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Technology > Investment Platforms

Envestnet’s Dani Fava: Why Entry of Apple, Amazon Into Finance Would Be Good for Advisors

By Jeff Berman

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What You Need to Know

  • Embedded finance may finally lead to Amazon, Apple and Facebook fully entering the financial services arena.
  • But it is still good news for advisors because the experiences created will allow them to incubate future clients.
  • Clients will be able to connect with advisors via the new client portal Envestnet is launching later this year.

The investments that Envestnet has been making in embedded finance — the offering of financial services through nonfinancial providers like Apple — stand to help not only it and investors, but advisors as well, according to Dani Fava, the company’s head of strategic development.

Amazon, Apple and Facebook could “finally get into our space and really disrupt it” through embedded financing, she said Wednesday during the second day of the Envestnet Advisor Summit, held virtually for the second-straight year.

“But this is not bad news for advisors. I believe it’s good news for advisors,” she said during a session on “Embedded Finance: The Next Digital Disruption.”

That is because “all of these experiences” that embedded finance stands to create by merging the retail ecosystem, gaming, fintechs/payment platforms, and small and medium banks “will incubate future advisor clients,” who she said “will be growing their wealth in different places which are more convenient for them” as a result of this new financial services category.

“Then companies like Envestnet will power the embedded finance ecosystem [and] create the funnel of tomorrow’s advisor clients,” she added.

Envestnet’s Embedded Investments

Ahead of the Summit, Envestnet announced several embedded finance-related initiatives. For example, Envestnet | Yodlee launched an enhanced developer portal that it said last week provides an “enriched developer experience” and “builds off” Yodlee’s platform to “advance the embedded finance ecosystem by accelerating the ability for developers to create hyper-personalized and actionable financial wellness experiences.”

Also, while announcing its acquisition of fintech firm Harvest Savings & Wealth Technologies in April, Envestnet said the transaction “optimizes” its application programming interface (API)-based financial wellness ecosystem, and “also helps strengthen our foothold to enable embedded finance, which we see as a key driver of the future of financial services.”

Envestnet is already well-positioned to power embedded finance, according to Fava. “We’re already there,” she said. “We’ve got so many capabilities that are being used by advisors and other financial institutions today that really put us at the very end of this path toward embedded finance.”

That is because Envestnet’s API network includes MyBlocks modules for financial planning and budgeting; data aggregation and insights; automated savings; thematic data-driven investing; thematic and value-based reporting; conversational artificial intelligence for customer support; access to experienced professionals with its advisor network; and module marketplace exchanges, according to Fava.

Envestnet’s APIs can potentially be used to create apps taking advantage of embedded finance capabilities. The company’s goal is to be able to provide one central view of an investor’s “financial life,” create financial wellness for those investors and “incubate” them until they’re ready to speak with advisors, and then share that central view with advisors, Fava explained.

New Client Portal Coming

Clients will be able to connect with advisors on Envestnet’s platform through the new client portal that Envestnet plans to launch later this year, Fava said.

The new portal was described by Envestnet CEO Bill Crager as a “client environment” on Tuesday during the opening session of the summit. He called it a “modular piece of modern technology that is adapted to each and every” client that advisors engage with.

Envestnet is “investing to accelerate these environments while also bringing each of our capabilities together so that all advisors can access the full suite of Envestnet capabilities — all of our solutions — in a new, user friendly way,” he said.

Envestnet, meanwhile, will be making “10 million recommendations a day later this year” with the AI-driven recommendations engine that the company launched last year, he also told viewers. “That will grow to over a billion recommendations a day by 2025.”

Jeff Berman

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