Envestnet and RiskPro are partnering on a new integration planned for early 2021 they say will enable advisors to build and manage client portfolios with reduced regulatory risk.
The strategic relationship between the fintech firms will “allow RiskPro’s proposal generation, portfolio construction, and automated risk surveillance software to function within existing enterprise workflows on the Envestnet unified advice platform,” they said Thursday in a joint announcement.
RiskPro’s Perpetual Suitability software will be offered to Envestnet’s enterprise customers when the integration goes live, helping advisors’ clients determine their own Personal Risk Budget using a fully documented process that clearly defines risk in terms clients can understand: maximum annual dollar gain or loss potential, according to the companies.
When a client’s PRB has been calculated, advisors affiliated with Envestnet enterprise customers will be able to make investment recommendations with a 98% statistical probability that maximum risk tolerances will not be exceeded within any given 12-month period, they said.
RiskPro’s technology enables each enterprise to set its own surveillance rules for monitoring the risk of a client’s portfolio, as compared to the client’s PRB, on a daily basis. Advisors and enterprise home offices are alerted if the risk of a client’s portfolio falls outside the surveillance rules set.
More than 105,000 advisors across more than 5,100 companies — including over 500 of the largest RIAs, 17 of the 20 largest U.S. banks, 47 of the 50 largest wealth management and brokerage firms, and hundreds of fintech companies — now leverage the Envestnet platform to grow their businesses and client relationships, it says.