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Envestnet will roll out RIA custody by 2024, disputing Bernie Clark's lean Schwab profit math, by citing average 15-basis-point margins

The Berwyn, Pa. company says Schwab's own public disclosures Clark's 'nine basis point' claims, though Envestnet will likely need to hand over as much as half the take to FNZ, a competitor says

Author Lisa Shidler May 13, 2023 at 1:03 AM
1 Comment
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Bill Crager: 'All economics related to custody average around 15 basis points.'
Brooke Southall and Keith Girard contributed to the editing of this article.

RIA Custodians

Brian Murphy

Brian Murphy

May 13, 2023 — 5:18 PM
I think this article suggests the inconvenient truth about the advisory industry that we would all benefit from by pondering. If Envestnet is willing to make a significant bet on custody at a payoff of roughly15bps, what does that say about their core business & prospects in selling technology to RIAs? They made a major bet on Yodlee and still can't make this turn it into anything after what, 5-7 years? Either the team at Envestnet are a bunch of bumbling idiots, or maybe there's no "there" there when it comes to targeting the B2B advisor space. I would suggest that the B2B model in financial services only works for the largest players (Schwab, Fidelity, etc.) when supplemented with a B2C business. Build the B2C first, then tack on B2B as a secondary series of offerings. Why would Envestnet expect to win anything in the advisor custody space? I mean seriously. Perhaps all these B2B startups targeting the multi-billion $ advisory industry would benefit from using Envestnet as a case study before launching also-ran technology offerings - whether it be tax-loss harvesting software, white labeled robo-advisors, trade management software, etc. The advisor pie is actually much smaller than most suspect. The best thing Envestnet could do given their current position in the industry, is fund an external B2C investment advisory organization that grows to compete with the big boys using Envestnet's myriad of technology. Rethink the industry from the ground up and allow your investee to build out next generation "over the top" advisory business that leverages assets such as Yodlee. Envestnet would get a bird's eye view of where the economics lie by actually managing money.

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April 20, 2024 at 2:54 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

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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

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January 9, 2024 at 4:09 AM

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Envestnet Inc
Top Executive: Jud Bergman

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