“Envestnet made the right call buying MGP,” he says. “I would have done the same thing if I was them. This will accelerate, not decelerate competition.”
Finally, it is rumored that one more developer with an excellent track record in financial planning plans to release new comprehensive planning software sometime early next year.
Besides the market participants competing in the traditional financial planning arena, there are several newer firms that are looking to broaden the boundaries of what is traditionally thought of as financial planning. For example, Whealthcare, co-founded by Carolyn McClanahan, a physician and CFP, develops software that helps advisors to older adults and their families make better financial decisions by implementing health care into wealth planning.
LoanBuddy is a new financial technology platform that focuses on providing solutions for advisors who are student loan planning for their clients. The firm processes the raw National Student Loan Data System (NSLDS) file into modern software to generate a detailed analysis of a client’s student loan debt.
i65 is filling a planning void with software that helps advisors provide their clients with expert, individualized Medicare enrollment guidance, and there are multiple firms that have developed detailed Social Security claiming strategy applications.
So while the dust has not yet settled on the Envestnet/MGP hookup, early indicators are that competition will remain alive and well in the financial planning software sector. Industry participants tell us that the acquisition is causing them to accelerate development in some areas, and others no doubt are reassessing their strategy going forward. These developments are likely a net positive for advisors.
While there seems to be disagreement on the virtues of an all-in-one provider versus a best-of-breed solution, it seems clear that both strategies will continue to proliferate, at least for the foreseeable future.
One suspects that there will be some further M&A activity in the months ahead, but it is too early to tell whether the MoneyGuidePro acquisition will be a catalyst for a meaningful industry realignment.