Envestnet , which provides wealth management technology to advisory firms, is rounding out its offerings by purchasing the maker of MoneyGuide financial planning software.
Envestnet will pay a total of about $500 million for Powhatan, Va.-based PIEtech, according to a news release. That includes $295 million in cash and about 3.185 million shares of Envestnet common stock. Envestnet expects the deal to close in middle of this year and be immediately accretive to adjusted profits.
The news comes not long after Envestnet announced a partnership with PIEtech and Edmond Walters – the founder and former CEO of eMoney, a financial planning software company now owned by Fidelity Investments – to form Apprise Labs, a startup aimed at creating software that will handle estate planning, lifetime cash flow and client retirement needs.
“We have admired the MoneyGuide offerings for some time, and recently announced our collaborative partnership with Apprise Labs and the PIEtech team,” Envestnet CEO Jud Bergman said in the news release. “With MoneyGuide’s financial planning applications more deeply integrated into Envestnet’s wealth management solutions, enterprises, advisors and their clients can benefit from a frictionless wealth management technology solution across the application stack, driving higher productivity and better client outcomes.”
Industry experts said the acquisition fills out Envestnet’s lineup.
“Bottom line: the MGP acquisition is a real coup for Envestnet, and when coupled with Yodlee, is a profound shift in Envestnet’s focus from its investment/SMA roots into a full-scale advisor tech platform with a financial planning focus,” Michael Kitces, a financial planner and author of the Nerd’s Eye View blog, tweeted. Yodlee is Envestnet’s data aggregation and analytics platform.
Shirl Penney, the CEO of Dynasty Financial Partners, which provides wealth management and technology platforms to RIAs and is an Envestnet partner, told Barron’s he was “thrilled” by the news.
“If you take what Envestnet has now with data aggregation capability, proposal generation, asset management, rebalancers, and reporting and add financial planning to the front end with a multicustodian interface it gives advisors a differentiated experience they can’t get anywhere else in the market,” he said.
Envestnet has acquired financial planning software before; in 2015, it scooped up Finance Logix, InvestmentNews notes. Envestnet’s Bergman said he saw MoneyGuide serving the needs of certified financial planners while Logix will still have a role for nonplanners, such as running cash-flow simulations, according to the publication.