Fidelity® and Envestnet Expand Relationship to Deliver Next-Generation Unified Wealth & Advisory Platform
Fidelity Investments and Envestnet (NYSE: ENV) have expanded their 20+ year partnership to enhance Fidelity Managed Account Xchange® (FMAX), a comprehensive wealth management platform. This expanded collaboration integrates industry-leading technology, proprietary data management, and investment solutions to serve a broad range of wealth management firms and advisors.
Key features include ongoing tax management for model portfolios, enhanced insights through Envestnet’s data aggregation and performance reporting, and a new FMAX Essentials offering aimed at smaller firms. The partnership aims to help advisors streamline account management, improve client relationships, and offer holistic financial planning services.
Fidelity's Wealth Advisory Institute will continue to provide educational resources, research on investment managers, and portfolio construction strategies to support advisors in scaling their businesses.
- Expanded partnership builds on a successful 20-year relationship.
- Integration of industry-leading technology and proprietary data management.
- Enhanced FMAX capabilities support a wide range of wealth management firms and advisors.
- Ongoing tax management for model portfolios.
- Improved insights and reporting through Envestnet’s data aggregation and performance reporting.
- New FMAX Essentials offering tailored for smaller and mid-sized firms.
- Support for advisors to streamline account management tasks and build deeper client relationships.
- Provision of holistic financial planning services.
- Comprehensive educational resources and research provided by Fidelity's Wealth Advisory Institute.
- Strategies to help advisors scale their businesses.
- No specific financial figures or projections provided about the impact of the expanded partnership.
- Potential challenges in integrating new technologies and workflows across diverse advisory firms.
Insights
Fidelity and Envestnet's expansion within the wealth management sector represents a significant development for both companies and their clients. The unified platform aims to streamline investment management and financial planning through enhanced technology and data integration. This move could potentially reduce operational inefficiencies and provide more comprehensive tools for advisors to manage client portfolios. From a financial perspective, this alignment might lead to increased client retention and higher revenue due to the enhanced capabilities and services offered.
In the short-term, investors might see a boost in client acquisition as advisors seek more integrated solutions. However, the long-term success will depend on how effectively these new features are implemented and adopted across the industry. For retail investors, this means a potential increase in the stock value of Envestnet, driven by increased adoption of the platform by advisors.
The revenue model of both firms could become more robust as they tap into smaller and mid-sized firms through the FMAX Essentials offering. The platform's ability to cater to a wide range of clients—from mass affluent to ultra-high-net-worth—could be a differentiator that drives market share. However, it’s critical to monitor how competitors respond and whether they introduce similar offerings.
This collaboration leverages advanced technology to provide a more seamless experience for wealth management advisors. The integration of Envestnet’s institutional data aggregation and performance reporting, Vantage, with Fidelity’s existing tools represents a significant upgrade in data management capabilities. This enables advisors to have a more comprehensive view of client portfolios, thus allowing for more informed decision-making.
The introduction of FMAX Essentials is particularly noteworthy. By offering a more streamlined, customizable solution for smaller and mid-sized firms, Fidelity and Envestnet are expanding their reach. This feature lowers the barriers for entry for these firms, which could lead to broader adoption of their platform. The use of secure connections to manage both on and off-platform positions further enhances the utility of the system, making it a more versatile tool for advisors.
From a technology standpoint, the success of this integration will hinge on the user-friendliness and reliability of the platform. A poor user experience or technical glitches could deter advisors from adopting these new features. Therefore, continuous monitoring and updates will be important to maintain a competitive edge.
The strategic alignment between Fidelity and Envestnet suggests a shift in market needs towards more integrated and holistic financial solutions. As highlighted by Envestnet's Market Intelligence Survey, the preference for all-in-one platforms over point solutions indicates a growing demand for efficiency and simplicity in wealth management.
This move positions both firms to better serve a full spectrum of wealth management firms and advisors. By addressing the needs of not just large firms but also smaller and mid-sized entities through FMAX Essentials, Fidelity and Envestnet are likely to enhance their market penetration. The ability to offer a comprehensive solution that includes ongoing tax management and integration with high-net-worth and insurance solutions is particularly advantageous.
In the long run, this could lead to increased advisor satisfaction and client loyalty, translating to higher market shares for both firms. However, the success of this initiative will depend on the effective implementation of the new capabilities and how well they meet the evolving needs of the advisors.
A Strategic Alignment to Enhance FMAX, Enable New Capabilities to Serve Firms of All Sizes
Envestnet's 2024 Market Intelligence Survey shows that while most advisors currently assemble their technology stacks with point solutions that address a single need (
“Investment management will always be the foundation of an advisor’s offering, but the rising demand for holistic wealth management means they must be more deliberate about where and how they spend their time,” said Gary Gallagher, head of Wealth Advisory & Portfolio Solutions at Fidelity Institutional. “Fidelity and Envestnet are combining the best of both firms to make it easier for advisors to manage their books of business, provide sophisticated investment management, and integrate more financial planning services to help them remain competitive.”
A Unified Offering
Fidelity and Envestnet are enabling new and enhanced FMAX capabilities to serve a full spectrum of wealth management firms and advisors. These capabilities, which will continue to be delivered through Fidelity’s industry-leading service model and improved workflows offered through Envestnet, are designed to:
- Offer more holistic wealth management solutions, with ongoing tax management for model portfolios, including Fidelity’s Custom Model offerings, and integration with Envestnet’s Insurance Exchange and high-net-worth solutions.
