MIAMI BEACH, Florida — When Envestnet president Bill Crager heard the news about the death of his friend Jud Bergman, the company’s CEO and co-founder, he was devastated, but “knew the company had to run.”
The next day, Crager, now Envestnet’s interim CEO, flew from California to the company’s headquarters in Chicago to address the company’s employees.
“It is not OK to just get through. We have to do more,” he told the employees, recounting the story in an extraordinarily interview with MarketCounsel CEO Brian Hamburger at the company’s annual industry conference.
“Jud had big plans for the company,” Crager told conference attendees. “My job is to go effect them.”
Crager elaborated on those plans in a subsequent interview with Financial Planning.
“We’re not taking our foot off the gas,” Crager said. “We will continue to be acquisitive.”
Envestnet will also focus on integrating recently acquired services like MoneyGuidePro and PortfolioCenter, he added. Data, technology, insurance, planning tools and credit offerings will continue to be key products.
But while the TAMP and wealth management powerhouse, which works with nearly 100,000 advisors with over $3.5 trillion in assets, stays on course, it is also bracing for “a shift in the landscape” of the financial advisory business, Crager said.
Disruption by rapidly changing technology, changes in client behavior and advisor demographics are reshaping the business, he said.
It will be a busy year.
More competition to service advisors in this new environment is inevitable, he added. “There’s a big opportunity and well capitalized firms are recognizing it.”
Envestnet will waste no time dealing with the challenges ahead, Crager said. The company’s board of directors is expected to name a permanent CEO early in the first quarter of 2020.
“It will be a busy year,” he said.
Bergman and Crager founded the company exactly 20 years ago this month when they were 42 and 35 years old, respectively. They wrote down their simple but powerful mission statement to “build technology to service the advisor” on a napkin in a Chicago bar, Crager recounted in his interview with Hamburger.
The two men then set up a card table and a dial-up modem in a local law firm that had a spare office and started Envestnet. They initially funded the company out of their own pockets, then got $1.5 million from venture capitalists. As the company grew, it received private equity investments and went public in 2010.
“We felt like we got the keys to the car,” Crager said. “It was about what we were going to do next.”
Jud Bergman embodied the best of American values.
The capital infusion fueled nine acquisitions and explosive growth and Envestnet became the industry’s leading TAMP and technology provider.
Bergman’s relentless drive and foresight guided the company, Crager said. “He was such a life force, such a visionary.”
Bergman grew up in rural Minnesota, where his family built grain silos for farmers — ones Bergman helped construct as a teenager.
“He embodied the best of American values” and frequently quoted Abraham Lincoln and Bob Dylan, Crager said.
The Envestnet CEO was also “deeply spiritual,” Crager said. Although a Christian, Bergman was also a practicing Jew who kept kosher, he added.
While Envestnet prospered, Bergman suffered a personal tragedy in 2006 when his wife Susan died of brain cancer in her early 40s.
Several years later, Bergman remarried. His wife was with him in the taxi going north on Route 101 in San Francisco that night in early October when an impaired driver heading south crashed into them. Bergman, his wife, Mary Miller-Bergman, the driver of their taxi and the impaired driver were all killed.
[Bergman's death] was so shocking and final. It hit me so profoundly, what had just ended.
The Envestnet CEO and president talked every day, and Crager thought it was odd that Bergman didn’t return several emails that night. When he got the news the following morning, he was stunned.
“It was so shocking and final,” Crager recalled. “It hit me so profoundly, what had just ended.”
After having worked “incredibly closely for 20 years,” he said, “we had a connectivity that was amazing.”
The two men had also worked out a succession plan, which proved indispensable to keeping the company running smoothly, he told the advisors.
Not long before Bergman’s death, Crager recalled an eerily prophetic conversation with his friend.
Bergman asked him if he knew the story of Moses.
Yes, of course he did, but Crager wasn’t quite sure what Bergman was getting at.
“Moses knew he was going to see the promised land, but that he wasn’t going to get there,” Bergman told him.
