Keeping the Customers Satisfied

“Thirty-eight of the top 50 broker-dealers use our platform,” boasts Lori Hardwick in an understated way, but “we’ve seen new interest from aggregator firms of breakaways.” Hardwick is Envestnet’s managing director of advisor services and an 11-year veteran of the firm, responsible for sales to broker-dealers and RIA firms, but also for on-boarding advisors to the platform and training them to use its many features.

RIAs, she says, are an important part of Envestnet’s client base, and in fact the company’s roots are in the RIA world, while broker-dealers, “who didn’t trust us” at first, she recalls, came later. “RIAs forced us to go to open architectures from the beginning,” she says, and after the company acquired Portfolio Management Consultants (PMC) in 2001, which had more than $5 billion in assets, that “pushed us out of startup mode, and then the broker-dealers found us.”

What they found was an ever-changing platform which she says has more than 700 points of configuration, so what each broker-dealer or individual advisor sees on the platform is unique to each user. Moreover, the platform is upgraded quarterly, based in part on what current users suggest. Hardwick says she meets with advisors at least once a month personally. “Our best ideas,” she says, “always come from our clients; they’ve never steered us wrong.” Her group has an advisors’ council of some 20 RIAs and broker-dealer reps who gather for twice yearly meetings, and two-day “Alliance Conferences” with broker-dealer home office personnel that attract about 50 attendees.

Broker-dealers, she says, are looking for ways to “streamline their businesses, especially if they’re multi-custodian,” so the platform performs pre-population of paperwork. The home office also wants to “see where clients have signed off on risk tolerance,” and the platform informs them when a portfolio needs to be rebalanced. BDs are also warming up to the unified managed household (UMH) concept, she says partly because of the “sleeve-based accounting,” referring to single strategies within a broader client account, which Envestnet offers. “We’re the only one who offers that,” she says. “We didn’t offer a UMA until we had that capability.”