- Produce better, more comprehensive insights and reporting through integration with Envestnet’s institutional data aggregation and performance reporting, Vantage. Through secure connections, this also supports the ability to view positions and portfolios both on and off Fidelity’s brokerage platform, extending an advisor’s view to better manage their clients’ entire wealth potential.
- Introduce a new FMAX Essentials offering to provide more optionality for registered investment advisors (RIAs), broker dealers, and family offices of all sizes. FMAX, available today, is a fully customizable, open-architecture solution for firms with complex needs. FMAX Essentials, which is expected to roll out later this year, is an offering of select investment solutions intended for smaller and mid-sized firms.
“As today’s advisors look to grow and scale their business, Envestnet’s expanded relationship with Fidelity is providing greater opportunities to optimize the advisor workflow; help reduce the time and effort required for account management tasks; seek to build deeper client relationships; and holistically address their financial planning needs,” said Andrew Stavaridis, Chief Relationship Officer and Group Head of Wealth Solutions Distribution at Envestnet. “Providing personalized solutions for clients – at scale – is expected to become a more seamless and unified experience through this unique collaboration.”
Advisors have access to existing wealth management and educational resources offered through Fidelity Institutional Wealth Adviser LLC (FIWA)®. FIWA provides a bedrock of independent, open-architecture research and a variety of programs to help advisors build better portfolios, including:
- Quantitative and qualitative research on investment managers – both Fidelity and third party – covering a growing set of asset classes and investment vehicles, including active and passive mutual funds and exchange traded funds (ETFs), turnkey and custom separately managed account (SMA) solutions, model portfolios, as well as liquid and private alternative investments.
- Fidelity’s investment consultants and portfolio solutions team to provide a sounding board for portfolio construction strategies and insights, including economic and market outlooks, practice-level portfolio reviews, end-client proposal portfolio design, and unified managed account (UMA) model construction guidance. These teams help advisors scale their business with strategies across mass affluent, high-net-worth, and ultra-high-net-worth portfolios.
- Fidelity’s Wealth Advisory Institute, a comprehensive practice management and education program designed to help advisors adapt their practice to attract next-generation investors and implement a planning based engagement model.
To learn more, please visit i.fidelity.com/fmax
About Fidelity Investments
Fidelity’s mission is to strengthen the financial well-being of our customers and deliver better outcomes for the clients and businesses we serve. Fidelity’s strength comes from the scale of our diversified, market-leading financial services businesses that serve individuals, families, employers, wealth management firms, and institutions. With assets under administration of
About Envestnet
Envestnet is helping to lead the growth of wealth managers and transforming the way financial advice is delivered through its ecosystem of connected technology, advanced insights, and comprehensive solutions – backed by industry-leading service and support. Serving the wealth management industry for 25 years with more than
Envestnet refers to the family of operating subsidiaries of the public holding company, Envestnet, Inc. (NYSE: ENV). For a deeper dive into how Envestnet is shaping the future of financial advice, visit www.envestnet.com. Stay connected with us for the latest updates and insights on LinkedIn and X (@ENVintel).
Fidelity and Envestnet are separate and unaffiliated firms. This release should not be construed as a recommendation or endorsement of any particular product, service, individual or firm.
About FMAX and FIWA
Fidelity Institutional Wealth Adviser LLC (FIWA)® is a registered investment adviser and an indirect, wholly-owned subsidiary of FMR LLC. FIWA is the sponsor of the Fidelity Managed Account Xchange® (FMAX) program. FMAX is a comprehensive wealth management platform consisting of advisory tools, programs and services, and investment products from Fidelity and other leading asset managers. Some services are provided by affiliated and unaffiliated parties. FMAX offers robust Fidelity service & support and a simplified client experience, provides investment advisory and platform services, and is offered by FIWA, an affiliate of Fidelity Brokerage Services LLC and National Financial Services LLC. FMAX provides investment advisory and platform services for a fee. The FMAX Platform is not a brokerage product.
Fidelity Investments® is an independent company, unaffiliated with Envestnet Inc. ("Envestnet"). Fidelity Investments is a service provider to Envestnet. There is no form of legal partnership, agency affiliation, or similar relationship between Envestnet and Fidelity Investments, nor is such a relationship created or implied by the information herein. Fidelity Investments is a registered trademark of FMR LLC. Fidelity Investments® provides investment products through Fidelity Distributors Company LLC; clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC; and institutional advisory services through Fidelity Institutional Wealth Adviser LLC.
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
ETFs are subject to market fluctuation, the risks of their underlying investments, management fees, and other expenses.
Alternative investments are investment products other than the traditional investments of stocks, bond, mutual funds, or ETFs. Examples of alternative investments are limited partnerships, limited liability companies, hedge funds, private equity, private debt, commodities, real estate, and promissory notes. Some of the risks associated with alternative investments are: Alternative investments maybe relatively illiquid. It may be difficult to determine the current market value of the asset. There may be limited historical risk and return data. A high degree of investment analysis maybe required before buying. Costs of purchase and sale may be relatively high.
Third party marks are the property of their respective owners; all other marks are the property of FMR LLC. The third parties referenced herein are independent companies and are not affiliated with Fidelity Investments. Listing them does not suggest a recommendation or endorsement by Fidelity Investments
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Fidelity Brokerage Services LLC, Member NYSE, SIPC 900 Salem Street,
Fidelity Distributors Company LLC, 900 Salem Street,
National Financial Services LLC, Member NYSE, SIPC, 245 Summer Street,
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i Includes assets in managed account programs across Envestnet and FMAX but excludes accounts associated with Data Aggregation Services and Reporting Only Services as of 3/31/24.
ii Envestnet 2024 Market Intelligence Survey;
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Source: Fidelity Investments
FAQ
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