Envestnet, Inc

Good day, everyone, and welcome to the InvestNet first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, today's call is being recorded. At this time, I would like to turn the conference over to Ms. Stephanie Dawkus, Investor Relations, Thank you. Please go ahead.

Thank you, and good afternoon. With me on today's call are Bill Krager, Chief Executive Officer, and Pete Dorigo, Chief Financial Officer. Our first quarter 2021 earnings press release supplemental presentation in associated form AK can be found at investment.com under the investor relations section. During the call, we will be discussing certain forward-looking information, Such comments are not guarantees of future performance, and therefore, you should not put undue reliance on them. We also will be discussing certain non-GAAP information. Please refer to our press release and SEC filings for more information on forward-looking statements, risk factors associated with our business, and required disclosures related to non-GAAP financial information. This call is being webcast live and will be available for replay for one month on our website. All remarks made during the call are current at the time of the call and will not be updated to reflect subsequent material developments. We will take questions after a prepared remarks. With that, I will turn the call over to Bill.

Thank you, Stephanie, and thank you, everyone, for joining today. It is good to be speaking with you. InvestNet is building the ecosystem for financial wellness, connecting actionable data seamless technology, and the deepest set of solutions to enable an intelligent financial life. We are uniquely positioned to do this, and we are investing to execute on the significant opportunity that we see for our company. This will drive faster growth, ultimately greater profitability, and we believe much higher value for investors. Today we plan to highlight the following. First, the progress we're making towards creating the ecosystem for financial wellness. Next, I will discuss the scale we bring to the market and how it enables our strategy. We'll spend time on the opportunities we see for revenue growth acceleration. This includes capturing more of the existing addressable market. Second, modernizing the digital engagement marketplace to connect clients' questions to advisors and actionable solutions. And finally, opening the platform for expansion to more solutions providers and developers. I'll then highlight the organizational progress that we're making. Pete will highlight the company's strong financial performance in the first quarter. And then Pete and I are looking forward to your questions. So let's start. Let's start with the progress that we're making. During the first quarter, InvestNet continued to deliver strong financial performance. We executed high volumes of activity and advanced our strategic position as the financial wellness ecosystem provider for the industry. The ecosystem provides the tools and intelligence to our clients to power an extraordinary value proposition for consumers. This is an intelligent financial life connected to from the daily cash that people spend to the long-term goals they seek to achieve? How can people optimize the impact of their financial decisions? How does one decision impact another? How do people become more confident in the decisions that they're making? We are answering these questions with technology and data and access to an industry-leading network of financial solutions which we know is the financial wellness ecosystem. During the quarter, there were important examples of how we are advancing this vision. With the launch of our money guide borrowing blocks, clients are empowered to make better credit decisions. In a click, advisors will access a full range of credit offerings in our advisor credit exchange. You see, the consumer questions, the advisor answers and is able to execute. all of this intelligently connected. The acquisition of Harvest savings and wealth technology leverages our existing bank relationships and brings capabilities that opens all of a bank's accounts to our addressable market. For instance, savings accounts, creating a much broader solution set to this important channel. Harvest gives banks the ability to use savings accounts as launch points for people to plan for their future enabling micro-savings which can connect to investment accounts, again, intelligently connecting people's financial lives, offering answers, and the ability to take action. We also announced the launch of TruSendant, a network of trust capabilities that benefits advisors by streamlining the process of establishing trust accounts and benefits end clients by bringing down costs and account minimums. This capability is connecting to our legacy studio, which helps family develop estate plans for next generations. Once again, answering questions, supporting decisions with the ability to execute, all intelligently connected. Each of these examples show our vision in action, providing practical, actionable information to address a person's financial question or need, intelligently connecting the dots of their financial life. We are extending these capabilities to our full suite of solutions, significantly broadening the range of intelligent connections, in each case powering more insights and more actionable results. It is important to understand the scale and activity of what we do and how it enables us to achieve the opportunity that we see. Today, we serve $4.8 trillion in assets. We power more than 2 million financial plans a quarter. During the quarter, we executed 50 million trade orders, onboarded 42 billion in conversions. We service 500 million aggregated accounts each day. We have relationships with over 5,200 companies, which is up from 3,200 companies just three years ago. Leveraging the scale of what we do while meeting the growing demands of our clients also enables us to extend the