As the Envestnet Advisor Summit gets underway today, CEO Jud Bergman kicked off the event with the big news that financial planning software and PFM provider FinanceLogix is being acquired in a deal reported at $32.5M of cash and stock, plus significant additional options to the upside. The news comes on the heels of Envestnet’s acquisition of robo-advisor-for-advisors Upside Advisor just a few months ago.
Relative to other recent deals like Fidelity’s acquisition of eMoney Advisor and the Northwestern Mutual purchase of LearnVest – both rumored to be bought for more than $250M each – the FinanceLogix deal is noticeably smaller, but given that the company may have only had 1/5th the market share of eMoney Advisor, seems reasonably in line and suggests that the acquisition interest in integrated financial planning and PFM software solutions remains strong. In fact, with the FinanceLogix purchase, there are virtually no remaining fully integrated planning-plus-PFM solutions available today… so expect to see the major players begin to acquire standalone PFM solutions and ‘manually’ integrate them instead as the buying frenzy continues.
From the perspective of FinanceLogix, the Envestnet acquisition will give them significant resources to continue to build and iterate the software – which will remain available to existing and new standalone users, even as it is more fully integrated into the Envestnet Advisor Suite. And from the Envestnet perspective, the acquisition suggests that Envestnet is aiming to build the “Holy Grail” of advisor technology platforms, a fully integrated technology stack including CRM, portfolio accounting, and now financial planning software, integrated with a “robo”-style client-facing portal that includes PFM capabilities… and revealing that perhaps Envestnet is not positioning to someday become a competing custodian, but instead simply wants to take the high ground of advisor value-add and deliver the ultimate integrated technology platform of the future for advisors – one that can be used regardless of their underlying (and increasingly commoditized) custodian or broker-dealer relationship.