After laying the groundwork for more than a year, Envestnet expects to launch an embedded investment solution for advisors before the end of 2022, Dani Fava, head of strategic development at the company, said Thursday at the Envestnet Advisor Summit in Charlotte, North Carolina, during a session called "Connected: The Future of Personal Finance."
"We're very close to launching the embedded investment solution," she said, in response to a question from ThinkAdvisor. "We think that'll be ready some time before the end of the year. Let's call it third quarter."
Through embedding, financial services can be offered through the consumer apps and websites of nonfinancial firms such as Apple.
Fava likened embedded finance to stores placing items near the checkout counter. The same practice is used in apps and on websites, she pointed out.
There is a huge opportunity for financial services firms who find a way to change impulse behaviors to more positive things like saving money and investing, she said.
That can be accomplished by embedding financial services inside loyalty apps, game apps and anywhere else consumers are spending money, she said.
Embedded lending, for example, can be used to help investors decide whether it's more expensive to take out a loan or liquidate a portfolio to access money you need, she said.
Personal Finance Everywhere
The focus of Fava's presentation at the company's first in-person Advisor Summit since 2019 was on the potential impact that embedded finance and other disruptive technology stands to have on the future of wealth management.
"Personal finance is about to become ubiquitous. It's going to be in everything we do," she predicted. "Every decision that we make. Every app that we open. We're going to be so connected. Everything will be embedded."
While the digital revolution has increased efficiency, it's also "caused a lot of confusion," she said.
Pointing to recent data, she said the average person has more than 80 apps installed on their smartphones and it seems like the younger you are, the more apps you have.
In 2021, people spent a collective 3.8 trillion hours using apps on their mobile phones and there are 2.9 million apps on the Google Play Store alone, she said.
"We are drowning," she said. "There is so much, so many disconnected pieces clamoring for our attention," she said.
Super App
And what comes next? She predicted more consolidation in the fintech sector and overall financial services industry. But despite the consolidation that's already happened, there remain separate apps for credit cards, investments and lending, she noted.
But "those days are behind us," she said, predicting: "We're about to enter into an era of the super app. We're going to see apps where we can do literally everything, including all of our financial services decisions in one place."
