Envestnet Case Study (Part 1)

As mentioned before, I need to study more TPAMs to get a broader view of their offerings. Today I will increase the sample size to 2 by looking at Envestnet.

     > Our open architecture platform encompasses a broad range
     > of institutional-quality research, investment products,
     > and advisory resources. The Envestnet Platform gives you
     > the tools to conquer complexity and drive your success.

I imagine “platform” to include pull-down menus with various funds available for investment. FAs can choose these for clients, which means the FAs would be overseeing the investments. The TPAMs actually pull the trigger on trades at the exchanges, which is where the action truly takes place.

Under “portfolio solutions” are listed three investment management companies: American Funds, PMC, Franklin Templeton. Looking closer, they list roughly 20 sets of portfolios (it’s a bit dizzying!) that all include a PMC component.

The website explains:

     > Whether you’re an independent advisor, a broker-dealer or
     > an institutional investor, Envestnet | PMC provides you
     > with all the experience and solutions you need — from
     > comprehensive manager research to portfolio consulting and
     > portfolio management — to help you improve client outcomes.
     >
     > PMC performs rigorous due diligence on an extensive
     > universe of investment vehicles to identify best-in-class
     > managers: those we consider able to outperform their
     > benchmark over a complete market cycle.
     >
     > Our team applies qualitative due diligence and quantitative
     > expertise for manager selection and ongoing monitoring.
     >
     > PMC provides in-depth consulting for advisors and
     > enterprises. We guide advisors through the various decisions
     > involved in building an optimal portfolio.
     >
     > PMC consultants also help enterprises design and monitor
     > wealth management programs and ensure fiduciary
     > responsibilities are consistently met.
     >
     > PMC combines specialist asset managers and PMC capital
     > markets intelligence to create advanced mutual fund wrap,
     > unified managed account, and separate account portfolios.
     >
     > Through a multifaceted, collaborative effort between
     > portfolio, consulting, and research teams, PMC delivers
     > a robust selection of solutions to fit the needs of almost
     > any investor.

One could get caught up for weeks to months trying to understand all the intricacies here.

Ultimately, though, I think all of this is well-written boilerplate that could apply to most any IA. Despite its apparent uniqueness and eloquence, flip a coin and choose an IA.

To better understand their investment expertise, I navigated to a video about quantitative portfolios and factor enhancement. Next time I will focus on the meat and potatoes of this presentation.