Inside Envestnet’s $1B Bet on Growth with CEO Chris Todd

Envestnet says it has a billion-dollar check to cash. 

With more than one in three financial advisors using its services and some $6 trillion in cumulative assets, the Berwyn, Pennsylvania-based company has long been a giant in the wealth management world. After a $4.5 billion take-private deal in 2024, the company is looking to turn the page on a tumultuous few years that began with a failed bid to go private in 2022, followed by a reported attempt at a hostile takeover. A little over a year ago, Chris Todd, a serial executive and former CEO of the software development company UKG, took the helm, and now the company has announced a massive $1 billion investment over the next five years to help supercharge growth. 

“It’s amazing how time flies,” said Todd, who marked his one-year anniversary this week. The investment is earmarked for a ground-up refinement of the product and technology stack, alongside growth in sales and service support. “It may sound pretty simple, but it builds on the legacy of what Envestnet is built on,” he said.

Advisor Upside sat down with Todd to discuss the reality of leading a $4.5 billion megafirm, and how he plans to navigate the next chapter of one of the most storied fintech firms in wealth management. 

This interview was edited for clarity and brevity.

Advisor Upside: Tell us more about your vision for Envestnet after a year as CEO and the strategy that this $1 billion investment will fund. 

Chris Todd: The touchstone word for us that we sort of talked about every single day is focus. When we look at Envestnet’s position — both the position that we have with the technology and the advisor community that we serve, and the position that we have with our managed solutions and our investment products — it’s just an incredible legacy in the business that Jud [Bergman] and Bill [Crager] built together. We think with some focus and some additional investment and continued energy, we can continue to be a leader in that space.

Envestnet has a complex business model with multiple revenue streams. How do you view the relationship between the software and the investment management sides of the business?

When we think about the core solutions for us, it’s that core UMP [Unified Managed Platform for enterprise clients], it’s Tamarack and it’s Moneyguide. And there are a variety of things that we need to do with those solutions, individually and collectively. 

As you mentioned, we have a lot of revenue streams, and on the managed account side, that for us is bi-directional. There’s a product element of it: the bits and bytes and how the advisors actually work with the solution. And then there’s the managed account side of the business as well, where we need to, and do, continue to innovate to make sure that we are on the cutting edge … and continuing to build the technologies that advisors need in order to invest their clients’ assets in the most up-to-date and progressive ways. So that continues to be a big area of focus for us as well. And that TAMP [turnkey asset management provider] works with both UMP and Tamarac, and we continue to build the business in that direction as well. 

Speaking of major pillars of the company, Envestnet recently sold Yodlee. Why did that move make sense now?

Yodlee as a standalone business was a very successful business, but where it just didn’t sort of work with the remainder of the investment portfolio is that, it turns out, the revenue opportunities between the businesses just didn’t materialize. And for us, as we thought about those core pieces of the Envestnet portfolio, the UMP and Tamarac and MoneyGuide … that’s where we’re best. That’s what the customers needed us to focus on, and that’s where we saw the most opportunity for our business. Honestly, one of the most important things that a business can do is decide where to focus, and part of focusing is deciding proactively where to put energy in … and also proactively deciding where not to put energy.

Speaking of data, how are you supercharging Envestnet’s data and tackling AI?

We believe that AI is fundamentally going to change how software is delivered and consumed. What these new technologies should do is allow advisors to be more productive, more efficient in their daily lives, so that they can support more customers and spend more time with customers, and less on back office and administrative tasks. 

You can imagine how AI can have an incredibly positive effect on financial planning, right? Why should a financial plan be a one-point-in-time solution that has to be revisited in a conscious way every year, or year and a half, or whatever? Why can’t it be in real time? Why can’t it be continually updated? You can just imagine what AI is going to do to financial planning. And we see those sorts of impacts throughout the whole value chain, and across the financial advisor work experience. 

We are also in the very early stages of working with our asset manager partners to understand how AI might impact portfolio construction and how it might impact the investing side. Then, of course, AI is a big internal productivity initiative for us as well. We’ve seen massive productivity improvements on the engineering side. We’ve seen increased efficiency on the operating side; those are the two biggest leverage points across an organization like ours.

You mentioned alternatives. How are you preparing for the shift toward private assets?

We are in the early stages of the democratization of alternatives. It’ll take a number of years for — this is a poor sentence, but — for the flows to start flowing. Alternatives are a big part of the conversation that advisors are having with their customers. I do think, in a world where the end customers continue to be better educated, they are asking their advisors about it more. But, these are different types of investing vehicles than the marketplaces have seen in a retail sense before, and so we’re super focused on working with our partners on the education around these vehicles as well. While they are, and can be, important pieces of individual portfolios, there are specific types of product, depending on the timeline and the potential uses, that are more or less applicable based on the money that’s being invested. That education element is important. 

But we do believe the business, the market, is going to continue to grow. Envestnet is an example of this: There are an ever-increasing number of private companies and a decreasing number of public companies in the marketplace [available] to create a fully diversified portfolio. We believe that over time, you’re going to need private assets in there. And so we’re making sure that we’ve got the infrastructure and the technology to support the market as it moves.