Envestnet Takes Aim at Big Data

Big Data is all the rage, but taming all the information flowing through the world’s computer networks, mobile devices, social media channels and so on is a huge job.

Chicago-based Envestnet, among a handful of others, is trying to help retirement plan advisors and others in the finacial services industry corral all of that data. The publicly traded wealth management software company does so, it says, by looking at Big Data from a different perspective.

“(The term) Big Data emotes this NSA prism that we are taking from you and not giving back,” said James Patrick, executive vice president, advisor-managed programs for Envestnet. “We are the opposite of Big Data. We are taking data and making it actionable.”

That’s good, because anyone who can answer with clarity and authority the questions retirement plan advisors and their clients ask routinely is bound to do well.

Envestnet, in fact, is long accustomed to capturing the industry’s attention, as well as Wall Street’s. Launched in 1999, the company today has more than 16,000 advisors who have fee-based assets under management or administration on its platform.

The company’s shares jumped in early July by as much as 13% after it closed on a $10 million cash acquisition of Prudential Wealth Management Solutions. The deal includes contingent consideration of $23 million in cash to be paid out over three years.

Envestnet announced its move into Big Data early this year, dubbing it “Envestnet Intelligence.”

Envestnet, of course, isn’t alone in recognizing the potential of turning Big Data into something useful. Companies as large as IBM have been plying these waters, as have a number of startups.

The research and consulting firm Celent explored the potential of Big Data in the financial services industry in a recent report, “Big Data in Wealth Management: The Search for Customer Insight.”

“Many wealth management firms have begun to examine Big Data and analytics solutions; some are at exploratory stages or early stages of deploying solutions,” the report said. “Celent expects the industry to catch up as more firms discover additional insights about their customers that can help increase retention.”

The big challenge for anyone in this field is finding ways to make all of that data understandable for clients. It does no good to hand over a report filled with undecipherable numbers.

Envestnet, its executives say, understands that.