Posts Tagged John Yackel

How Leading Wealth Management Firms Are Integrating Their Offerings

As banks look for tangible business results from their wealth management organizations, industry leaders are finding new ways to leverage outsourced solution providers to capture near-term savings, higher-velocity sales and ultimately richer margins.

Want to brag about how you’ve been using your platform? Click the globe to participate in the next Envestnet WMS industry survey.

We believe that if you were to look at the strategy white-boards of leading banks’ wealth groups, faster growth and better scale would be at the top of all of them. Many are consolidating efforts with greater focus to achieve these goals. According to our most recent bank wealth management industry study, these focused organizations are finding synergies and value by bringing their wealth programs together that go beyond just product.

They are creating more unified cross-channel experiences for both advisors and clients across what were previously separate, costly and unintegrated platforms. This has been a recipe for success.

Critical Mass: More Than a Sum of the Parts 

The challenge is that most wealth management organizations confuse size with “scale.”

As firms have grown via organic and inorganic tactics, few have taken the time, or have the time, to rationalize overlapping, duplicative technologies.

Even fewer have worked through complex, political issues that led to organizational silos, unclear client segmentation, varying servicing strategies, and separate platforms.

As a result, structures that can and should create sustainable competitive advantage have hindered many of these institutions from real transformation, leaving them exposed to economic challenges that market returns and M&A are unable to hide.

The sad fact is that while the numbers get bigger, instead of achieving economies of scale, firms add cost and complexity. “Convergence” may show up in the press releases, but unless management embraces true change, integrates the silos, and demonstrates higher results, “convergence” is just a word.

Critical mass is possible. The latest numbers from the Aite Group1 indicate that producers can double the amount of time they spend working face-to-face with clients and prospecting new ones when firms simply standardize and integrate the technological base. Findings from our study indicate that front-office professionals spend only one-third of their time in a client-facing capacity – barely half the hours management wants to see to hit production targets.

Across a multi-channel institution, that may mean getting one or more broker-dealers, a trust department, a RIA network and a high-net-worth family office, or a private banking unit on the same integrated wealth management platform, while still being able to service the unique needs of those channels.

Once upon a time, switching the clearing platform or some other piece of the back office would trigger mass defections. The world has changed.

Now, with improved technology the industry has to offer, multiple front offices can all work off a common shared chassis without causing significant disruption in terms of the way end users interact with their data and do their jobs.

From their perspective, nothing necessarily has to change. For the CFO, the top-down benefits are both immediately apparent and potentially immense. Instead of having to support multiple platforms, the entire enterprise now only needs a single engine flexible enough to meet the unique needs of each business line.

In this setting, true efficiencies of scale can actually emerge and improve, fostering more consistent client experiences that may extend across the organization over time. At the advisor level, client-facing staff can recognize opportunities to refer accounts into each other’s wheelhouses and otherwise stay out of each other’s way. An integrated wealth management platform supports better partnering across business lines and helps facilitate a more consistent client experience so that whichever “door” a client comes through or enters in the future, they have a similar experience.

Compliance can also be centralized and even automated to the fullest extent possible, managing cost bloat on that side before it becomes unsustainable. By leveraging a common and unified platform, management can track all costs and revenue, monitor activity, and attribute results to the right business units.

A Foundation, not a Constraint

With recent advances in platform solutions, even the largest global wealth management firms can achieve scale through outsourced solutions.

In the past, industry limitations forced the largest firms to build and customize their platforms internally at great cost. Even attempts to cobble together disparate point solutions often became multi-year efforts, draining limited available IT resources and ultimately falling short at the advisor and client levels. Moreover, the firms’ technology areas face challenges in trying to keep up, in a timely manner with new and trending changes in functionality and solutions.

But the platforms themselves have evolved. Envestnet’s recent platform development efforts, for example, have focused on multi-currency capabilities that would have been prohibitively expensive to develop internally ten years ago. These capabilities enable institutions to help follow capital across national borders and around the globe. That might be a little ahead of the curve for more traditional money centers, regional banks and boutique wealth management firms, but it demonstrates the importance of finding an operational platform that can evolve with you and your clients.

Wealth managers we talk to intuitively grasp that once the back office is robust and the investment architecture opens up, tailoring customer experiences becomes relatively simple and scalable. Services can roll in as needed to fit an individual client’s needs or target a particular market segment. Pricing for Total Value takes center stage because you are now able to demonstrate and operationalize the full value your organization can bring to a client’s full range of needs.

