CHICAGO - Envestnet wants to leverage Big Data.

The Chicago-based platform provider and outsourcing firm unveiled Envestnet Intelligence, a new content and analytic offering for advisors at its annual Advisor Summit conference Friday.

The offering features analytics tools, intellectual property, overlay services; guidance, news, analysis and customized reporting for multiple accounts. It will also include access to third-party macro-analytics technology provider HiddenLevers, which offers “stress testing,” scenario modeling and risk profiles for portfolios.

Envestnet president Bill Crager called Envestnet Intelligence “our application of Big Data” and “a game changer” for the firm, and its 23,000 client advisors. “It will be transformative in the way the platform will interact with you,” he told the 600-plus advisors who attended the conference.

HiddenLevers, he said, offers “a unique macro-economic scenario-based portfolio testing methodology that delivers portfolio insight that is easy to use and explain to clients."

Envestnet Intelligence will be rolled out throughout the coming year, Crager said. While “most” of the offerings’ capabilities will “come along with the platform” he said at a press briefing, advisors will have to pay extra for access to HiddenLevers and intellectual property, he said.

Asked how much money Envestnet spent on developing the new offering, Crager said there was “no explicit cost,” but that the company considered it an internal “resource cost.”

The offering – which Crager stressed was “not a product” - would enable advisors to “elevate issues that sit inside the portfolio” by “putting Big Data to work to be pro-active,” he said. Envestnet Intelligence would also allow advisors to “access new pools of intellectual capital” and open up new avenues of communication with clients by offering insights on what news events might mean for their portfolio.

Advisor reaction to the announcement was mixed.

Jay Hummel, president and  chief operating officer of Cincinnati-based Lenox Wealth Management, was enthusiastic, and said Envestnet Intelligence would “change the ways we do business”  by synthezing information more effectively and spurring pro-active communication with clients.

But other advisors thought the new offering might be over-kill.

“I think it might be very valuable to the 10% to 20% of our clients who like to micro-manage their portfolios,” said Scott Agnew, portfolio manager for Bend, Oregon-based Ascent Capital Management, “but the others don’t have the time. That’s what they’re paying me to do. I also wonder about the tax consequences if you’re constantly making micro-adjustments to the portfolio.”

Envestnet Intelligence might be more than most clients want to deal with, agreed Jason Kolinsky, president of Woodcliff Lake, N.J.-based Kolinsky Wealth Management, but he did think HiddenLever’s scenarios based on hypothetical events would be a “good prospecting tool.

“It’s a competitive advantage when you’re reviewing a prospect’s current holdings and instead of running it through a Morningstar analysis, which is more subjective, you can really show them what might happen,” Kolinsky said.

Tech guru Joel Bruckenstein also gave HiddenLevers high marks, but said it may be ahead of its time.

“Macro-economic scenario planning can be a useful tool,” said Bruckenstein, publisher of Technology Tools for Today and co-producer of the publications’ annual T3 Conference. “However, like anything new, it takes a while to catch on with the advisor community at large. To date, the more analytical advisors who make their own investment portfolio decisions are the ones who tend to be attracted to tools such as this one.”

“Macro analytics are where rebalancing tools were in this industry 5 to 7 years ago,” Bruckenstein continued. “As advisors become more familiar with the benefits - perhaps when there are a few more macro shocks to the economic system – I suspect that Hidden Levers will become more widely accepted, but only time will tell.”

 But according to former Merrill Lynch head Sallie Krawcheck, who spoke at the Envestnet conference and served as an informal advisor to the company on the offering, the time is now.

Envestnet Intelligence is part of the “seismic shift” that the consumption and engagement of information is undergoing, she said. “It’s part of a generational change that isn’t going away.”

Register or login for access to this item and much more

All Financial Planning content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access