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About Envestnet Asset Management, Inc.

Envestnet provides managed account services for around 20,000 financial institutions and investment advisers. The company's online financial planning programs assist brokers, banks, insurance companies, and registered investment advisers with portfolio construction and analysis, generating proposals, and managing client accounts. Subsidiary Portfolio Management Consultants (Envestnet | PMC) provides consulting services to financial advisors and affords them access to managed accounts, mutual funds, exchange-traded funds, and alternative investments. Founded in 1999, Envestnet supports about $329 billion in assets.

Operations

In addition to its AdvisorSuite software and Envestnet | PMC services, the company operates Envestnet Reporting Solutions (Envestnet | Vantage), which provides investment advisors with a detailed picture of their clients' holdings. Altogether, Envestnet's capabilities allow advisors to select from a wide range of investments and services that best match their client's needs.

Envestnet operates two segments: Envestnet Wealth Solutions, which generated around 80% of the company's total revenue in 2019 and provides wealth management software and services to support financial advisors and institutions; and Envestnet Data & Analytics, which began in 2019 and is a data aggregation and data analytics platform for digital financial services.

Envestnet earns most of its money by charging fees based on a percentage of assets managed or administered on its platform by its financial advisor clients (the majority of its revenue) and by licensing its technology. It generated around 55% of its total revenue from assets under management or administration during 2019. The remainder of its revenue came from subscription and licensing fees (about 40% of revenue) for its platforms and professional services and other income (nearly 5% of revenue).

Geographic Reach

Chicago-based Envestnet has offices in nine US cities, including Boston, Colorado; Berwyn, Pennsylvania; Richmond, and an office in Trivandrum, India. The firm generated about 95% of its revenue from business in the US during 2019, while the rest came from overseas.

Sales and Marketing

The company's major clients include FMR LLC, Northwestern Mutual, National Financial Partners, and National Planning Holdings. Financial services giant FMR accounted for approximately 15% of Envestnet's total revenue in 2019 about 470 companies were using the firm's Envestnet | Yodlee platform as of early 2016, including some 15 of the approximately 20 largest US banks and hundreds of Internet services companies.

Envestnet markets its products and services through paid print and online advertisements, e-blast campaigns, and sponsored webinars for financial advisors. It also partners with independent broker-dealers to create direct mail campaigns to target financial advisors. The firm's sales teams are organized by sales channel and product offering, with its enterprise sales team focusing on enterprise clients, its advisory sales teams serving financial advisors of broker-dealer and RIA firms, and a direct sales and pre-sales team to serve leading global financial institutions.

Financial Performance

Rising financial markets and new customer business from acquisitions have helped Envestnet's assets under management and administration swell over the years, causing revenue to more than double since 2015. Meanwhile, its annual profits have been unsteady, rising and falling year-over-year.

The company's revenue jumped 11% to $900.1 million in 2019, mostly thanks to a 1% growth in asset-based revenue, a 28% increase in Subscription, and a 4% increase in Professional services.

In 2019, the company incurred a net loss of $16.8 million. A $118 million increase in operating expenses and higher total other expenses contributed to the company loss. 

Cash at the end of the year was $82.8 million. Net cash provided by operating activities was $108.7 million and financing activities added another $60.5 million. Investing activities used $375.7 million for business acquisitions and capital expenditures.

Strategy

Envestnet intends to increase revenue and profitability by continuing to pursue the following strategies: Add new enterprise clients; Increase its advisor base; Extend the account base within a given advisor relationship; Expand the services utilized by each advisor or enterprise client, including the cross selling of services across Envestnet's business lines where applicable; Continue to invest in its technology platforms and data analytics capabilities; and Continue to pursue strategic transactions and other relationships.

The company expects to grow its business by, among other things, making acquisitions. Over the past five years, it has completed a number of acquisitions. In early to mid-2019, the company acquired a private AI company, PortfolioCenter, and PIEtech.

Mergers and Acquisitions

In 2019 Envestnet agreed to acquire PIEtech for about $640 thousand. PIEtech owns the MoneyGuide family of financial planning software for financial advisors. The MoneyGuide app complements Envestnet's Logix and Apprise financial planning programs.

In 2019 Envestment acquired certain of the assets, primarily consisting of intangible assets, and the assumption of certain of the liabilities of the PortfolioCenter business ("PortfolioCenter") from Performance Technologies, Inc.

Envestnet Asset Management, Inc.

35 E Wacker Dr Ste 2400
Chicago, IL 60601-2310
Phone: 1 (312) 827-2800

Firm Stats

Employer Type: Privately Owned
Vice President Product Development: Joanne Hartung
Svp, Chief Human Resources Officer: Sharon Rosenthal
General Counsel: Shelly Starr
Employees (This Location): 96
Employees (All Locations): 447

Major Office Locations

Chicago, IL

Other Locations

Denver, CO