Fidelity Institutional and Envestnet, Inc. (NYSE: ENV), today announced
that they reached $100 billion in managed account assets on Fidelity
Institutional’s platform.1 The pace of growth for the
platform is more than twice the industry rate.2
Fidelity Institutional is the division of Fidelity Investments®
that provides clearing, custody and investment management products to
registered investment advisors, broker-dealers, family offices and
banks. Envestnet is a leading provider of unified wealth management
technology and services to investment advisors and wealth managers.
Fidelity Institutional built its managed accounts platform to help
advisors meet the challenge of efficiently providing their clients with
investment management services tailored to their particular financial
situations and risk tolerance. Powered by Envestnet’s web-based
technology, the platform offers access to institutional money managers
and hundreds of managed account options, and handles monitoring and
rebalancing investments for advisors as the markets change.
“Managed accounts offer three important benefits for advisors: a
customizable yet scalable solution, an opportunity for recurring revenue
and the freedom to focus on a client’s broader financial picture rather
than solely investment management,” said Mark Haggerty, head of Fidelity
Institutional’s product group.
According to Cerulli data, the managed account market will climb to $6.7
trillion in assets under management by 2017, an 18 percent compound
annual growth rate between 2013 and 2017.3
“Our industry has reached a critical tipping point where advisors who
embrace new ideas and technology are seeing their businesses grow,” said
Jud Bergman, chairman and chief executive officer, Envestnet. “Managed
accounts are a particularly appealing strategy for embracing the next
generation of tech-savvy investors, who want a combination of
customization, efficiency and transparency.”
Fidelity Institutional’s managed accounts platform has seen exceptional
growth in part due to its extensive integration with Envestnet which is
unique to the industry. New integrations recently introduced for
broker-dealers include the addition of Envestnet’s advisory proposal to
Fidelity’s new account set-up, business process management, and
eSignature capabilities.
Three Reasons Managed Accounts Are in Demand
1. Fostering deeper client relationships: Managed accounts
provide advisors with portfolio management tools that help enable them
to focus on creating and building relationships with their clients.
Advisors are able to demonstrate their value proposition by working more
closely with their clients and identifying other financial planning
services they may benefit from, including estate and retirement planning.
2. A scalable solution: According to Cerulli data, assets under
management for advisors are projected to increase by 10 percent a year.4
Managed accounts can help advisors simplify their investment processes:
they can implement one solution for many investors. The model portfolios
they create can be applied to a large portion of their client base.
3. Opportunity for recurring revenue: The recurring revenues of
managed accounts provide advisors with an opportunity to grow their
business. Building a managed accounts-oriented practice represents a
fundamental shift from the traditional commission-based business model.
According to Fidelity’s most recent Advisor Insights study,5
advisors who are predominantly fee-based have 38 percent higher assets
under management, manage larger sized average accounts and earn 51
percent more in compensation.
About Fidelity Investments
Fidelity’s goal is to make financial expertise broadly accessible and
effective in helping people live the lives they want. With assets under
administration of $4.9 trillion, including managed assets of $2.0
trillion as of September 30, 2014, we focus on meeting the unique needs
of a diverse set of customers: helping 23 million people investing their
own life savings, 20,000 businesses to manage their employee benefit
programs, as well as providing 10,000 advisors and brokers with
technology solutions to invest their own clients’ money. Privately held
for nearly 70 years, Fidelity employs 41,000 associates who are focused
on the long-term success of our customers. For more information about
Fidelity Investments, visit www.fidelity.com.
About Envestnet
Envestnet, Inc. (NYSE: ENV) is a leading provider of unified wealth
management technology and services to investment advisors. Our
open-architecture platforms unify and fortify the wealth management
process, delivering unparalleled flexibility, accuracy, performance and
value. Envestnet solutions enable the transformation of wealth
management into a transparent, independent, objective and fully-aligned
standard of care, and empower advisors to deliver better results.
Envestnet’s Advisor Suite® software empowers financial
advisors to better manage client outcomes and strengthen their practice.
Envestnet provides institutional-quality research and advanced portfolio
solutions through our Portfolio Management Consultants group, Envestnet
| PMC®. Envestnet | Tamarac provides leading rebalancing,
reporting and practice management software.
For more information on Envestnet, please visit www.envestnet.com
and follow @ENVintel.
Envestnet is an independent company and unaffiliated with Fidelity
Investments. There is no form of legal partnership, agency, affiliation,
or similar relationship between Envestnet and Fidelity Investments. The
information contained herein is general in nature, is provided for
informational purposes only and is not legal advice. Fidelity does not
provide advice of any kind.
Service marks appearing herein are the property of FMR LLC and
Envestnet, Inc.
Fidelity Institutional Wealth Services provides brokerage products and
services and is a division of Fidelity Brokerage Services LLC. National
Financial is a division of National Financial Services LLC through which
clearing, custody and other brokerage services may be provided. Both
members NYSE, SIPC.
702245.1.0
1 Represents assets under management, assets under
administration, and assets under performance reporting agreements.
2 Compound annual growth rate for the 5-year period 2008-2013
was 40.4% for Fidelity’s Managed Account Solutions program vs. 20% for
the industry, based on Fidelity Institutional’s internal data and
Cerulli Associates 1Q 2014 Managed Accounts Summary.
3 “Cerulli Managed Accounts Quantitative Update,” Cerulli
Associates, 2014.
4 “Advisor Metrics 2013: Understanding and Addressing a More
Sophisticated Population,” Cerulli Associates, December 13, 2013.
5 Fidelity’s Advisor Insights study was an online survey of
813 advisors from across multiple firm types who work primarily with
individual investors and manage a minimum of $10 million in individual
or household investable assets. Bellomy Research, an independent
third-party research firm not affiliated with Fidelity Investments,
conducted the study.
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