Envestnet’s wealth management platform provides technology, solutions, and intelligence that supports advisors and financial professionals as they navigate their clients through every step of the wealth management process. To dive into why an integrated and configurable platform experience matters and how firms are leveraging Envestnet's Portfolio Management capabilities, we sat down to chat with Steve Diaz, Principal Director, Product Management Wealth Products.
Q: How do integrated platforms enhance a firm’s Unified Managed Account (UMA) business growth?
Steve: A fully integrated experience offers a configurable solution, allowing firms to customize the experience to their business and grow alongside them.
With over 1.27 million UMA accounts on our platform, roughly $542 billion1, advisors can offer a diversified, tax-aware, multi-asset portfolios in a single account.
As I see it, the key features of Envestnet’s UMA offering include:
Proposal creation: A single proposal can either create a personalized UMA model for investors or use a previously created model, which offers scale. The full stable of investments (sleeves) are available in either case.
UMA portfolio construction, management, and reporting: Our UMA framework supports multiple strategies within one account. Sleeve options include advisor sleeves, SMA sleeves for both equities and fixed income, FSP sleeves, and Single-security sleeves. Embedded efficiencies in the platform allow advisors to build and save UMA models and apply them to multiple client accounts seamlessly. This makes it easy to implement portfolio adjustments, such as asset allocation or manager changes, to all accounts associated with a single model.
Investment policy rules: Our comprehensive set of tools enable the home office and compliance to monitor advisor’s management of investment accounts and models. The platform assesses each compliance monitoring policy in relation to every account, management group, or investment group.
Service request: Our service requesting system and sleeve controls help advisors to stay very close to the day-to-day management of an account without having to trade.
Billing: Advisors can easily have manager fees billed separately, while keeping advisor fees or other components consolidated.
Q: What is the demand for Unified Managed Households (UMH)?
Steve: While UMA and UMH are often mentioned together, they are two different products that address different needs. However, they can co-exist together.
UMA is an investment account that consolidates multiple investment strategies and asset types into a single account, but each account must be its own registration. UMH encompasses all the assets across all registrations, accounts, and holdings from a household and coordinates them, which can help to ensure the best possible financial return for all accounts included.
The technology driving UMH is designed to empower advisors and clients toward the next best actions to take grow more sensitive to after-tax returns. An EY study found when all the data from a household portfolio are connected, coordinated and optimized, investors saw a 33% improvement in spendable income. That translates to more than $1 million of increased discretionary spending power over 30 years on a portfolio with a starting value of $1 million.2
Q: What is next on your team’s roadmap and what can advisors look forward to?
Steve: Currently, advisors must open a second IRA account or a second individual account because they are unable to put all the investments into the UMA. Envestnet is working towards one account per registration.
Given our platform’s extensive reach our UMH tool is designed to adapt to diverse household needs. No two households are identical, but our tool can offer enough flexibility to support any household.
Through our comprehensive platform, advisors are empowered to manage and grow UMA and UMH accounts more effectively. With features that streamline portfolio construction, compliance, and service management, firms have the potential to deliver better client outcomes. As the platform continues to evolve, advisors can look forward to even more tools that simplify and enhance the wealth management process.
To learn more about our connected wealth management experience, please visit https://www.envestnet.com/wealth-management/software.
