From Legacy Systems to Leading Edge

The right technology increases growth and revenue. Having an integrated, cohesive technology platform with scalability, high adoption and consistent utilization improves your employee and client experience.​ Firms focused on long-term growth for optimal value are taking steps to improve their technology platforms and optimize their operations.

Join us on today’s Oyster Stew podcast as Oyster’s Jeff Wilk and Envestnet Chief Relationship Officer and Group Head of Wealth Solutions and Asset Management Distribution, Andrew Stavaridis, bring you an insider’s perspective on the industry’s technology evolution, from point solution technology to cutting-edge platforms that are accessible, modular, and affordable for mid-sized to smaller firms.

In this episode, you’ll discover:

• Pivotal shifts that have reshaped wealth management technology.
• How strategic alignments have paved the way for innovative, modular platforms.
• Insights on how firms like yours can leverage these advancements to stay ahead.

Additional Resources

Industry Insights: Broker-Dealer Technology Platforms

Choose The Right Wealth Management Technology Core

Platform Ownership: Weighing the Strategic Choices

Ready to revolutionize your firm’s technology?

Let Oyster Consulting help you take the next step. Oyster Consulting’s technology and platform experts have the experience in industry insights you need to make the best strategic decisions to help your firm stay competitive. Take advantage of Oyster’s Technology Platform Review today and see how your firm can benefit from the latest advancements in wealth management software and technology.

Transcript

Transcript provided by TEMI

Bob Mooney:  Welcome to the Oyster Stew Podcast. I’m Bob Mooney, General Counsel for Oyster Consulting. Platform technology is constantly evolving, while providing solutions that often create complexity and confusion when it comes to assessing which technology is the optimal path forward. In today’s podcast, Oyster’s Jeff Wilk and Envestnet Chief Relationship Officer, Andrew Stavaridis, share their insights into the wealth management technology platform evolution, what FinTech will look like in the future, and how firms are using technology platforms today. Let’s get started.

Jeff Wilk:  Welcome to the Oyster Stew Podcast. I’m Jeff Wilk, Managing Director for Oyster Consulting from the Strategic Planning and Execution practice area. Today we’re going to talk about technology relationships. You know, buzzwords have been used for a long time and are often overused to simply grab attention, algorithms, robo point solutions, swivel chair, digital transformation. And of course, now everything is all about AI (Artificial Intelligence). But for technology to work and for it to be adopted and delivered to your required ROI goals, it’s more important than ever for it to be more than buzzwords flashing on a screen. It all has to work together seamlessly, cohesively, accurately. Simply put, the relationships up and down your tech stack have to be strong, tested, understood, and trusted. With me for today’s podcast as an industry expert with whom I’ve had the honor of sharing a decade plus relationship with, and who exemplifies these very characteristics and has a true mastery of forging solid technology relationships, is Andrew Stavaridis. Andrew is the Chief Relationship Officer at Envestnet, where he’s responsible not just for the firms many BD and RIA relationships, but also being the voice of these firms when it comes to developing and delivering on the Envestnet strategic roadmap, and how that roadmap intertwines with other technology and technology partners.

I am thrilled to have Andrew with us today to discuss technology trends and perhaps share some insights into recent industry happenings. Andrew, welcome to the podcast.

Andrew Stavaridis:  Thank you, Jeff, for having me. Really excited to be here today.

Jeff Wilk:  Absolutely. I’m glad we have the time to spend with our listeners. I think it’d be probably the most appropriate if we kick off with, what I’m kind of calling a nod to the news. I know you and I have been speaking about doing this podcast for probably upwards of two months now. And between then and today, you guys have had a couple of announcements in the press that actually provide a very timely backdrop for our conversation today. If you wouldn’t mind, could you take a couple of minutes and provide what I call a treetop level description of some of the things that have been in the news.

Andrew Stavaridis:  Sure, Jeff. Yeah, it’s been an exciting spring for sure at Envestnet. Obviously, the latest news that just came out was the announcement that Bain Capital will be taking Envestnet private. We’re in the process now of going through that transaction, and the deal will close sometime later this fall into early winter – November timeframe. But it’s been a few other major announcements that we made this spring and kind of culminated into that announcement from Bain.

Way back in early summer, we made an announcement for a premier partnership with some of our largest asset manager partners in Fidelity, BlackRock, State Street and Franklin. And then about six weeks later, we made an announcement about a deepening relationship that we have with Fidelity and bringing some of the technology and capabilities that Envestnet has in the marketplace in a deeper way with Fidelity, and integrating those into their technology to deliver to our mutual clients.