It’s not about legacy organizational factors or your own allegiance to one business model or regulatory framework over another. A trust company, a RIA, a brokerage firm or a family office all end up building portfolios out of the same basic moving parts. The reporting engine is the same.

At the rate the industry is changing, that front end may look very different in ten years, five years or even shorter. Mergers, acquisitions and organic evolution may bring new technology to the platform that duplicates what’s there now.

As long as the foundation is flexible enough to absorb the best additions and help meet the unique needs various channels within an institution may have, the result can be clarity instead of confusion.

Needless to say, any true foundation is also a stabilizing force.  It’s important for firms to align with stable platform partners that are on the right side of industry trends. Consolidation is positive. Disruption is not.

A Relevant Example: Mobility

Today, having access to a platform on an iPad or other tablet is becoming table stakes. Modern investors are now looking for the same convenient and continuous access to the portfolio that high-net-worth individuals already expect from all segments of their lives. Seamlessly rendering the client experience in a tablet environment has proven to be almost elusive for many firms with disparate point solutions. This changes significantly when a firm goes the route with a unified and integrated platform.

Envestnet makes a ubiquitous digital experience available to our clients as part of our core offering, because the advisors and portfolio managers we work with understand that their roles as “trusted advisors” are now more relevant than ever. They also recognize that clients want a multi-channel relationship that provides the information and advice they want, when they want it.

A mobile approach also lets the advisors build bridges within the wealth management organization and create more holistic client outcomes across traditional silos. Unified delivery improves client satisfaction while helping advisors achieve their own potential through a more collaborative experience. Institutions that ignore this emerging truth only hurt themselves as they try to recruit and retain the best advisors who now have more career options than ever.

Critical Mass Is Here

As you can tell by this article, I am passionate about tearing down industry silo mentality because I’ve seen how much power real convergence can liberate.

The most successful firms we talked to in our last best practices survey tended to share two striking commonalities:

1) They are creating excess capacity via an integrated back-to-front technology platform and leveraging that capacity to create a higher-performing sales culture to improve growth and profitability across segments.

2) Early results indicate these firms experience a growth curve averaging double what everyone else has achieved.

Executing on the vision

Especially in the banking channel, wealth organizations have been bombarded with software sales people, fund wholesalers and trust accounting service providers that continue to sell vertical applications with their respective “value proposition.”

This industry is crowded with vendors that lack the vision and ability to deliver an open architecture unified platform that will truly deliver significantly improved results across the firm, the advisor and the client.

The opportunity for real transformative change is finally here.  The industry trends are clear – Convergence and unification will provide the real results that incremental consolidation can no longer deliver.

From what we are seeing, wealth managers can now get out of the software integration business at last and refocus on the delivery of their unique value proposition. Scale, efficiency and consistency are finally a reality, even across multiple channels or client segments.

Transformation is never easy, but true leaders and visionaries typically come along at these inflection points and take advantage of dislocations in the marketplace and leapfrog others that use the challenges as excuses.

Our new Envestnet WMS 2014 Industry Survey is collecting responses now, so you have a chance to share your best practices and brag about how you’ve been harnessing your platform in search of success.  Please visit us at to participate.

¹In April of 2013 the Aite Group published a report that was commissioned by Envestnet | Tamarac – RIA Productivity and Profitability: Integration Pays


Envestnet, Inc. (NYSE: ENV) is a leading provider of unified wealth management technology and services to investment advisors. Our open-architecture platforms unify and fortify the wealth management process, delivering unparalleled flexibility, accuracy, performance and value. Envestnet solutions enable the transformation of wealth management into a transparent, independent, objective and fully-aligned standard of care, and empower advisors to deliver better results.

Envestnet’s Advisor Suite® software empowers financial advisors to better manage client outcomes and strengthen their practice. Envestnet provides institutional-quality research and advanced portfolio solutions through our Portfolio Management Consultants group, Envestnet | PMC®. Envestnet | Tamarac provides leading rebalancing, reporting and practice management software.

For more information on Envestnet, please visit

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UMA Providers Dazzle Wealth Advisors with New Upgrades that Manage Market Volatility Risk

As global markets buckle on fears of new financial meltdown, managed accounts vendors entered the scene promoting new technology to allow better allocation and diversification of client accounts to minimize damage in worst-case scenarios.

Last week, VIPs from the unified managed accounts industry met in Boston to announce new product offerings and a shift in direction when it comes to advisor support.

The Trust Advisor was there to talk to some of the most influential leaders in this area.

“Keep it simple” was the rallying cry for the managed account industry as platform providers finally see their efforts to liberate model-only investing from a once-impenetrable maze of jargon start paying off. Read the rest of this entry »

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