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Woa, some MEGA advisor #FinTech news just out... @ENVintel is acquiring @MoneyGuidePro. For half a BILLION dollars of cash + stock...
The waves from this will be rippling across the entire industry...
The waves from this will be rippling across the entire industry...
From the strategic perspective, the @MoneyGuidePro deal makes a ton of sense for @ENVIntel. MGP has a massive client base, including a huge overlap with Envestnet's own broker-dealer enterprises. It lets Envestnet expand market share and wallet share where it already is.
Suddenly, the recent three-handed deal between Edmond Walters' new Apprise along with Envestnet and MGP seems 'less weird', though. With Envestnet's acquisition of MGP, it's now really just a two-handed deal between Walters and Bergman.
More broadly, the MGP acquisition sets up a massive pitched battle between Envestnet's MGP and Fidelity's eMoney Advisor. Which may still be an uphill battle for Envestnet, as eMoney has steadily been gaining market share against MGP in recent years, especially in enterprises.
But MGP's primary weak point has been the lack of a full-scale PFM solution w/ the kind of client portal capabilities that eMoney has. With Envestnet's Yodlee, that problem is now eminently solvable. Expect to see a robust PFM portal solution from MGP in the coming year or two?
For other #FinTech enterpreneurs in the industry, the most eye-popping part of the MGP deal is simply the pricetag: half a BILLION dollars in cash (60%) and Envestnet stock (40%).
MGP has always been tight-lipped about its financials, so it's hard to judge the pricetag. But Envestnet states it will be immediately accretive to their own EBITDA, suggesting that in the end that pricetag was still at least a 'reasonable' multiple of MGP's profits/cash flows.
The biggest 'loser' in this deal appears to be @AdvicentFP, which has already struggled from the competitive enterprise pressures of eMoney and MGP. Now with Envestnet's backing, and cross-selling to Envestnet enterprises, that competition gets fiercer.
Acquisitions always create turmoil and fears for software users as well, but my gut is that MGP users have nothing to 'fear' here. Envestnet didn't pay $500M to 'ruin' MGP. They paid to get it and grow it further, and bring more tech synergies to bear (especially w/ Yodlee).
After Envestnet announced its "sudden" PortfolioCenter acquisition from Schwab, though, I do wonder if competitors will be similarly stunned about MGP. Because LOTS of firms wanted to buy MGP. For years. Bob Curtis was 'never' interested in selling. Guess Jud changed his mind?
Bottom line: the MGP acquisition is a real coup for Envestnet, and when coupled with Yodlee, is a profound shift in Envestnet's focus from its investment/SMA roots into a full-scale advisor tech platform with a financial planning focus.
Still, though, MGP has catching up to do as financial planning shifts away from modular goals-based planning (popular in B/Ds selling products) towards full-scale fee-for-service comprehensive financial planning. A big win for Envestnet, but they can't rest on their laurels here.
