Wow. A year doesn’t go by without a “headline” technology acquisition, merger or partnership that involves a company focused on serving the technology needs of advisors.
Already, 2019 will be remembered as the year that MoneyGuidePro was acquired by Envestnet for $500 million. Of course, the advisors using the technology product involved are directly impacted — hopefully in a positive manner. But there certainly is more to any transaction story than just the direct users. Let’s discuss some of these other details and look at some of the ways such deals affect our profession.
Whenever a technology deal is announced, it gets a lot of attention. This makes sense because many of these stories involve products that were created by people who were simply trying to address an immediate need. And this often begins with limited resources.
Then they start the next chapter for their companies with a positive liquidity event and frequently with a shot of new resources.
Needless to say, there are PowerPoint strategy presentations being updated on a regular basis that list each of these past technology deals. Aside from the commonplace beginning with someone who is passionate about providing a solution that helps advisors better serve the needs of their clients, any new company needs to be economically viable at some point.
Therefore, all these past technology deals help to define the “economic” opportunity for others, and they provide further support for an entrepreneur looking to start a new company. Ultimately, the good news is that this is just another reason why advisors continue to see more choices of technology companies that want to earn their business.