SEI Acquires LifeYield

Rhea-AI Summary

SEI (NASDAQ: SEIC) has acquired Boston-based tax-smart technology provider LifeYield, becoming the first in the industry to offer real-time, automated unified managed household (UMH) capabilities in a fully bundled overlay solution. The integration will enable tax-efficient investing at scale, providing comprehensive UMH capabilities including asset location, tax-loss harvesting, and withdrawal optimization across multiple household accounts.

The acquisition builds upon their 2022 strategic partnership and will integrate LifeYield's APIs into the SEI Wealth Platform. This move aims to serve the growing demand for tax management and personalized portfolio management, particularly targeting Millennials, Gen X, and retiring baby boomers. According to Cerulli, 86% of financial advisors consider quantifying and reporting tax management's impact essential for their business.

Positive

• First-mover advantage in providing real-time UMH capabilities
• Expansion of tax optimization services portfolio
• Integration enhances existing SEI Wealth Platform capabilities
• Strategic alignment with growing market demand for tax management services
• Builds upon existing successful partnership from 2022

Negative

• Acquisition not significant to SEI's operations or financial results
• Integration costs and challenges may impact short-term performance

Insights

Financial Technology Analyst

The acquisition of LifeYield significantly enhances SEI's competitive position in wealth management technology. The deal brings important tax optimization and UMH capabilities that address growing demand from financial advisors, with 86% considering tax management impact reporting essential. The integration creates a first-to-market comprehensive solution combining real-time UMH features with tax optimization across multiple accounts. This strategic move strengthens SEI's product offering in three key areas: advisor efficiency, investor outcomes and scalable tax-efficient investing. While not materially impacting SEI's financials immediately, the acquisition positions the company to capture growing market share as $84 trillion in generational wealth transfer occurs over the next two decades. The technology integration should drive higher retention rates and potentially attract new institutional clients seeking comprehensive household portfolio management solutions.

Market Research Analyst

This acquisition is strategically timed to capitalize on significant demographic shifts. With Millennials and Gen X in peak earning years and Baby Boomers entering retirement, there's substantial money in motion requiring sophisticated tax management solutions. The deal addresses a critical market need as investors increasingly prioritize tax efficiency and personalization in portfolio management. LifeYield's SaaS model and API integration capabilities should accelerate SEI's market penetration, particularly among wealth managers seeking scalable tax optimization solutions. The acquisition builds upon an existing partnership, reducing integration risks and time-to-market. While the financial terms weren't disclosed, the strategic value lies in expanding SEI's competitive moat in the wealth management technology space.

New, Fully Bundled Technology Solution to Deliver Real-time UMH and Tax Capabilities

OAKS, Pa., Dec. 11, 2024 /PRNewswire/ -- SEI^® (NASDAQ: SEIC) today announced the acquisition of LifeYield, a Boston-based, tax-smart technology provider. Through this acquisition, SEI will be the first in the industry to provide real-time, automated unified managed household (UMH) capabilities in a cost-effective, fully bundled overlay solution, providing the industry with the ability to look across all account registrations and implement a holistic financial plan to best optimize after-tax returns.

LifeYield's capabilities provide three core benefits, which include improving efficiency for advisors and wealth managers, improving outcomes for investors, and enabling tax-efficient investing at scale. With LifeYield's industry-leading technology for multi-account management, tax optimization, and income generation across multiple, coordinated models and accounts, SEI's comprehensive UMH capabilities will include:

• Asset location
• Tax-loss harvesting
• Ongoing and tax-efficient multi-account household portfolio management and rebalancing
• Tax transition services
• Withdrawal optimization across multiple household accounts
• Social Security benefits for retirement income

All of LifeYield's APIs will be fully integrated into the SEI Wealth Platform^SM to help accelerate investment implementation across multiple accounts within the same household. SEI intends to expand these capabilities with a new front-end solution for on- and off-platform distribution to help financial advisors, institutions, and asset managers better manage and implement household accounts.

Commenting on the acquisition, J. Womack, Chief Product Officer at SEI, said:

"Millennials and Gen X are in their prime earning years, and baby boomers are retiring—putting  money in motion for the next decade and beyond. As investor demands are driving significant industry transformation, investors are increasingly prioritizing tax management and the flexibility of a personalized approach to portfolio management. We believe that integrating LifeYield's tax-smart technology with our investment, technology, and evolving multi-custody capabilities creates a unique suite of tax management solutions that position SEI as the industry leader in enabling the efficient accumulation and transfer of wealth, as well as maximizing retirement income. 

"We're thrilled to welcome LifeYield to the SEI team, as both firms fervently believe that tax optimization is a philosophy, not a feature."

