Specialist
Former senior executive at Envestnet Inc
Agenda
- Operating environment for Envestnet (NYSE: ENV), noting the impact of registered investment adviser (RIA) and broker-dealer consolidation
- Key organic growth drivers and risks to delivering organic top-line growth in the teens
- Performance assessment across business segments and risk of Yodlee disintermediation
- Recent acquisitions and integrations, and M&A outlook
Questions
1.
What are your thoughts on the operating environment for Envestnet? What key trends or drivers should we pay attention to?
2.
What do you think of the market shift from brokerages to investment advisers, or the general outside growth of registered investment advisers [RIAs] at the expense of wirehouses? How has that impacted companies such as Envestnet? How do you expect that to shape up?
3.
There has been a lot of consolidation with independent broker dealers and RIAs, and I think a lot of people expect that to continue. How do you think about concerns around churn or pricing power for a company such as Envestnet, given the consolidation?
4.
To what extent are custodians becoming more competitive with their tech offerings? How should we think about a potential risk of disintermediation? Why or why wouldn’t these clients develop these functionalities in-house instead of using a company such as Envestnet?
5.
What are your thoughts on Envestnet, its recent operational and financial performance, its key drivers and positioning?
6.
What are your thoughts on Envestnet’s main competition for wealth management SaaS? What are the main differentiating factors, from a product or a go-to-market perspective, vs Orion or others?
7.
Where do you expect pricing to go? Do you expect incremental pricing pressure?
8.
You mentioned the Fiserv Investment Service spin-out. Do you have any thoughts on that and Envestnet’s ability to win large broker dealer or wirehouse customers from it?
9.
You mentioned Orion potentially being up for sale. What are your thoughts on Orion and the competition there? Do you think Orion would be a good or bad acquisition candidate for Envestnet?
10.
What are your thoughts on Envestnet’s turnkey asset management programme [TAMP] offering? How has that offering evolved since the FolioDynamix acquisition?
11.
Could you elaborate on pricing pressure? How is the shift from active to passive putting pricing pressure on the TAMPs? Could you give some quantitative context about the magnitude of pricing pressure you expect? Could it be down by X% or X-Y%?
12.
Some of the large asset managers, such as BlackRock, have vertically integrated in the TAMP sector. How do you think about the impact on names such as Envestnet?
13.
Some of the large asset managers, such as BlackRock, have vertically integrated in the TAMP sector. How do you think about the impact on names such as Envestnet?
14.
What do you think of Vanguard’s success in managed account franchise and the ability to take share from Envestnet’s TAMP business?
15.
What do you think of the threat of robo advisers taking market share over time? What is your outlook for robo advisers?
16.
What are your thoughts on the Yodlee business and where it fits in the broader Envestnet platform?
17.
How do we think about potential revenue growth rates for Yodlee as a standalone? Do you think Envestnet held back Yodlee’s growth potential by reducing its use case and focusing on the wealth vertical instead? How do you think about potential to accelerate growth for that segment?
18.
How do you think about a potential risk of disintermediation over time? Why wouldn’t another financial institution or fintech client be able to replicate something similar?
19.
What do you think of the potential regulatory risk, given the recent letter sent by Congressional members? Do you think that could potentially impair Envestnet’s ability to sell Yodlee services? Do you worry about any regulatory risk about the use of data?
20.
Could you elaborate on whether Plaid is a good competitor to Yodlee? To what extent are the two companies similar or different, and how do they stack up?
21.
It seems Yodlee invested a fair amount in its Yodlee Developer platform to attract more fintech firms where it seems Plaid had a better foothold. How do you think that changes its positioning and potential to accelerate growth?
22.
How integrated is Yodlee into the core of Envestnet? Is there a lot of overlap in teams or systems? Is this a business that is easy to split out?
23.
Do you think Yodlee would be better owned by someone else, especially in light of Visa buying Plaid? Given that Envestnet does multiple things, do you think that under a different sponsor, Yodlee might perform better?
24.
What do you think are the most likely M&A scenarios for Envestnet at large, and for specific assets? How do you gauge management’s appetite to sell the company?
25.
How integrated are Envestnet’s other acquisitions, such as FolioDynamix, Tamarac and MoneyGuide? Do they have a lot of their own systems or are they consolidated?
26.
What do you think of the potential for additional M&A for Envestnet? Are there any other logical acquisition targets or logical pairings for the company?
27.
What is your outlook for Envestnet? How should we think about the potential performance across SaaS, TAMPs and Yodlee? What are the best-, worst- or base-case scenarios?
28.
Is there anything we didn’t cover or anything commonly misunderstood by investors that is worth clarifying? Do you have any closing remarks?
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