Advice at Scale: Smart Tech Meets Human Insight with Anuj Gupta and Blake Wood

[00:00:19] Doug Heikkinen: Let's start out with each of you talking a little bit about your work history and your charge at Envestnet. Blake, let's start with you.

[00:00:27] Blake Wood: Yeah, so I've been just over 20 years at Envestnet in all sorts of various roles. But now, oh, for the last year or so, I've been heading up platform strategy for Envestnet. And what that really is focused on is how do we bring together all of the capabilities that we have across Envestnet into a more unified journey and experience for the home office, the advisor, and the family.

And as well as our partnership network. So how do we bring in those other capabilities and platforms into the Envestnet ecosystem that we can partner with to deliver better outcomes for the advisors and the families they serve?

[00:01:03] Doug Heikkinen: Super. Anuj, Head of Sales Engineering. Talk about that.

[00:01:07] Anuj Gupta: Yep. Thanks. Thanks, Doug.

actually this month will be 10 years at Envestnet. And I was with a firm for 14 years prior to that, which was an RIA, working with high net worth investors. So a lot of experience just in the wealth management space. Specifically at Envestnet, lead a team that, think of us as we really sit in between sales and product.

So we're a team made up of subject matter experts that really know all the ins and outs of the various Envestnet platforms. And then we spend most of our time directly with firms and advisors understanding what do their businesses look like, what do their practices look like? What do their current tech stacks look like?

And then how does Envestnet help in various areas of their practices, both their field advisors, internal processes, data strategies, really all of the above. So best practices on how to use Envestnet.

[00:01:59] Doug Heikkinen: That's great. Let's get into it. So Blake, I'm gonna start with you. Envestnet's 2020 platform introduced multi harvest tax simulations and ISP light enhancements.

How do these updates address persistent pain points for advisors managing complex client portfolios?

[00:02:16] Blake Wood: These are two examples of helping to scale a more personalized experience, both for the advisor and the investor. By helping the advisor to scale tax harvest simulations, we help them meet the unique tax budgets of the different families they serve at scale.

With the ISP, we're enabling the advisor to more personalize his or her story and value proposition to the families that they aim to serve or already serve. And we plan to continue to invest in helping advisors scale their investments and brand and value propositions, along with being able to help to deliver personalized investments at scale.

[00:02:56] Doug Heikkinen: Anuj, AI is all over the place, and with 77% of wealth firms reporting improved decision making via ai, how's Envestnet embedding predictive analytics into its platform while preserving the human advisor's role in client relationships?

[00:03:15] Anuj Gupta: Doug, great question. As you can imagine, AI is all over our strategy and all over our roadmap.

So where are you really seeing Envestnet really use AI. Think of, from a technology perspective, it's, it goes beyond just workflow automation, meaning prep, those types of things, which are critical, right? Which are baseline needs that are out there. But it's also bringing out, think of predictive analytics, right?

So by being able to use and combine all the wealth of data that we sit on top of from CRM data, to financial planning data, to portfolio management, investment management data, and have a strategy and tools that allow an advisor to really stay on top of everything that's going on, whether there's a change in a direct deposit, whether there's a financial plan that hasn't been updated in a couple months, whether there's a propensity from a money in motion perspective to say, well there's outside assets, there's propensity to move those.

So it's really all about. Creating time for that advisor and surfacing up next best action, surfacing up information that the advisor, if they really dug through all the CRM notes or look through all the transactions history, they could do that. But what we're doing with the use of these tools is really surfacing that information onto those desktops of that advisor.

Meet that advisor where they're at, let that advisor know that these are some opportunities that you should be looking at, but you're still using that advisor's intuition, that advisor's knowledge of that client to really act on those recommendations and those insights to basically make good decisions for their investors.

So it's a tool, but it's a tool that goes beyond just workflow automation. It's really encompassing on just helping that advisor do better for their investor.

[00:04:54] Doug Heikkinen: Great. Blake, your client review integration aims to improve transparency. How do these features align with the industry's shift towards hyper-personalized wealth management?

[00:05:07] Blake Wood: If you think about the different needs of clients and their different investment policy rules or unique investments that they aim to achieve, the client review helps automate not only that review or progress meeting that the advisor's having, helps them prep for the meeting, but in the ongoing daily management of that overall household, their plan and their investments, the advisor's able to monitor that nightly or have the platform monitor that every day so that as they're going through making changes potentially inter day, we're gonna remind them that, hey, these are the goals, the investment policy rules and the risk rules that apply to this household, and making sure that they stay aligned with the plan that they put in place with that family.

[00:05:57] Doug Heikkinen: Anuj, despite AI's growth, many firms remain in the pilot stages. They're unsure of where to go. What operational or cultural challenges do advisors face when adopting Envestnet's advanced tools like sleeve guided cash flows or bulk trade holds.

[00:06:15] Anuj Gupta: Change is hard, right? Anytime you're changing anything for advisors that are used to doing things one way or another for a very long period of time, whether it's the use of new AI tools that are automating things, whether it's a couple of the tools that you mentioned, which we'll go into here in a second, change is hard.

So the best way to really have those conversations is one, have a great training and support and documentation structure around that. Get advocates from the field in terms of how to use these tools. But some of the things that Doug just mentioned, think of sleeve guided operations within a unified managed account.

So big concerns a lot of times for advisors when moving to a unified managed account structure is the loss of control that you would have if you're trading everything yourself. So the use of these sleeve guided tools say, let me maintain some of that control to say, I want to target this deposit here.

