Bob Curtis will step back from his day to day management role at PIEtech to focus on software development. “The thing I am most excited about is that this transition allows me to focus on what I like to do best: develop software”, says Curtis. Curtis anticipates that most of his development energies will be devoted to MoneyGuide BLOCKS, their new modular planning tool. “I see tremendous potential for BLOCKS” he says.
Until MoneyGuidePro emerged upon the scene in the early 2000’s, virtually all of the leading comprehensive financial planning software was cash flow based. Goals based software existed, but the conventional wisdom was that it was too simplistic. MoneyGuidePro changed all that, and since 2008, when I began compiling software surveys, the application has ranked first in usage among our respondents. This, one could argue that Curtis is the Godfather of Comprehensive Goal Based Financial Planning.
BLOCKS is a natural evolution of the financial planning process. Rather than create a comprehensive plan, BLOCKS dissects the process into small, easily accessible pieces. You can have a BLOCK to create an emergency fund, to manage and eliminate student debt, to set retirement goals, plan for a life event, determine a life insurance need, a long-term care insurance need, etc. The possibilities are endless. This can be thought of new planning approach Curtis calls “Incremental Financial Planning”.
What’s really appealing about Incremental Financial Planning is its potential to help to a new, underserved market. Since Incremental planning can be done over time in small steps, the cost to consumers per increment is low, and since BLOCKS are both intelligent and easy to use, little training is necessary. BLOCKS are to comprehensive planning software what phone apps are to sophisticated software programs. BLOCKS can be the perfect tool for financial intermediaries who want to offer some targets advice or projects to clients without providing full financial planning services. This could include banks employees, insurance agents, accountants, retail P&C agents, etc. BLOCKS can also be adopted for direct to consumer use. BLOCKS can also be adopted easily for international distribution, a potential future growth opportunity for Envestnet.
Another appealing facet of BLOCKS is their versatility. You can use one BLOCK in isolation to, for example, address student debt. You can create a set of BLOCKS to get younger investors on the road to financial wellness by combining a student debt reduction BLOCK with a credit card BLOCK, an emergency fund creation BLOCK, a risk BLOCK etc. with some logic that instructs the investor where to allocate free cash flow each month for the best result. Since all the BLOCK data and calculations reside within the MoneyGuidePro back end, as a client completes a college saving BLOCK, a risk BLOCK, a retirement planning BLOCK, etc., they are essentially piecing together a financial plan in MoneyGuidePro over time if an advisor uses the two applications in tandem.
BLOCKS are the driving force behind PIEtech’s new MoneyGuideOne offering, but there is more to that offering than just BLOCKS. The user interface, which is similar in some respects to the Netflix user interface, is a flexible dashboard. Within it, you can organize sets of BLOCKS by planning situation (first job with debt, pre-retirement…), you can create a list of favorite BLOCKS, Envestnet could even layer on intelligence to show a list of recommended BLOCKS based upon historical usage use case. The possibilities are seemingly endless. There will be BLOCKS that launch performance reports, a client record, and more too.
The same interface can be adopted to client facing use, so they can see a list of to do’s that the advisor has created for them, a portfolio BLOCK, a MoneyGuidePro dial BLOCK, and much more.
The combination of Envestnet and PIEtech will benefit MoneyGuidePro users. Curtis says that PIEtech will be able to increase innovation, broaden the scope of what planning software can do, and deliver new products faster with Envestnet’s resources. If you think about Envestnet’s account aggregation capabilities, their AI capabilities, and the data they process, it is not difficult to imaging how some of those technologies can be applied to financial planning software to automate more, save advisors time, and to provide better results for the end clients. The additional resources that Envestnet brings to the table provide the ability for PIEtech to compete internationally, something they were reluctant to do previously due to resource constraints. BLOCKS looks like a product that can be easily adopted for worldwide distribution.
Envestnet’s partnership with eMoney founder Edmond Walters’ Apprise Labs will benefit from this deal. Too. Rather than having to adopt Apprise Labs estate and legacy planning software to two different platforms and two different sets of software developers, Walters can design a product for one unified platform, with support and assistance from Curtis that draws upon the best technologies of the combined entity. That makes the prospects for MoneyGuideElite more exciting and shorten the time to market. “I love what Apprise Labs has done”, said Bergman. “There will be a new version of MoneyGuide that leverages Apprise technology to provide all of the features that high net worth individuals expect from their advisors.
In a recent blog post, Michael Kitces raised the following question: Will Envestnet’s New Insurance Exchange Platform Become the Distribution Channel for Fee-Based Annuities?