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.”
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.”
“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.