I want to target this withdrawal here, but still do it in a structure that I'm not calling five different SMA managers to move money around. So you're still giving that advisor that edge. You're still giving them the ability to have that level of control, but you're just doing it in a more operationally, more efficient way that still enables, that creates time for them, but still allows them to do what they need to do for their investors.

[00:07:30] Doug Heikkinen: All right, Blake, with cybersecurity ranking as the top tech priority, how does Envestnet's architecture balance innovation and compliance?

[00:07:40] Blake Wood: One of the things that, for better or worse, Envestnet is a regulated entity, right? Whether it's OCC, Finra, SEC, or others, everything that we build and deploy, we have to think of compliance first. It's one of the advantages as we think about our firms that utilize us, is that they know that we're gonna go through this deep review, versus an unregulated platform has a little bit more freedom and flexibility, but also provides extra risk and due diligence to the advisory firms that need to make sure that they're doing their own and that they're complying with all the rules. So with Envestnet, we've invested heavily in cybersecurity, not only in people and technology, but at the very beginning of our design phase, as we think about new, whether it's new reports, new trading capabilities, new investment capabilities, all of that is looked at through a compliance lens. And also knowing that downstream, we've gotta work as a collective with our advisors, our broker dealers, banks, and RIAs, to make sure that we're meeting the expectations of the regulators in the industry.

[00:08:45] Doug Heikkinen: Anuj, Gen AI is projected to claim 16% of IT budgets. What use cases is Envestnet, prioritizing, and how will they impact advisor productivity without compromising compliance?

[00:09:00] Anuj Gupta: So tying into Blake's answer about compliance. Compliance is we're blessed that Envestnet that to have a really good compliance team that is forward thinking, that really looks and evaluates new tools and new technologies and new features really well.

And to all the firms that we work with, right? We're very collaborative and interactive in terms of understanding their compliance culture, their structures, their flexibilities. So the benefits of the platform being able to say, these are the available insights, right? From a next Best action or AI generated tool set. And being able to say, Firm A, their compliance department might say, these insights, right? These are the only ones that we want. So allowing your tool to say, this is the flexibility that you need. and it's also making sure there's a clear line between what's truly a recommendation and what's surfacing information to that advisor so that they can make that decision.

And they're the ones that are still in that driver's seat of saying, okay, this is what we're doing. It's information being suggested, but it's not making that recommendation to that investor. So it's really critical, but it's critical as advisors look at their platforms to make sure there's flexibility and an understanding of how compliance has impacted what the output is and what controls and what options exist in that solution.

[00:10:19] Doug Heikkinen: Anuj, continuing on, how does Envestnet's cloud native approach support RIAs in achieving the 4%-5% annual tech spending growth needed to remain competitive.

[00:10:32] Anuj Gupta: So I think just our structure and our ability to, there's a lot of tools out there, right? An advisor, a practice is faced with a ton of new technologies, emerging technologies, and the fact that our platform, our architecture, is such that we can integrate with partners, and when I say integration, that could mean a lot of different things, right? But we have various levels of connectivity with various different partners, whether they be custodians, whether they be other partners and technologies out there, whether they be within the own Envestnet ecosystem.

So we've done a lot of that work where we can take that, because of our architecture, we can work directly with partners on behalf of advisors to say, this is what we already have. So they're not having to invest in, but. So in the larger organizations, because of the architecture, they could tap into those same integrations and that same architecture, which allows them to really build it into their workflow.

And that's really the flexibility of the platform, which as firms are looking at partners and vendors to partner with, that flexibility is important because it allows those firms to grow into what they need today, but also in the future.

[00:11:40] Doug Heikkinen: Blake, advisors and consumers thirst for alternatives is only growing.

How is Envestnet's integration addressing the demand for alternatives?

[00:11:50] Blake Wood: Yeah, so we've integrated with Case, iCapital, Arch and Canoe to better support alternative investments, and ultimately our goal is to bring them into that UMA chassis whenever possible as an allocation in the overall portfolio.

If we can make it easier to transact through our network of partners, then make it easier to embed in the portfolio, everyone wins. So we will continue to invest at Envestnet to bringing alternative capabilities through partners and third parties, and also continue to invest in our platform to make it easier for advisors to implement and execute.

[00:12:27] Doug Heikkinen: All right, Blake, last one for you. Back to AI. With 70% of the firms prioritizing AI driven client interactions, what emerging technologies will define Envestnet's 2025-2026 strategy, and how will they reshape advisor client collaboration?

[00:12:46] Blake Wood: At Envestnet, we're looking at AI from a conservative lens somewhat. We're looking at a lot of ways, how can we help scale our own delivery capabilities and operations and development? How can we help scale design and implementation of new features? And then how can we layer that on data so that we can provide embedded insights, next best actions to advisors?

And a lot of the things we talked about earlier as well, you pair that all together, we're giving advisors more time back. And they can repoint their staff and themselves to deeper conversations with the families they have to deliver and deploy additional services to support those families.

Ultimately, that leads to an increase in revenue and improve lives of the families they support. But they can also use our tools and other tools in the AI space that help on that client engagement and advice delivery to work on top of funnel activities to help make that funnel bigger, help convert those opportunities and focus on growing the business organically.

[00:13:50] Doug Heikkinen: Super stuff guys. Thanks so much for joining us today.

[00:13:55] Blake Wood: Thanks, Doug. Thank you very much. It's a pleasure.

[00:13:58] Doug Heikkinen: For more information on Envestnet, please visit Envestnet.com. We are on all social media platforms @Advisorpedia. Please give us a follow. For our producer Tory Miller, everyone at Advisorpedia, thank you so much for listening.