So, there’s just a few of the announcements coming out this spring. You know, you think about Envestnet over the last couple years, in terms of what we’ve been doing as an organization, restructuring the business, realigning our strategy in the marketplace. The deal that was announced with Bain is a validation of that work we’ve been doing as an organization, the partnerships that we announced, and the premier partnership, as well as the strengthening of a 20-year relationship with Fidelity. So, we’re really excited to Envestnet going private is going to be the next chapter in Envestnet. It will be exciting to see where it takes us from here.

Jeff Wilk:  No, Andrew, that’s really great, and I appreciate you sharing some of that detail with us today. You know, it’s interesting, there’s a definition of keeping busy, and then there’s what all of you have been up to in the past six to eight weeks or since the spring, as you mentioned. But really, really exciting news and great to hear. I know from an Oyster client perspective, so many of the things you just described are areas that have been a focus of firms when looking at their technology platforms, which is really what started our concept of having this discussion today.

You know, lots of things changed, right? Platform technology evolution is constant, but in the past several years, there’s been such dramatic change, a lot doing with the access to technology and the advancements in technology allowing newer entrance into the marketplace. And while on one hand that all creates opportunity and provides solutions, on the other hand, sometimes it creates complexity and confusion about which do you do first? What comes next? Which is the optimal solution for me? How am I going to get my advisors or their end clients to actually adopt it, so we can achieve our business goals in deploying such and such technology?

So, there have been these concepts from what some have called point solutions, or from a user perspective, the swivel chair, challenges of moving from one technology to the other in a non-integrated way, and then all the way on up to finding solutions to those issues through platforms, getting larger and larger and yet at the same time, if not done extremely intricately, becoming more complex. So, solutions to problems, sometimes creating new opportunities, quasi problems for firms to solve for. And I think some of the things that you have been involved in have really played a large role in providing those solutions for broker-dealers, RIAs, and clients themselves. Any thoughts on platform evolution in the past, but more importantly going forward?

Andrew Stavaridis:  Yeah, I know Jeff, we’ve talked about this and, the two of us have done this a long time. So, we’ve seen how this industry’s evolved over the last 25 years. When you think about investment as a platform, investment’s been around 25 years. We have really led the industry in helping broker-dealers, RIAs, insurance companies, banks, institutions, advisors, really scale their business. The technology that Envestnet brought to the marketplace, going back into the mid-2000’s really helped transform the industry, helped transform how institutions were selling business and what they were selling, moving from a commission-based book of business to advisory-based book of business. That’s really where Envestnet kind of changed the landscape and helped advisors transform their business. Clearly over the last 10, 15 years, you’ve seen not just an evolution of this industry, but to your point, Jeff, there’s been a lot of advancements in technology.

Envestnet has kept up in that. We’ve been a leader in many aspects of that, whether it’s acquiring technology, whether it is integrating with technology, but there have been a lot of single point type solutions and FinTech firms that have developed new technology that have allowed firms to advance their capabilities and offering for their advisors. But again, to your point around what it created, is you created somewhat of a swivel chair effect for a lot of institutions, enterprises, advisors, in terms of operating on a daily basis. They loved all the different capabilities and advancements, but those didn’t talk very well to each other over time. What you’re seeing in my mind now is kind of an evolution in the last few years around how firms and advisors have said, “I have too many single point or solutions to operate my business,” and they’re trying to figure a way to scale that in a better way.

It doesn’t mean that the, I’ll call it, single point solution or firm that’s focused on a service for a client doesn’t exist, or isn’t relevant in the marketplace today. But firms can’t operate in a way where they have six or seven different technology solutions to run their business, whether it’s operationally, whether it’s for compliance, whether it’s for balancing, whether it’s solutions and offerings that they’re bringing the platform planning. They have to figure a way that the experience for that advisor is very different than what they’ve had to do in the marketplace in the last few years. And partly it’s being driven by the client base.

Clients today have access to a lot of the solutions and capabilities direct to a lot of financial service firms. They’re seeing the ability to open up accounts in a faster way. They’re accessing products that they haven’t had before, and advisors and institutions need to make sure that they’re relevant going forward in the future. That’s where firms like Envestnet and the capabilities that we have advanced in the last few years are allowing that scalability for these institutions and advisors and allowing them to be able to minimize the amount of, I’ll call it third party solutions, to operate their business. Again, does not mean there is not a place for those. There’s always going to be a place for innovation in this marketplace. It’s what helps drive this kind of fast-paced FinTech marketplace. But because of cost compression, because this experience really needs to change in how businesses have to operate, I think you’ll see fewer and fewer firms having multiple types of FinTech providers. They’re going to look for a few that are going to be able to provide exactly what they need and an experience that their advisors want and how they’re going to interact with the clients.

