Last month’s Envestnet Advisor Summit covered a range of new developments, from closing of the MoneyGuide acquisition to a roadmap of Apprise Labs’ new planning tool. But few breakout sessions, roadmaps or executive fireside chats were met with as much enthusiasm as the standing-room-only session introducing the firm’s Insurance Exchange, which has exited the pilot stage and is available through Envestnet advisor and sponsor portals.
Early last month, advisors and home office personnel crowded into the session as executives from Envestnet and the firm’s partner, Fiduciary Exchange, LLC (FIDx), laid out plans to move the insurance portal out of its pilot phase. The portal integrates with Envestnet’s wealth management platform and is designed to bring insurance products directly into an advisor’s practice, with initial carriers Allianz Life, Brighthouse Financial, Global Atlantic Financial Group, Jackson National Life Insurance Company, Nationwide and Prudential Financial offering a variety of annuities. “Roughly a dozen firms” provided feedback during the pilot, said a company spokesperson.
The new portal is part of Envestnet’s overall focus on “financial wellness,” a phrase the company is emphasizing as it incorporates components like insurance, and eventually advisor-facilitated loans, into its offerings. Advisors using the exchange have access to insurance products that are “normalized” across insurance carriers, which helps advisors to filter, compare and select appropriate annuity products. The portal also allows advisors to create annuity-based models and monitor them alongside traditional managed account investments—including receiving daily annuity performance reporting—according to a slide presented to advisors.
For their part, product managers will be able to approve and manage carriers, treating insurance products similarly to investment products, according to another slide shared at the presentation. A firm’s governance policies can be applied to the products made available on the portal and managers can compare products across carriers.
Advisors have access to carriers’ product stores via a behind-the-scenes integration with FIDx, the company that supports transactions, according to product illustrations and comments made by Richard Romano, FIDx’s CTO. After making their product selection, advisors send their proposal to the home office platform for review and submission to the carrier partner. Envestnet is FIDx’s first wealth management client, said a FIDx spokesperson, but the firm is also looking for other wealth management platforms where it could offer its services.
“What we've done is brought insurance to life within the platform,” said Romano, at Envestnet’s conference. Information available within the platform includes firm details, rate sheets and prospectuses.
For its part, Envestnet wanted to eliminate the “swivel chair” advisors find themselves in when dealing with third-party tools, said Kent Bonniwell, SVP of strategic development. “Our goal with this unified platform is to allow an advisor, both for new business and ongoing management, to manage [annuities and corresponding models] directly in the platform,” he said. “It really can become your one point of information across everything.”
For advisors interested in utilizing additional carriers beyond the initial six, or in other insurance products, like life insurance, Envestnet is asking for patience as it works to expand its offering. The firm hopes to have 20 carriers on its exchange by the end of 2020, said John Yackel, executive managing director and head of strategic initiatives at Envestnet. The firm wants to make life insurance available on the exchange by the end of 2019.
Now that the portal has been launched, Envestnet will be turning its attention to improving reporting, said Bonniwell at the conference. Advisors and their clients will start to see stats on how much of a portfolio is guaranteed income without advisors having to go “pecking and hunting through things,” he said. Eventually, those details will be integrated with the financial planning capabilities of Envestnet and “could be attached to goals,” he added.
Judging by the enthusiasm of the firm’s summit, advisors are eager to eliminate what they perceive as serious pain points around access to, and reporting of, insurance products, not to mention the headaches of comparing products. With Envestnet’s broad market launch of Insurance Exchange, advisors, vendors and carriers are hoping they will see benefits from bringing insurance to clients’ doorsteps.