say every area gets a 5, 9 or 10, etc. It's more about a picture of what having and living a full-filled life is about.
Maria Marsala

Maria Marsala

October 28, 2020 — 3:23 PM
Agree Frank. It's about naming what advisors do... should be doing... etc. It has to be about what the end result a person wants to achieve and include all the other spokes of a person's life. I think holistic... has a certain air about it for some people. Financial wellness I think is a more marketable phrase pertaining to the same thing. I did a search on financial wellness and it was interesting how many definitions were from the last few years. Just that I find, even when looking at the spokes in a person's life, it's not "balanced" -- where lets say every area gets a 5, 9 or 10, etc. It's more about a picture of what having and living a full-filled life is about.

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