Magazine article American Banker

Envestnet-Yodlee Deal Shows Convergence of Wealth, PFM Worlds

Magazine article American Banker

Envestnet-Yodlee Deal Shows Convergence of Wealth, PFM Worlds

Article excerpt

Byline: Suleman Din, Robert Barba

Wealth management products and personal financial management tools are converging, but a gap remains between the industries. To Envestnet, the way to bridge that gap is by buying Yodlee.

The $660 million cash and stock deal, announced late Monday, brings together two tenured players in their respective sectors and is something of a watershed. However, it fits into a larger context of wealth management product firms on the hunt for acquisitions that will keep them competitive against the rise of the robo-adviser.

The deal, expected to close in the fourth quarter or next year's first quarter, "accelerates the transformation of financial technology by delivering better relationships and greater lifetime value than connecting financial advisers, individuals, and service providers," said Jud Bergman, Envesnet's chairman and chief executive.

It helps "advisers to cross what we call the digital divide, a divide that separates many advisers from their best prospects and clients," he said in a conference call late Monday.

Earlier this year, Chicago-based Envestnet looked into working with Yodlee, in Redwood City, Calif., to provide its clients with a better understanding of investors' various holdings and assets, Bergman said. But talk of partnering evolved into deal negotiations.

"As we began to look at the benefits of this integration we became increasingly positive about how transformational a merger could become," Bergman said. …

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