Envestnet Reveals New 'Personal Financial Ecosystem'

On one hand, "you have the wealth gap just broadening very rapidly," but you also have a community that's "served well and will be served better by technology going forward — the folks who have money," he said. However, "everybody else is left to try to figure that out for themselves," Crager said.

The company's "thesis is… that there are consumer apps that Envestnet can build that will go out into the greater marketplace — meaning the consumer marketplace — for consumers to educate, understand and then ultimately [use] to network and connect back to the advisors who work with Envestnet," he said.

Through the firm's algorithms and matching based on specific criteria, "We can do a very good job of connecting human beings to financial advisors if they want one," Crager added.

At the same time, Envestnet can "help educate consumers more about finance" and get them to be "more comfortable with money — to feel some sense of confidence around money, to learn more — and then take the steps to begin to manage their finances into something that's more coordinated," he said.

More Advisor Tools Details

A test group of advisors have been using Envestnet's new advisor environment, he noted, adding: "We're getting that feedback. We're enhancing [it], and then we'll launch."

Asked if advisors who aren't in Envestnet's user base will be able to access the new tools, Crager said: "I hope so…. I want it to be an open network."

Life events such as the loss of a parent or spouse, the launch or sale of a business, a marriage or the birth of a child are moments when investors most need a financial advisor, he explained. 

The related capabilities of Envestnet's new tools "will be the super high value" of the offering, Crager said. Everyone benefits from a "human connection" and "emotional support" when it comes to big decisions tied to life events, he noted.

Envestnet also wants other firms and technologies to be part of the ecosystem it's helping to build. "We want the asset managers, the insurance carriers [and] the banks all to be part of" the modular capabilities it's creating, so advisors can "meet the needs of their practice."

As these needs change each year, advisors can remove and add to what they are using. The firm's fee structure will likely adjust as the tools are launched and "begin to change" over time based on platform usage, he added.

More Consumer App Details

The consumer app will be like a "stepping stone," the CEO said. "I don't envision that being something that we'd charge a subscription for."

"Where we're going with the consumer app is to help individuals who don't have the financial background or experience to gently come into that environment, be able to ask questions, find support and then we can help lead them back to the right environment that can serve them," he explained.

The company is looking to "empower financially underserved communities," according to the white paper.

Also, the consumer apps will not be Envestnet-branded.

"What we've been doing is making investments in innovative companies that can get to market very quickly," Crager said. 

This means "we'll be an investor in the app," like the firm previously has done with its credit and insurance exchanges, he noted.

Why not put the Envestnet logo on the planned consumer app? 

"One [reason] is that we're not a consumer company. We don't really want to be a consumer company… you need [a specific] DNA to be successful [in that area]," Crager explained.

A second reason "is that we want to move fast and … a smaller group of individuals who are just focused on that from the time they wake up until they go to bed… just moves faster" that Envestnet, he added.

Asked if Envestnet had already invested in the firm building the app, Crager said: "We're exactly right there."

(Pictured: CEO Bill Crager of Envestnet.)