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Financial Planning > College Planning > Student Loan Debt

Envestnet MoneyGuide Adds Riskalyze, College Planning to MyBlocks

By Jeff Berman

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Envestnet MoneyGuide continued to widen its MyBlocks financial wellness ecosystem Wednesday, this time introducing a Risk Number block that’s part of the firm’s expanded partnership with the fintech firm Riskalyze.

It’s the 31st block of information available to advisors as part of the MyBlocks ecosystem, Envestnet MoneyGuide said.

Also planned, by the end of 2019, will be the launch of its previously discussed Kickoff block targeted at high school-age children of advisors’ clients as part of Envestnet MoneyGuide’s ongoing efforts to offer advice to young people about their education and career options, as well as educate them about college loans and student debt, according to Tony Leal, Envestnet MoneyGuide president.

The new Risk Number block is part of a MyBlocks integration with Riskalyze’s platform that allows advisors to “pinpoint an investor’s Risk Number in an effort to build a portfolio containing an appropriate amount of risk,” the companies said in a joint announcement. The integration — one of the first outside of the Envestnet network — “creates a seamless connection between a client’s Risk Number and the other blocks available on the MoneyGuide platform,” they noted.

The new block “will walk the investor through” a Riskalyze questionnaire assessing a client’s Risk Number and then import into MoneyGuide’s platform as a risk tolerance score, the companies said. The advisor can then assign an appropriate risk score for a household and streamline the investment decision-making process, they said. Based on that, the advisor can opt to create a new financial plan or rework the current plan, using the Risk Number to determine the appropriate investments to help reach the client’s goals, according to the companies.

Discussing risk of a somewhat different type during a phone interview with ThinkAdvisor, Leal pointed to the massive cumulative student debt crisis we’re facing in the U.S. and explained how MyBlocks can be used as one way to help students and their families be more aware of the impact of taking out college loans — importantly, before they take out those loans.

It’s been estimated that cumulative student debt in the U.S. was more than $1.5 trillion in 2018, making it second only to mortgage debt, with the average college graduate starting their careers after college $25,000-$30,000 in the hole.

Envestnet MoneyGuide has already been offering a Pay Off College Loans block as part of its Financial Freedom group of blocks for several months, Leal pointed out.

But the Kickoff block will allow the high school-age children of advisors’ clients to register and use MyBlocks, he told ThinkAdvisor. “It will help them kind of see the tradeoffs between going to trade school, going to a two-year college,” a four-year college or military school, “so they can kind of project the different career paths that they may” select and “get some idea of what the cost will be” before being faced with the actual expense to figure out if they can afford a loan or not, he explained.

One important factor for students to figure out is if the career path they’re planning is “equitable with the amount of debt that that career path comes with,” he pointed out, adding that “what’s missing now” in many families is having a conversation about these issues. After all, it can take many years for a student to pay off debt if they’re planning a career that doesn’t traditionally pay a whole lot, and students need to know and understand that, he explained.

Since releasing MyBlocks in July, advisor usage has been “exceeding our expectations,” he went on to say, noting his company is, as expected, seeing the platform being used by RIAs, mid- and small-size banks and midsize and large broker-dealers. But it’s also being used by advisors at large national banks, he said.

The company is already on pace to have total blocks numbering in the “mid-40s” by the end of 2019, Leal said, even higher than the more than the 35 he projected when we spoke in July. The firm is putting a new block out “about every three weeks,” he noted.

Up next is an expansion beyond the U.S. for MyBlocks, he told ThinkAdvisor, noting the biggest surprise so far has been the interest seen in other countries. He projected MyBlocks will become available for advisors in two additional countries in November.

Jeff Berman

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