Jeff Wilk:  You know, Andrew, that’s a great couple of points you made there. And it’s interesting because some of the things that I think we all see and we’re hearing from our client firms is how the world of technology has changed to the point where demands for technology solutions or technology tools are now coming more and more from the end client because of what we all experience and have access to in our daily lives, whether it’s in the financial markets or not. So, the access to tools to basically do everything on your phone is being demanded by the end clients to be brought into the financial services sector where they may not be yet. I think some of your other points there really speak to what we used to call strategic alliances, things that existed between firms, right?

And the other thing that we’ve started seeing and hearing about a little bit are the strategic alliances that individual client firms, broker dealers, RIAs, have to build into their own tech stacks if they’re not leveraging a larger platform to do that. These alliances and these strategic alignments really speak largely to, again, the access to certain technology, the access to APIs and API stores and things like that to simplify what used to be a very, very long drawn out and often difficult, if not nearly impossible integration effort for the smaller firms to do, which gave more and more, I think, ability for the larger platforms to gain traction and do more and more.

You know, it’s interesting, a term I frequently use in early parts of conversations with clients is, everyone talks about a tech stack. What I like to say is, do you really have a tech stack or is what you’re operating with today more of a tech heap, right? I mean, rarely is a firm’s tech stack needed and organized if it hasn’t been carefully monitored and maintained and fed over the number of ensuing years. And if you don’t, it just becomes a mass of technology that doesn’t speak to each other, doesn’t work well together. That has just driven the opportunity, I believe, for firms like Envestnet to step in and say, we have the solutions, we have the integration, and let us help you deploy that into your firm as you see fit.

One of the challenges, and Andrew I’ll get your thoughts on this, is this concept of digestible platforms. One of the things that we often hear about working with some of our mid-size to smaller firms, and even some of the larger firms, depending upon what they’re looking at, is that the large-scale platforms are offered out in a large-scale way. Basically, here’s the platform, take it or leave it, as opposed to what is becoming much more commonplace, a modular approach or a menu-driven approach to accessing what has become a very large functioning platform, but often out of reach economically to the mid or smaller size firms.

Any observations on that?

Andrew Stavaridis:  Yeah, it’s a very good point, Jeff. I think one of the things that again, just the history from an investment perspective is, our platform was not as modular as you were describing that it is today, right? So, a lot of times firms either had to take the entire platform or it didn’t work for them. And I think, frankly, it’s partly what opened up the door to a lot of single point solutions the last 10, 15 years, to come in and fill that spot for firms that wanted a more modular approach.

Envestnet has spent the last four or five years rethinking how our platform is working with our clients, and how we integrate with clients. Because to your point, we have large clients that leverage a significant amount of our technology, but they may want to own the overall experience. And they’re building their experiences in-house from an advisor or client perspective, but deeply integrating with APIs, our capabilities and technology to provide the base of solutions and operational workflows, but hidden between what they’re building.

Then there’s a lot of mid-size, small firms that either are looking for components that Envestnet has that they can build into their overall ecosystem, or we are able to provide a platform for them. And it goes back to my points before Jeff, around a smaller firm or midsize firm having multiple vendors. That becomes costly too, right? So, if they have to have three or four or five different vendors, or they’re using three or four or five different vendors to deliver capabilities, that’s going to cost them more because they’re not getting the scale of a single platform.

So, we do see a lot of mid-size firms coming to an Envestnet or coming back to an Envestnet and saying, you know, wait a second, this platform can help me scale my business. Yes, from an affordability perspective, it may not be a hundred percent where I want to be, but if I add up all the costs I have today with these different vendors and the cost to maintain them and the people to maintain them, a single platform that delivers the end-to-end experience, that’s delivering in the marketplace is becoming even more relevant today, especially in a market where, as you know, there’s a ton of consolidation going around in the institutional space, right? You’ve got either the large players that are gobbling up the midsize BDs (broker-dealers), you’ve got a lot of banks, that are getting out of the space and outsourcing their business or the broker-dealer business because they feel like, in order to compete, they don’t have that technology stack.