Mark Hoffman, CEO of LifeYield, added:

"Leading global financial institutions have leveraged our modular technology solutions through APIs in a Software-as-a-Service model, providing them access to tax-smart tools that help their clients achieve better financial outcomes. SEI's position in the industry can significantly elevate the ability to make this technology available to a wider audience.

"Joining the SEI team is a next step in building upon our existing strategic partnership. We're excited to deliver a UMH solution that considers the entirety of a household, so the tax benefits extend to everyone who is part of a client's financial picture."

According to Cerulli, 86% of financial advisors consider quantifying and reporting tax management's ongoing impact essential for their business. ¹ Today, SEI's on-demand Estimated Taxes Saved Report shows advisors and investors the amount of taxes saved or deferred through active tax management. With the enhanced capabilities LifeYield brings, quantifying the multi-account benefits of tax management will build upon those existing capabilities.

Arthur Worthington, Senior Business Development Director at SEI, said:

"Investors want the benefits of tax optimization, and advisors want to expand on and further demonstrate the value they can deliver to their clients, while maximizing time and cost efficiency. We have been at the cutting edge of this trend by providing Unified Managed Accounts and tax overlay services for years. We believe this acquisition further widens the gap between SEI and our competitors, allowing us to offer greater control, choice, and personalization at scale, providing another catalyst to help advisors grow.

"The age of the new wealth portfolio is here. We believe that a 360-degree view of a client's household accounts isn't just a game-changer—it represents the next generation of tax management."

As part of the acquisition, SEI will welcome LifeYield team members who collectively bring technical, sales, client service, and marketing expertise. SEI previously announced a strategic partnership with LifeYield in 2022 to provide wealth managers in the U.K. and private banks and trust companies in the U.S. with the ability to deploy a single investment model across multiple accounts within the same household.

The acquisition is not a significant acquisition of assets or otherwise material to SEI's operations or financial results. Nutter, McClennen & Fish LLP acted as sole legal advisor to LifeYield. PJT Partners acted as sole financial advisor to LifeYield. Holland & Knight acted as sole legal advisor to SEI.

1 The Cerulli Report, U.S. Managed Accounts, October 2021

About SEI^®
SEI (NASDAQ:SEIC) delivers technology and investment solutions that connect the financial services industry. With capabilities across investment processing, operations, and asset management, SEI works with corporations, financial institutions and professionals, and ultra-high-net-worth families to solve problems, manage change, and help protect assets—for growth today and in the future. As of Sept. 30, 2024, SEI manages, advises, or administers approximately $1.6 trillion in assets. For more information, please visit seic.com.

This release contains forward-looking statements within the meaning or the rules and regulations of the Securities and Exchange Commission. In some cases you can identify forward-looking statements by terminology, such as "may," "will," "expect," "believe" and "continue" or "appear." Our forward-looking statements include our current expectations as to:

• the dynamics and drivers of the asset management and wealth advice industries,
• the value that investors and advisors place on tax-optimization strategies, and
• the value that SEI will derive from the acquisition.

You should not place undue reliance on our forward-looking statements, as they are based on the current beliefs and expectations of our management and subject to significant risks and uncertainties, many of which are beyond our control or are subject to change. Although we believe the assumptions upon which we base our forward-looking statements are reasonable, they could be inaccurate. Some of the risks and important factors that could cause actual results to differ from those described in our forward-looking statements can be found in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended Dec. 31, 2023, filed with the Securities and Exchange Commission.

Company Contact:		Media Contact:
Emily Baldwin		Kerry Mullen
SEI		Vested
+1 610-676-3262		+1 917-765-8720
ebaldwin@seic.com		kerry@fullyvested.com

 

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SOURCE SEI Investments Company

FAQ

What are the key benefits of SEI's acquisition of LifeYield?

The acquisition provides three core benefits: improved efficiency for advisors and wealth managers, better outcomes for investors, and enables tax-efficient investing at scale through automated UMH capabilities.

How will the LifeYield acquisition impact SEIC's market position?

SEI becomes the first in the industry to provide real-time, automated UMH capabilities in a fully bundled overlay solution, positioning it as an industry leader in wealth accumulation and transfer optimization.

What new capabilities will SEIC gain from the LifeYield integration?

SEI will gain capabilities in asset location, tax-loss harvesting, multi-account household portfolio management, tax transition services, withdrawal optimization, and Social Security benefits optimization.

How does the LifeYield acquisition align with current market demands for SEIC?

The acquisition addresses the growing demand for tax management and personalized portfolio management, particularly from Millennials, Gen X, and retiring baby boomers who are putting money in motion.

What percentage of financial advisors consider tax management reporting essential according to SEIC's data?

According to Cerulli data cited in the announcement, 86% of financial advisors consider quantifying and reporting tax management's ongoing impact essential for their business.