With the addition of PIEtech to the Envestnet stable, the answer is a resounding Yes. At the recently concluded T3 Advisor Conference, PIEtech CEO Bob Curtis talked with us about the important role that annuities and other insurance products can play in financial planning, and how the lack of appropriate products targeting fee only advisors, as well as the technology to support them, inhibits the use of such products. We think it’s likely that as part of the Envestnet team, Curtis will be able to revolutionize the way that advisors deploy insurance products to the benefit of their clients.
Some will raise concerns about the deal, much as they did when Fidelity purchased eMoney. Will the culture change? Will the development team continue to innovate? With hindsight, eMoney is better off today than they were before the merger, as is Fidelity. In the eMoney case, Walters left sooner than some eMoney clients may have liked, but in the case of Envestnet and PIEtech, the key principals are more aligned in both vision and temperament, so I don’t anticipate disruptions.
Will Envestnet continue to integrate with other providers? Bergman and Curtis say they will. This rings true because integration has been an important component of PIEtech’s success, and it is in their business interest to maintain this practice. Envestnet will provide an end-to-end solution to clients, and they will do all they can to play up the advantages of using more Envestnet software components, but ultimately it will be up to the customer to decide whether they want to avail themselves of the total Envestnet solution or only portions of it.
Is Envestnet becoming too dominant? I don’t think so. The PortfolioCenter and PIEtech acquisitions strengthen Envestnet’s hand, but the T3/Inside Information Software survey identified numerous competitors in the portfolio management category, many of which boasted high user satisfaction scores and that have the backing of large organizations like BNY/Mellon (Albridge), SS&C and Morningstar. There has been a bit more consolidation in the financial planning software space recently, but market penetration in the category is only 63.57%, so there is 36.43% of the market that is up for grabs. eMoney has been a fierce competitor to MoneyGuidePro in recent years, and others, including Right Capital, Advicent, Advizr, and FISERV continue to compete aggressively in the category. In addition, RobustWealth, now part of the Principal Financial Group, continues to build out their own integrated financial planning capabilities.
This acquisition, combined with the recently announced acquisition of PortfolioCenter position Envestnet clearly as a leader in wealthtech, particularly in the key categories of all-in-one, financial planning and portfolio management. It also positions Envestnet well to grow the all-in-one segment significantly. The combined Envestnet/PIEtech firm is well positioned to grow the financial planning/financial wellness portion of the business both domestically and internationally. In addition, the collaboration of Bob Curtis, the father of modern goals-based planning with Edmond Walters, the father of modern estate and legacy planning, Envestnet is not only uniquely positioned for future financial planning software innovation, but also in a position to apply that valuable intellectual property to other areas of their business. It will be interesting to see how competitors respond to this formidable lineup.