Envestnet is consolidating its businesses into two distinct units, which puts its services for RIAs under one roof.
The company said after the market closed on Thursday that it is rolling its RIA services – including Tamarac, its back-end platform used by around 1,000 advisory firms – into a single division: Envestnet Wealth Solutions. Its data aggregation and analytics services will be consolidated under the Envestnet Data and Analytics brand.
Previously, the firm’s business operations were split up between separate divisions for Tamarac, its enterprise software operations and its retirement plan solutions business. It also maintained separate operations for Yodlee – a data aggregation platform for banks – and PMC, which performs investment research and due diligence.
‘These changes will give our clients greater access to our integrated technology and improve operational effectiveness,’ Envestnet chief executive Jud Bergman said in a statement. ‘Aligning the organization into two business units will foster innovation and facilitate the transformation of data into actionable intelligence in all areas of financial wellness.’
Bill Crager, the firm’s co-founder and president, will serve as chief executive of the newly-organized Envestnet Wealth Solutions. Tamarac’s current head, Stuart DePina, will run the Envestnet Data and Analytics division.
‘If I’m an advisor with Tamarac, I’m not worried at all,’ said Joel Bruckenstein, a technology consultant for RIAs. ‘Bill Crager is one of the founding members of Envestnet, he’s been there forever. He’s really a top-notch operator. Really smart guy. He understands the advisory business very, very well. I don’t see any downside at all to Bill Crager being in charge of the Tamarac division.’
Anil Arora, the chief executive of Yodlee, will be leaving the company amid the shakeup, Envestnet said. Arora plans to depart his operating role by the end of February, the company added, but will retain his seat on the board of directors.
Envestnet bought Yodlee in August of 2015 in a cash and stock deal valued at $590 million.
Putting a wealth management-focused executive like DePina – who had run Tamarac since 2007 – in charge of the data business is good for advisors, Bruckenstein explained.
‘My suspicion is that things weren’t going as well with the Yodlee acquisition as they’d like,’ he said. ‘[Arora]’s gonna remain on the board at least for now, but essentially, it looks like they’re pushing him aside and they put Stuart into that position. I think that’s also a net positive for advisors because Yodlee’s core business really wasn’t the wealth management space.’