LAS VEGAS – What can more than 90,000 advisors who work with Envestnet expect in the wake of the TAMP’s blockbuster $123 million deal with BlackRock last week?
Integration of three BlackRock technologies – FutureAdvisor, iRetire and Alladin – will begin this month and continue through 2019, says Jim Patrick, Envestnet’s EVP heading its Enterprise and Advisor divisions.
Should advisors be worried that BlackRock products will crowd out competitors on Envestnet’s valuable space, now that the world’s largest asset manager owns nearly 5% of the company?
No, says Patrick, a speaker at MarketCounsel’s annual conference, in an interview with Financial Planning.
Envestnet has to act as a fiduciary for its clients, according to Patrick, and will treat the new BlackRock products as “complimentary technology” that will help advisors achieve scale and improved outcomes.
Skeptical advisors probably shouldn’t worry and take Patrick at his word, say industry observers.
“It would make no sense for Envestnet to favor BlackRock,” says Denise Valentine, a senior analyst at Aite Group. “They have fiduciary and regulatory issues to worry about and can’t just push the product [of one of their investors] in front of clients.”
Tech consultant Joel Bruckenstein, founder and producer of the T3 tech conference, agrees.
“I don’t know for sure if open architecture will be affected, but Envestnet is saying all the right things,” Bruckenstein says. “I’m pretty confident they will bend over backwards to be fair.”
What else can advisors expect from Envestnet in 2019?
More investment in data and analytics, according to Patrick. Continuing the financial wellness theme the company touted at its annual conference in New Orleans in May, lending and insurance products, will also be emphasized, Patrick added.
Acquisitions are also likely, he says. Patrick noted Envestnet’s history of buying companies strategically, including Tamarac and Yodlee. Envestnet is interested in new and different capabilities that can expand its market, he said. “It would be challenging not to be at the table when these things come up,” he added.
A company that makes financial planning software is seen as a likely target. “Everybody is missing something,” Valentine says, “and although everyone has been talking about financial wellness for two decades now, we’re not there yet.”