Almost every competing developer of financial planning software that we talked to put a positive spin on the acquisition. “We look at this news positively,” says Pietro La Greca, vice president of enterprise solutions at financial planning software firm RightCapital. “The pricing of the deal gives legitimacy to our belief that financial planning drives client engagement. Profiles and NaviPlan were the market leaders until PIEtech came along. Bob and Tony are an inspiration for us.”
Angela Pecoraro, CEO at Advicent, the developers of NaviPlan and Profiles, says, “The acquisition adds a dynamic to the competitive landscape; it does not change it.” She welcomes the competition: “It will cause us all to raise our game.” She says the MoneyGuidePro approach also validates Advicent’s approach of having a single calculation engine that can provide a solution for all end-client needs from very simple to very complex. “We truly believe in holistic planning, but we will do it differently than the competition. Our next-generation tools will be more competitive and easier to use.”
Pecoraro believes that the market is going through a transformation. “The key is providing value in a dynamic advice ecosystem. Those who can meet the need of the future advisor will win.”
Tirdad Shojaie, the senior vice president of product, marketing and strategy at Fiserv, currently competes with MoneyGuidePro primarily in the enterprise arena. He believes that the acquisition validates his firm’s strategy, too. “Our strategy is to provide an end-to-end integrated platform, not just financial planning software.” Fiserv, he says, provides a solution that takes the client from initial engagement through the risk-assessment process, holistic goal-setting through implementation and ongoing monitoring of both the investment portfolio and the goals.
Shojaie believes that with the acquisition of MoneyGuidePro, Envestnet is following a similar strategy. “This is the beginning of an industry movement towards end-to-end advice,” he says. “This is a better dynamic for the client and for the independent broker-dealers.” He thinks the same philosophy will begin to permeate the independent RIA space as well. “For a long time, people have been selling pieces of a solution, but they are not integrated,” he says. Shojaie believes that Fiserv’s position as a pure technology provider gives his firm a competitive advantage.
Eric Clarke, CEO of Orion Advisor Services, disagrees with Shojaie, at least regarding independent RIAs: “We help support independent advisors, and we are advocates of independent software providers.” Orion has worked closely with MoneyGuidePro over the years to ensure a tight integration between the two firms’ platforms. “Our hope is that Envestnet will continue to support our deep joint integration,” Clarke says. For now, he is positive: “Look at the situation with eMoney. Initially, many people were skeptical, but the [acquisition by Fidelity] was a net positive for Fidelity, for eMoney and for advisors. Hopefully in a few years, we can say the same about MGP and Envestnet.”
In Clarke’s opinion, competitively it is less about who owns the software and more about providing the right solution. “With boomers retiring, they are less concerned about accumulation and more about income planning. Much of the software out there today is lacking when it comes to income planning.”
Alois Pirker, research director with the Aite Group, says that while Envestnet’s previous foray into financial planning software (Finance Logix) gave it some capabilities in the financial planning sector, MoneyGuidePro gives the firm adoption. “MGP has great market penetration,” he says. “The playing field has shifted. … Specialized high-end planning is important, but the total market for the service is relatively small. A lighter solution, like MoneyGuideOne, is something that virtually everyone needs.
“With the MGP acquisition, Envestnet is well positioned. Their investment platform, plus planning, plus Yodlee, with analytics on top, provides advisors with a full picture of the client’s financial situation. It offers an immense opportunity to gather insights that can lead to better client outcomes.”
For Mike Kerins, the CEO and founder of RobustWealth (now owned by Principal Financial Group), the acquisition spells opportunity. His platform, originally designed to bring institutional-quality money management to advisors, has been adding to its goals-based planning capabilities for some time now. This includes deepening projections, providing data aggregation and adding a financial wellness score. He says the Envestnet acquisition is prodding his firm to accelerate its development of additional financial planning capabilities.