Essential Advisor Revealed by Envestnet

Envestnet Unveils Initiative to Quantify the Value of Professional Advice, Empower Financial Advisors and Institutions to Deliver on It, and Advocate that Good Advice is Worth Paying For

Envestnet, Inc. unveiled The Essential Advisor™, which advocates the quantifiable value professional financial advisors deliver in helping consumers reach their financial goals, at this year’s Envestnet Advisor Summit, currently underway at the Hilton Chicago.

The new initiative:

  • Draws on the proprietary expertise Envestnet has obtained from supporting almost 50,000 advisors on its platform, enabling the firm to provide insights into how the most successful advisors are running their practices.
  • Is grounded in the firm’s Capital Sigma: The Return on Advice™ study, which finds advisors have the potential to add 3 percent in value to their clients annually.
  • Delivers actionable insights and educational programs, including an enhanced vision for the Envestnet Institute.
  • Will culminate in the release of a new book, The Essential Advisor: Building Value in the Investor-Advisor Relationship.

The principle of being an ‘essential advisor’ is a driving catalyst for how we will continue to empower the nearly 50,000 advisors who utilize our platform and the millions of accounts those advisors service—acting as the central idea guiding all of our strategic initiatives, from our ongoing technology innovations to our product roadmap,” said Bill Crager, President of Envestnet. “Our goal is to put our expanding network and solutions to work to help advisors and institutions across the industry assess and refine their practices at all stages of their business development.”

Crossing the Digital Divide by Delivering a Return on Advice

While digital advice platforms continue to make headlines, they cannot deliver the added value and insightful guidance that investors can receive when they develop a trusted, long-term relationship with a professional financial advisor, according to the Capital Sigma white paper. The study’s research, conducted by Envestnet | PMC’s Quantitative Research Group, found that there are several pillars, or sources, of advisor-created value that can be quantified. These pillars include financial planning, asset class selection and allocation, investment selection, systematic rebalancing, and tax management. Advisors who successfully implement all of these pillars can produce around 3 percent of annual added value for a client’s portfolio.

The top advisors of the future will be those who can easily customize advice and touchpoints to the specific needs of each client, as well as effectively communicate the value they add,” said Jud Bergman, Chairman and CEO of Envestnet. “The Essential Advisor leverages our Capital Sigma research as a framework for how advisors can successfully cross the digital divide to strengthen client relationships and increase productivity—and, ultimately, win in the digital age.”

The Essential Advisor: A Roadmap to the Future for Advisors and Investors

Envestnet’s ongoing effort to help advisors implement the Capital Sigma pillars of value and return on advice will culminate in the release of The Essential Advisor: Building Value in the Investor-Advisor Relationship. The book, published by Wiley, will be available Monday, May 23, 2016 wherever books and eBooks are sold, and is currently available for pre-order.

The book’s co-authors are Mr. Crager and Jay Hummel, Managing Director of Strategic Initiatives and Thought Leadership at Envestnet, and its foreword is written by Jean Chatzky, Financial Editor for The TODAY Show.

While the wealth management industry is evolving, so are consumers—and some advisors are finding themselves left behind as old methods become less relevant. The Essential Advisor serves as an insightful handbook for advisors looking to navigate this changing landscape.

The book will also empower consumers with a better understanding of what advisors do, how they deliver better results for consumers, how consumers should think about the wealth management industry, and what criteria they should consider when selecting an advisor. In addition to Ms. Chatzky’s foreword, Pam Krueger, Gracie Award-winning host of the Emmy Award-winning PBS program MoneyTrack, partnered with Mr. Crager and Mr. Hummel on the book to include a consumer perspective section at the end of each chapter.

While the Capital Sigma research demonstrates there are ample opportunities for advisors to deliver value, The Essential Advisor shows advisors how to adapt their business models so they can actually deliver this added value. The advisors of the future will spend more time delivering advice as opposed to implementing it, and at Envestnet, we are dedicated to providing the technology, data, intelligence, and other tools that advisors need to deliver advice that is not just valuable, but essential,” said Mr. Hummel. “Advisors can use The Essential Advisor, as well as the Envestnet platform, as resources to understand the value proposition they must adopt in order to effectively compete now and in the future, and communicate the essential role they play in managing wealth to clients.”  

In addition to Ms. Chatzky and Ms. Krueger, 13 industry leaders contributed their insights to The Essential Advisor through interviews with the co-authors, including: Patricia Farrar-Rivas, CEO of Veris Wealth Partners; Michael Kitces, Partner and Director of Financial Planning at Pinnacle Advisory Group; Chip Roame, Managing Partner at Tiburon Strategic Partners; Knut Rostad, President of the Institute for the Fiduciary Standard; and Mark Tibergien, Chief Executive Officer of Pershing Advisor Solutions.

Delivering Essential Advisor Tools and Resources Through the Envestnet Institute

“The Essential Advisor” initiative will also be a driving force behind the enhancement of the Envestnet Institute. Over the course of the coming year, the Institute will build on Envestnet’s expanding data aggregation and analytics capabilities, acquired through the ongoing integration with Yodlee, to provide advisors with more quantifiable, actionable insights. Advisors will be able to log into the Institute’s website to assess their practices and curate content as part of a customized Institute experience that can empower them to become essential. Envestnet also plans to add new curriculum materials in addition to ongoing content, research, and commentary from the Institute’s asset manager partners.

Author: Dylan Jones

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