Envestnet finally shared details on how exactly advisors will be able to take advantage of the company’s $590 million acquisition of data aggregation firm Yodlee at its annual Advisor Summit in Chicago last week.
Industry analysts, Envestnet customers and Wall Street investors have all been asking the “why Yodlee” question since the deal was announced last August. But Envestnet Yodlee vice chairman and chief executive Anil Arora laid out concrete examples for how Yodlee would improve an advisor's practice.
“This is not technology for the sake of technology,” Arora said. “This is for you to get a greater share of assets.”
Arora announced that Yodlee completed an initial integration with the Envestnet platform, and in July clients will be able to aggregate all of their accounts for a more holistic view of their finances using Yodlee’s FastLink tool. Yodlee will update the information daily and deliver the data seamlessly to account opening, reporting and goals-based planning tools.
Yodlee is also making available its ecosystem of personal finance tools, which it calls “FinApps,” that take advantage of its massive data flow to automatically run various tasks like budgeting, a consolidated balance sheet showing net worth across all accounts, and cash flow analysis.
“[FinApps] allow your clients to see the progress they are making towards their financial goals,” Arora said. “What it does for you is increase client engagement, strengthen loyalty, increase retention … all of which helps you get an increased share of assets and increase share of wallet.”
These apps are a part of Investor Suite, a new, upgraded set of cloud-based tools that incorporate the existing features of Advisor Now. Investor Suite also updates user navigation and adds a planning module that includes goal tracking and alerts. Arora said the apps take advantage of analytics gleaned from more than 21 million users executing billions of transactions across thousands of organizations.
The upgrades will roll out in July and will eventually make their way to the Tamarac platform.
A look at some of the @Yodlee apps coming to the @ENVintel advisor suite. #ENVSummit pic.twitter.com/pkIcMoFSKX
— Ryan W. Neal (@ryanWneal) May 19, 2016
Arora added that Yodlee, unlike other data aggregators, relies on data pipelines built directly into financial institutions rather than scraping it, allowing it to be faster and unaffected if firms close off their data.
It’s all part of what Envestnet CEO Jud Bergman said is thinking several moves ahead in a chess game to remain relevant in an era of rapidly evolving technology. He said the idea of singularity, a hypothetical moment where artificial intelligence becomes better than human intelligence, has always fascinated and frightened humans, but the truth is that “computers are powerful idiots.”
“What if instead of man versus machine, it was man and machine,” Bergman said. “Experts can focus on strategy, creativity and productivity instead of wasting time on calculations.”
Drawing inspiration from chess grandmaster Garry Kasparov, who became the first world champion to lose to a computer, Bergman introduced what he called the Kasparov Principle: “Experts and machines deliver better outcomes than experts or machines alone.”
To that end, Envestnet also revealed Open ENV, an opening of Envestnet’s technology to allow firms to create customized implementations of Envestnet products, accelerate integrations with third-party technology, and make Envestnet available to more advisors.