Most of Envestnet’s technology caters to advisors serving the already-wealthy, but the firm’s latest acquisition provides new capabilities for firms working with investors who haven’t yet accumulated significant assets.
The Chicago-based fintech giant and turnkey asset management provider has purchased Harvest Savings & Wealth Technologies, which builds technology to automate “micro-saving” and “micro-investing” at banks, credit unions and other financial institutions. Some of Harvest’s clients include Apex Clearing, First Citizens Bank and John Hancock,
Terms of the deal were not disclosed. Before the acquisition, Harvest had raised $42 million in funding,
Using Harvest’s technology, clients can designate any number of financial goals, no matter how big or small. Algorithms will automatically move excess cash into the proper savings or brokerage accounts, says Envestnet president Stuart DePina. The idea is to help younger consumers build better savings habits and think about long-term planning.
Fewer than four in 10 Americans have enough savings to cover a surprise $1,000 expense, according to a recent Bankrate survey. With Harvest, Envestnet is hoping it can help its bank customers reverse the trend and build wealth, says Dani Fava, head of strategic development at Envestnet, in a statement.
“The right financial advice and investment strategies can make a great difference for one's financial future,” Fava says in the statement. “However, the path to financial wellness begins with saving."
Envestnet plans to combine Harvest’s technology with Envestnet Yodlee’s data aggregation to let the bank, wealth management firm or advisor know how clients are progressing towards goals, and when they are ready to move from a savings account to an investment product.
“We’re trying to create a glide path for individuals to migrate up the value chain, where you move from being a spender to a saver to an investor,” DePina says. “All of those things are inter-connected, ultimately.”
Some advisors may remember Harvest as Trizic, a white-label digital advice platform that once competed with companies like SigFig. Though the company has since rebranded and pivoted to micro-savings, it still has some digital account opening technology that Envestnet plans to integrate into its suite for independent advisors, DePina says.
“That part of the solution set will [provide] an immediate lift to RIAs” using Envestnet, DePina says. “That’s coming certainly by the end of year.”
Harvest’s San Francisco-based team, including CEO Drew Sievers, will join Envestnet.