So, we’re seeing a resurgence actually around firms that say, wait a second, I could actually leverage this off the shelf platform from Envestnet and be able to now compete with those larger firms in a more scalable way to run my practice. And there are a few firms that we work with today that we’re starting to see significant growth because they’ve embraced that. They have said, I’m not going to have six or seven different offerings, I’m going to leverage invest in that. They still have an experience that they’re building on their own, but they’re able to scale it up in a meaningful way.

Jeff Wilk: No, that’s really great observations, Andrew. And I think part of what’s happening is a realization at some firms as well, right? I mean, there’s always this conversation about build versus buy, and there are many firms, who over the years have built components, some small, some larger. But I think with the realization of how these platforms have come together with the greater sets of functionality that they offer, becoming more scalable, bringing the price point down. I know we work with a lot of firms who are re-examining that strategic approach, not just build versus buy, but do we continue to maintain what we have built, or do we look to outsource? Do we look to bring in a platform partner? Do we, even in some cases, look to a higher end, if you will, an outsourced CIO type of a person to help them with their overall strategy to migrate short-term or long-term towards a new strategic model for their technology that perhaps is more robust? It keeps up with the changes much more rapidly than they could do on their own.

So, I think when we step back, and you and I have talked about this.  It’s interesting, we probably talked about it over the past couple of years. The topic doesn’t really change, it just gets emphasized, I think, is that the change in technology drives greater and greater demand to keep up, and the firms that don’t get reminded pretty quickly that they’re falling behind, whether it’s from advisors, whether it’s from their registered reps, or in most cases, worse yet, if it’s coming in from end clients who have the opportunity, because they see it every day elsewhere, who just want to move their assets, move their book of business to someplace else because of ease of doing business. Let’s just call it that.

It’s an interesting time to have the speed of technology continue to change the openness, I think, between firms as demonstrated within your own organization, to form bigger and stronger strategic alliances. The opportunities just never seem to end. And I think it continues to be a very, very exciting opportunity for firms to observe, that kind of monitor where they take an assessment of where they are.

Obviously, from an Oyster perspective, we find it very important to speak with firms who are going through these assessments, who don’t have the scale, who don’t have the in-house resources and don’t have that purview to look across the technology horizon and see what’s available to them. I think on the flip side, working with a firm like Oyster and engaging with us on things like current state assessments and technology platform reviews, digital reviews, I think we have the ability to bring in the experts within organizations such as your own, who then go deeper and deeper into the real details of the actual technology integration work.

What are you seeing in those terms and, as far as working together with consultants, working directly with IT departments, any new trends that you’re seeing there that would benefit our listeners?

Andrew Stavaridis:  Yeah, Jeff, absolutely. I think obviously you know more than most that we engage many consultants, and we’ve actually spent a lot of time with Oyster and it’s important for us. Obviously, we’re talking to our clients all the time, but consultants bring a different lens. A lot of times it gets clouded in terms of when we’re talking to clients because it’s really what they want for their specific business. And when we talk to consultants, it actually brings a broader lens to what’s really important in the trends that consultants are seeing from all these different firms. A lot of times we react to what a client wants today, and that may just be for a specific advisor. So, when we come and sit down and we listen to you, Jeff, and other consultants, we can actually piece together what we need to do going forward.

How does our roadmap really shape from a technology perspective? What is really important in the marketplace, where we see advancement? Where do we see growth and where clients really will need help in order for them to grow their business? So, from a consulting perspective, we find extreme value there. I think you’ve known Envestnet for a long time. Envestnet as a firm was always kind of this mass affluent platform. As we have evolved over the last 15 years, and especially over the last three to four years, we are engaging with consultants. We knew that we needed to go upstream. We knew that we needed to have solutions and capabilities that not only were solving for that mass affluent client, but solving for the high-net-worth clients, solving for complex clients that need tax overlay or direct indexing or alternatives, right?

So, getting there obviously was both listening to clients, but also talking to consultants. And I think you’ve seen in the marketplace today, Jeff, the types of things we’re bringing to the market, like our high-net-worth solutions capability in our technology in the UMA, our tax overlay connectivity to alternatives. Those are all things that our clients need and want. And a lot of that has been through engagement with clients, but also engaging with the consultants to really understand where we can make the biggest impact in the marketplace today.

Jeff Wilk:  Andrew, I think when all is said and done, it comes down to communications and relationships, right? That’s what this business is all about. I know we’ve spent a good amount of time today. I’m looking at the clock here, can’t believe it went so fast. We can keep going for another hour and a half if we want to, but we’ll spare the listeners that. And I want to thank you. I know I said it’s all about communications and relationships, but personally thank you for our relationship. It’s been a strong one and it will continue to be so. We look forward to not just working together, but probably having you back for part two and maybe a Part 3 down the road.

