It seems as if new and revamped versions of Web-based platforms are constantly popping up as providers attempt to come up with just the right products and tools for advisors. According to Bill Crager, president of Chicago-based Envestnet Asset Management, which provides such services as online proposal generators and Web-based reporting tools for financial institutions and independent advisors with clients at all asset levels, there are four major trends in the industry that are pointing advisors in the direction of these investment platforms. First is the strong movement in the independent marketplace from a traditional commission-based business to a fee-based model. “Advisors are shifting rapidly to a fee-based business model and the platform is what’s enabling them to do that,” he says.
The second trend deals with demographics–investors are aging. “Therefore,” Crager explains, “the bulk of assets that are being invested or will be invested are of a retirement nature. Clients are looking for preservation and longevity of capital, and then accumulation.” He goes on to say that in response to this need, advisors are frequently using fee-based solutions to address their client’s needs. Crager’s third reason why platforms, like Envestnet’s, are becoming so popular is because advisors are “moving from captive environments to independent environments.” He notes that advisors are in need of technology support when they go the independent route, which the platforms provide.