services and solutions we offer, and conveys the possibility of what's ahead. We have built and we are utilizing the foundational essential building blocks of the financial wellness ecosystem. This scale is key to executing on the growth strategy we presented to investors last quarter. I want to spend some time on revenue growth accelerators. We have three areas of focus to accelerate our revenue opportunity. Our first focus is capturing more of the addressable market that already resides on our platform. Asset-based solutions are an important part of this opportunity. In the first quarter, solutions such as overlay, impact, and direct indexing continue to post strong double-digit growth rates across assets, advisors, and accounts. We now have over 20,000 advisors accessing solutions through more than 400,000 accounts representing more than $40 billion in assets. But this is just a small fraction of the captive addressable market that we have within our current account and an asset base. And our organization is focused on going deeper. The powerful advantage we have in doing this for these solutions and other important focus areas is our data recommendation engine, which provides a depth of actionable insights which changes how customers can achieve their important objectives while accelerating InvestNet's growth. I want to spotlight a use case of transitioning brokerage accounts to managed portfolios. A large bank client of ours has made a push towards more goal-aligned managed portfolios to meet the long-term needs of their clients. They are users of our managed account platform, and as we engage with them about their goals, we introduce them to our end-to-end data framework approach, which helped identify the scope of opportunity inside the current brokerage business. We identify the accounts most likely to benefit from the managed portfolios and then help the banks provide actionable tools to their advisors to engage these accounts. The results are important to note. We have observed a doubling in conversions since recently launching the capability to all of their advisors. This is meaningfully ahead of the activity our client had seen in the past. This is just one example, just one client and one use case. As we step back and extrapolate this opportunity to more firms and more use cases, like tax overlay, impact, direct index, brokerage to managed accounts, rep advised to fund strategist portfolios, credit opportunities, trust, insurance, and beyond, it becomes apparent how we can benefit customers, create opportunity for our clients, and execute on a near-term attainable and large growth accelerator for InvestNets. Our second growth focus is on modernizing the digital engagement marketplace, seamlessly connecting consumers' pressing financial questions to the execution of the solution by the largest network of advisors in the industry. We are launching a game-changing client engagement portal that we are confident will become the leading digital storefront for the industry. These tools make advisors and their offerings accessible in real time from anywhere to answer the questions that their clients have. It is a superpower for advisors, and as financial lives become more and more fragmented, the client portal becomes the hub for client engagement. The intelligence of our financial planning infrastructure connects to the portal and threads the consumer's experience to actionable services to achieve their near and long-term goals. To help advisors execute on these opportunities, we are more seamlessly connecting all solutions and exchanges to all advisors. We are also rolling out a new trading platform that brings together the best of all of InvestNet's leading capabilities to advisors across every channel. The third focus of our growth strategy is to open our platform for expansion so our capabilities and data set are enabling the greater ecosystem of solution providers and developers. This past quarter, we announced the launch of MoneyGuide Engine, which opens financial planning APIs to the industry, and over the coming quarters, we'll bring to market one complete ecosystem of APIs for the entirety of the InvestNet universe. This will do two things. One, it will open up distribution of our solutions to the fintech and embedded finance marketplaces. And secondly, it will open InvestNet's financial wellness ecosystem to a greater array of third-party providers, creating more and more choice for our clients. This universe of APIs will enable us to power financial wellness for more people and will drive growth for InvestNet. Here's a brief update on organizational progress. Let me take a moment to shine a light on the immense effort of the InvestNet team. Across our business, activity is elevated. We are working remotely. We are making progress on our vision. We are integrating to bring the power of InvestNet to all of our clients. and we are driven by an important purpose. The team is making this happen, and I am proud of the work that we are doing. It takes discipline and commitment to achieve our goals. The organization is aligned and moving forward. This quarter, we onboarded key new leaders across our business, including a new chief marketing officer, a new chief data officer, and a new head of market intelligence. as we continue to sharpen and align the organization to make faster progress. We now have the leadership and talent to operate as a more streamlined organization and to capitalize on the large opportunity that we see ahead. We posted strong results and have enhanced our capabilities across the platform last quarter. We've enhanced the organization. We will lead and support the industry every step of the way. Investment is building the ecosystem for financial wellness, connecting actionable data, seamless technology, and the deepest set of solutions to enable an intelligent financial life. I'll be back with some closing comments in a moment, but please let me turn it over to Pete.