Envestnet began life in 1999, and over the intervening years has grown from providing advisors with access to a host of separately managed account managers to offering a broad-based wealth management platform with tools to help advisors grow not only their investment options for clients but their businesses as well. On Thursday, July 29, Envestnet entered a new phase as a public company under the ticker ENV on the New York Stock Exchange. After ringing the opening bell that morning, Group Editor-in-Chief Jamie Green spoke by telephone to founder, chairman, and CEO Judson Bergman, who took the time to talk about his priorities and Envestnet’s future.
Green: What does the IPO mean for Envestnet, and for the advisors and enterprise-level firms that use the Envestnet platform? Will it be business as usual?
Bergman: Basically, it will be more of the same. We see [going public] as evolutionary, it enables us to continue to do what we’ve been doing. We enable financial advisors to provide a higher standard of care for their clients, with a robust, thoughtful wealth management platform offering. It’s taken us 10 years to grow to servicing over 19,000 advisors and we support more than $100 billion on our platform. We expect that having a public currency, having additional resources, we’ll be able to continue to grow and maybe even accelerate that growth.
We enable advisors to deliver this fiduciary standard, this higher standard of care, what’s in the best interest of their clients, and not just what is suitable
Advisors are increasingly figuring out that the end investor they want to serve expects their advisors will have their best interests in mind, and not just sell them something that’s suitable. As advisors have recognized this, they have transitioned their practices away from commissions toward fees, and those who are fee-based are looking for ways to do that more effectively, more efficiently, and in an integrated manner.
The world is coming our way, and having a public currency and additional cash is just a way to help meet those advisors’ needs who are trying to transition their practices toward that higher standard of care.
Green: When you use the term ‘advisors,’ you’re referring to the wide range of advisors you serve on your platform–from RIAs to independent B/D reps? Some of them have already assumed a fiduciary responsibility, but many of them are scrambling to figure out how to comply, and feel they can’t wait six months to see what standards would be imposed on them–to see what the SEC has to say about that standard of care. (The SEC recently sought such comments as part of its six-month study of advisors and brokers’ obligations to clients.)
Bergman: You’re right; we serve financial advisors with many different practice patterns, but almost all of them are independent advisors, and they’re independent for a reason. They’ve been able to succeed on a unique value proposition. One of the things we do very well is to adapt and configure our core platform for those practice