Envestnet Plans $1B R&D Spend Over 5 Years

Financial technology company Envestnet Inc. announced a five-year strategic road map on Monday, including plans to spend $1 billion on research and development of software for trading, financial planning, portfolio management and client engagement.

According to a statement, projects include “platform unification, enhanced unified managed account infrastructure [and] flexible household modeling,” as well as integrating multiple investment types.

Citing company research, Envestnet stated that high-net-worth investors asked for custom allocations, multi-manager accounts funds, alternative investments and tax overlay solutions and efficiency. Envestnet has $7 trillion in platform assets and claims it is used by more than one-third of all financial advisers across banks, wealth managers, brokerages and registered investment advisers.

“Advisers are telling us they want to consolidate with fewer partners, deepen integrations and leverage better wealth tech that helps them expand their business,” said Chris Todd, Envestnet’s CEO, in a statement. “This roadmap delivers that—not in pieces, but as a fully connected solution.”

Alternative investments “play a significant role” in Envestnet’s five-year plan, according to the statement. By year-end, advisers will be able to increase investments in alternatives through Envestnet’s unified managed accounts, which will support adviser model sleeves and allocations to interval funds, according to the announcement.

Integration of Foundation Source’s Charity Planning Tools

Also on Monday, Foundation Source Philanthropic Services Inc. announced a strategic partnership with Envestnet to provide wealth managers, RIAs and financial institutions with tools to streamline and scale charitable giving.

According to the announcement, Envestnet will integrate Foundation Source’s enterprise-grade technology, which supports private foundations, donor-advised funds and planned giving programs—as well as provide a suite of administrative, compliance and tax services—in the Envestnet platform.

Clients are expected to have access to configurable dashboards, comprehensive reporting and other workflows for grants management and impact measurement. Foundation Source will also enhance compliance oversight for participating firms.

“This integration addresses a critical resource gap and increases operational efficiencies so advisers can spend more time helping clients achieve their philanthropic goals with ease and confidence,” said Joseph Mrak III, Foundation Source’s CEO, in a statement.

As of June 30, Foundation Source supported more than 2,300 private foundations, 18,000 DAF accounts and 1,800 nonprofits, as well as administering $40 billion in charitable assets.