Andrew Stavaridis:  Well, I love that Jeff, and thank you for having me today. Really appreciate it. Enjoyed the conversation. We’ll talk soon.

Jeff Wilk:  Thank you again.

Bob Mooney:  Thanks everyone for listening. If you’d like to learn more about our experts and how Oyster can help your firm, visit our website at oysterllc.com. If you like what you heard today, follow us on whatever platform you listen to and give us a review. Reviews make it easier for people to find us. Have a great day.

Forward-Looking Statements

This communication contains, and the Company’s other filings and communications may contain, forward-looking statements. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements give the Company’s current expectations relating to the Company’s financial condition, results of operations, plans, objectives, future performance and business including, without limitation, statements regarding the potential acquisition of Envestnet, Inc. by affiliates of vehicles managed or advised by Bain Capital Private Equity, LP, a private equity firm, and certain minority co-investors (the “Transaction”) and related transactions, the expected closing of the Transaction and the timing thereof, and as to the financing commitments. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning. These forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, the Company.

Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected and are subject to a number of known and unknown risks and uncertainties, including: (i) the risk that the Transaction may not be completed on the anticipated terms in a timely manner or at all, which may adversely affect the Company’s business and the price of the Company’s common stock; (ii) the failure to satisfy any of the conditions to the consummation of the Transaction, including the receipt of certain regulatory approvals and the approval of the Company’s stockholders; (iii) the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the agreement, including in circumstances requiring the Company to pay a termination fee; (iv) the effect of the announcement or pendency of the Transaction on the Company’s business relationships, operating results and business generally; (v) risks that the Transaction disrupts the Company’s current plans and operations (including the ability of certain customers to terminate or amend contracts upon a change of control); (vi) the Company’s ability to retain, hire and integrate skilled personnel including the Company’s senior management team and maintain relationships with key business partners and customers, and others with whom it does business, in light of the Transaction; (vii) risks related to diverting management’s attention from the Company’s ongoing business operations; (viii) unexpected costs, charges or expenses resulting from the Transaction; (ix) the ability to obtain the necessary financing arrangements set forth in the commitment letters received in connection with the Transaction; (x) potential litigation relating to the Transaction that could be instituted against the parties to the agreement or their respective directors, managers or officers, or the effects of any outcomes related thereto; (xi) the impact of adverse general and industry-specific economic and market conditions; (xii) certain restrictions during the pendency of the Transaction that may impact the Company’s ability to pursue certain business opportunities or strategic transactions; (xiii) uncertainty as to timing of completion of the Transaction; (xiv) risks that the benefits of the Transaction are not realized when and as expected; (xv) legislative, regulatory and economic developments; (xvi) those risks and uncertainties set forth under the headings “Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission (the “SEC”), as such risk factors may be amended, supplemented or superseded from time to time by other reports filed by the Company with the SEC from time to time, which are available via the SEC’s website at ; and (xvii) those risks that are described in the definitive proxy statement filed with the SEC on August 23, 2024 and available from the sources indicated below.

Additional Information and Where to Find It This communication is being made in connection with the Transaction. In connection with the Transaction, the Company has filed certain documents regarding the Transaction with the SEC, including a definitive proxy statement on August 23, 2024. The definitive proxy statement has been mailed to stockholders of the Company. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT FILED WITH THE SEC (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION. Stockholders will be able to obtain, free of charge, copies of such documents filed by the Company when filed with the SEC in connection with the Transaction at the SEC’s website (http://www.sec.gov). In addition, the Company’s stockholders will be able to obtain, free of charge, copies of such documents filed by the Company when filed with the SEC at the Company’s website (https://investor.envestnet.com/). Alternatively, these documents, when available, can be obtained free of charge from the Company upon written request to the Company at 1000 Chesterbrook Boulevard, Suite 250, Berwyn, Pennsylvania, 19312.

The Company cautions you that the important factors referenced above may not contain all the factors that are important to you. These risks, as well as other risks associated with the Transaction, are more fully discussed in the definitive proxy statement filed with the SEC on August 23, 2024 in connection with the Transaction. There can be no assurance that the Transaction will be completed, or if it is completed, that it will close within the anticipated time period. These factors should not be construed as exhaustive and should be read in conjunction with the other forward-looking statements. The forward-looking statements included in this communication are made only as of the date hereof. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place significant weight on any of our forward-looking statements. You should specifically consider the factors identified in this communication that could cause actual results to differ. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect the Company.