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How Envestnet is leveraging its data ‘ecosystem’

Envestnet is updating its advisor tech platform with an eye toward helping independent advisors measure themselves against competition. Its latest initiative shows how the wealth management behemoth is grappling with integrating a tangled web of acquisitions.

Called Advisor Analytics, the five new tools are designed to give advisors better access to the firm’s vast “ecosystem” of data, said Frank Coates, Executive Managing Director of Envestnet | Yodlee. For example, new dashboards will show advisors how they stack up with their peers about the overall health of their advisory business, including risk ratings, advisor fees and account performance.

“By unifying data from multiple sources and providing insights, we’re enabling advisors to bring more value and drive impactful results,” Coates said in an email. “We benchmark portfolio construction, business key performance indicators and fees. All of these benchmarks help advisors make better decisions faster.”

Envestnet, which has $443 billion in client assets under administration, collects data from roughly 96,000 advisors and 3,500 enterprises on its platform, according to the firm.

Envestnet  CEO Jud Bergman
"Jud had the optimism of a true entrepreneur: He believed," says former Financial Planning editor, Marion Asnes.

The largest turnkey asset manager also incorporated artificial intelligence into the tools for natural language processing, according to Coates. By analyzing questions advisors are asking, the firm can get a handle on their needs and anticipate how to answer them, he said. The data, which also comes from third parties, uses cognitive analytics to create predictive models.

Envestnet purchased the Silicon Valley data aggregator Yodlee in 2015 for $660 million. Roughly four years later, the firm is reaping the fruits of the tie-up and touting the importance of data. Revenues were up 44% at Envestnet | Yodlee in 2018, according to the firm.

The future of advice will rely heavily on the intelligent use of data, says Bill Crager, CEO of Envestnet Wealth. The new tools give advisors “detailed insights into their practices, comparison and peer analysis and helps them continuously monitor clients’ progress toward goals,” Crager said in a statement.

Envesnet revenue IAG 030119

In March, Envestnet inked one of the biggest technology deals of the year by acquiring MoneyGuidePro, the largest financial planning tool provider by market share. Last month, the firm announced a plan to offer loans through a partnership with Advisor Credit Exchange, which gives advisors the ability to connect their clients directly with lenders.

Offered through Envestnet Intelligence, the tools are available on desktop, mobile and voice channels. Third-party data feeds, fee and performance comparisons will also be available via widgets. Other features include a weekly report of product trends and market shifts and a taxscore dashboard to help manage tax-smart investment portfolio.

The announcement was made at the firm’s Advisor Summit 2019 in Austin, Texas.

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