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Data Analytics Moves at Orion, Envestnet Are Game Changers for Their Advisory Firm Clients

Powerful cloud-based analytics from Snowflake and Amazon Web Services' Redshift will empower advisors, according to our tech columnist.

I was pleasantly surprised by unexpected news this week when Envestnet announced it was launching a Wealth Data platform to accelerate “the growth of its Data and Analytics business.”

This platform will be a cloud-based data intelligence offering for “wealth advisory firms,” which I take to mean for RIAs, hybrid firms and independent broker/dealers, since the announcement refers to its being intended for “home offices and financial advisors.”

The platform is meant to connect all of the data sources across a firm’s practice on one platform.

Making this possible is Envestnet’s partnership with cloud data and analytics provider Snowflake.

My emotional reaction to this news came on the heels of two different discussions with several executives at Envestnet competitor Orion over the past two weeks.

Orion had reached out following its invite-only Fuse Innovation Summit held in late September to bring me up to speed on the major developments to come out of that gathering: namely (you guessed it) a new data and analytics program for its own advisory firm clients.

Fuse, which, with the exception of the past two years of COVID when it was not held, had become something of an annual hackathon supported by Orion’s engineers with collaboration from the tech professionals of advisory firm clients and third-party integration partners.

This year’s event was all about sharing its expertise with Amazon Web Services’ Redshift cloud-based data warehouse repository.

In a nutshell, Orion employs AWS for housing its data and Redshift for processing and some of the analysis (it has more tools and offers others to advisors).

I’ll go into additional detail about this in a later piece, but suffice it to say that using Redshift’s technology and AWS, Orion client firms can make similar use of it to analyze their own firm-level data, which can be replicated, clustered and firewalled off for their own use.

“This is a game-changing technology because they have access to their data real time,” Eric Clarke, CEO of Orion Advisor Solutions, told me two weeks ago.

“What’s cool with that is that they [client advisory firms] can create custom views—we have for Orion [internal use]—and it is huge that they are able to determine how much they want to pay to use and consume that and can control it as well,” added Brian McLaughlin, president of Orion Advisor Tech, who served as CEO and founder of CRM provider Redtail Technology for just shy of 20 years prior to its acquisition by Orion, which was announced in April and completed in June.

For its part, Envestnet with its Snowflake integration and partnership also will be able to provide and empower similar data collaboration capabilities to its customers’ firms.

And much as Orion’s client firms can bring in outside data sets, so too will Envestnet’s into its Wealth Data Platform, where it can be combined, normalized and used in concert with information on Envestnet’s platforms.

You will find no shortage of IT experts extolling and comparing the benefits and shortfalls between Redshift and Snowflake, but both are powerful and are sure to usher in a new era of analytics abilities for not just Orion and Envestnet themselves but also their clients.

The ability to scale data storage in the way cloud data providers like Amazon Web Services, Google and Microsoft can—and at comparatively low cost—is something few techies would have believed possible a decade ago.

And similarly, the ease and speed with which large and extremely large data sets can be replicated, partitioned and even permissions managed, is extraordinary.

“We see this as a boon for midsize firms,” said Clarke, noting that the 75 attendees representing approximately 20 advisory firms who were learning and experimenting at Fuse’s more technical sessions would be able to rapidly take advantage of the developments (several client firms have already been doing so for months, he added).

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