It is clear that Envestnet has not yet fully absorbed its new independent subsidiary, PIEtech, as separate announcements emerged from each Tuesday. Envestnet is introducing a program to support advisors in facilitating loans to their clients, while PIEtech announced availability of its MoneyGuideElite tool for advisors. Called Envestnet Credit Exchange, Envestnet has partnered with Advisor Credit Exchange to provide the new lending service. PIEtech's MoneyGuideElite announcement, on the other hand, outlines how its new offering will help advisors planning around insurance needs, a result of integrations with major insurance technology solutions that encompass total income modeling and annuity analysis.
The two announcements come as Envestnet is racing to bring PIEtech and the MoneyGuide lineup of products into the fold of the growing wealthtech firm by the self-imposed deadline of midyear.
For advisors engaged in financial planning, PIEtech's new “more sophisticated” planning Elite product was originally scheduled to launch prior to the beginning of the month with its two key income modeling features and a module intended to catalyze conversations around life insurance.
Its “secure income modeling” feature helps advisors and clients gauge whether an annuity is the right fit for a financial plan by identifying and analyzing the trade-offs inherent in annuities, relative to other assets clients may hold. The “total income modeling” set of features helps advisors illustrate a client’s cash flow during the decumulation phase of their retirement. The “advanced lifetime protection” module, which will eventually include integrations with partnered insurance technology companies to provide a seamless transition from recommendation through implementation, is aimed at making discussions around insurance options with clients easier for advisors.
With insurance sitting front and center in both MoneyGuideElite and the Envestnet Insurance Exchange portal, currently in its pilot phase and with a planned June broad-market release, advisors should expect tighter integration between tools, according to PIEtech representatives. In fact, there are plans for integrating “leading insurance technology companies” with MoneyGuideElite, which will also be connected to the Envestnet Insurance Exchange, confirmed representatives for PIEtech. Timing for this is “still to be determined” and PIEtech declined to share which insurance technology companies would make it onto MoneyGuideElite’s platform, noting that “formal plans” are still materializing as the acquisition continues.
Meanwhile, advisors who incorporate lending into their wealth management practices will be able to use Envestnet Credit Exchange to connect select lenders with Envestnet enterprise clients. Advisors will be able to use a “streamlined screening process” that will output immediately available loan offers for their clients, with clients then directly referred to lenders. End-clients who opt into the service will permit Envestnet | Yodlee to distribute data to potential lenders about the client's investment accounts, bank accounts and even client financial behavior to build a picture of creditworthiness. Third parties will help benchmark the data, according to Bill Crager, chief executive of Envestnet Wealth Solutions and co-founder of the firm. Envestnet plans to have single sign-on access available through the firm’s platform, which he expects will launch around the end of Q3 or beginning of Q4 of this year.
Providing advisors with a solution for extending loans gives them an offering on par with banking institutions, said Peter Stanton, founder of Advisor Credit Exchange. “The ability to provide advisors with multiple loan options for their clients in a real-time, prequalified manner is noteworthy,” he said. “It significantly enhances the advisor’s capacity to provide a fully integrated wealth management solution.”
Advisors will be able to review prequalified loan offers for their clients using Advisor Credit Exchange, according to the firm’s website. “The risk of credit-decline and concerns about competitive pricing are effectively eliminated—or at a minimum substantially reduced” for the advisor, noted the site. Advisors “will know, in advance of speaking with a client, what loan options are available in a prequalified fashion with loan pricing clearly presented.”
Advisor Credit Exchange is actively “assembling a select network of approved lending organizations that are interested in receiving originated loan transactions,” according to the firm's site. Crager declined to disclose which companies would be offering loans, but his firm has been here before. The process of assembling Envestnet Insurance Exchange would provide a "big headstart" in nomalizing the information flow between lenders and Envestnet, said Crager.
For now, credit options under consideration for the eventual launch of the tool will be consumer loans, like securities-based loans and loans backed by residential real estate, fine art, and other luxury assets and unsecured personal loans. Envestnet hopes to offer commercial and business loans in the first half of 2020, said Crager. "A lot of our advisors are focused in the small business market. We believe it really creates a capability from retirement to credit services and insurance services [for] small businesses," he explained.
"The key is to step back and to look at the combination of capabilities that we're trying to bring together to empower that advisor to deliver a different level of advice and really encompass the needs of a household," said Crager. "It is all around this unified, integrated advice model."
A preview of Envestnet Credit Exchange will be available in early May at the firm's advisor conference.