Envestnet, Inc

Greetings. Welcome to the InvestNet third 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. Please note this conference is being recorded. I will now turn the conference over to your host, Brian Shipman, head of investor relations. You may begin.

Thank you and good afternoon, everyone. Welcome to InvestNet's third quarter 2021 earnings call. Before we begin, I'd like to point out that our earnings press release, supplemental presentation, and associated form 8K can be found under the investor relations section of our website at investnet.com. This call is being webcast live and a replay will be available for one month on our website. During the call, we will be discussing certain forward-looking information, which is not a guarantee of future performance, nor are we obligated to update our commentary to reflect subsequent material developments. Before we discuss our results, I encourage you to review the cautionary statement on slides two and three for our customary disclosures. Further information can be found in our regular SEC filings. In addition, please refer to the appendix in our slide presentation for reconciliation of our non-GAAP measures to the most directly comparable GAAP measures which is also posted to the InvestNet Investor Relations website. Joining me on today's call are Bill Krager, InvestNet's Chief Executive Officer, and Pete DiRigo, the company's Chief Financial Officer. Bill and Pete will provide a company update as well as an overview of the company's third quarter 2021 results. After our prepared remarks, we will open the call to questions. During the Q&A, please limit yourself to one question plus one follow-up. You may get back into the queue if you have additional questions. With that, I'll now turn the call over to Bill.

Thank you, Brian, and thank you, everyone, for joining today. InvestNet achieved strong adjusted revenue growth of 20% for the quarter and 18% year-to-date. Our new guidance reflects an improved outlook for the full year 2021. You'll hear more about our results from Pete following my opening comments. Our commitment to our vision and strategy continues as we create the financial wellness ecosystem that enables the future of advice and makes possible an intelligent financial life. There is excitement about what we're doing inside the company and in the marketplace. We are driving innovation. We are threading technology into everything we do. We are using data to elevate incredible insights to our clients and our partners. We are continuing to add to our industry-leading marketplace of solutions. You see, InvestNet is differentiated from every other provider as a fully connected, open architecture, hyper-personalized partner that is paving the way for the future of our industry. We are executing on our roadmap, and it is absolutely resonating with our clients. We previously shared our strategy with you and outlined the steps to accelerate growth by first capturing more of the addressable market. We're already a market leader with $5.4 trillion in platform assets, but we can deliver consistently higher revenue growth by deepening our relationships and offering new and better solutions to our over 108,000 financial advisors and our growing roster of more than 625 fintech firms. Secondly, we're modernizing the digital engagement marketplace. Investnet continues to innovate and implement meaningful enhancements to our cloud-based, API-driven platform. This will improve user experience and create new opportunities for revenue growth. And finally, establishing our open platform as the driver of the ecosystem. There are more connections to more developers and more firms continue to expand and vitalize our environment. Over the past quarter, we saw an increase in participants across both our data business and our wealth business. InvestNet is also capitalizing on a number of compelling trends that accelerate our progress. Let's start with demand for technology and automation that is absolutely increasing across the board. And this is all ages, all generations, from baby boomers to Gen Z. Another very important trend has to do with open banking. Open banking leverages technology to deliver consumer permissioned, highly personalized services and solutions. Every fintech and financial institutions will need open banking capabilities to compete in the future. We believe that Yodlee powers the most advanced global functionality for open banking. This is an accelerating advantage for our clients and their consumers. We also continue to benefit from the growth of fee-based advice and the even faster growth of managed accounts. We're outpacing the industry. Over the last five years, InvestNet AUM&A organic growth rate has exceeded the managed account industry each and every year by approximately 500 basis points. We're also seeing a meaningful growth of personalized services like direct indexing, like impact investing, and a heightened interest in tax services. Last trend, clearly data is incredibly valuable. InvestNet has assembled a significant data set. We have also strategically built data solutions that bring insight and actionable intelligence, which is a unique and substantial advantage for our company. These trends create a remarkable opportunity for InvestNet, and we are well positioned to take advantage of them. We now have $5.4 trillion in assets across 108,000 advisors, an increase of $240 billion in assets over the last quarter. We continue to see assets moving from AUA to AUM. We also continue to see new account opening accelerate. We are now opening more than 20,000 new accounts every week. We've also added several new large financial institutions over the quarter, which has helped us reach a total of 17.3 million accounts that we serve. In addition, the average number of accounts per advisor on our platform grew 9% year over year. Advisors are serving more and more of their clients using our technology and our solutions. We're also leading in areas that are super important, and they're growth drivers for our clients today. These are personalized services like direct index portfolios, like sustainable investing strategies, which have grown by 86% year over year, showing the increasing focus on ESG and impact investing. There's also tax management services, and let me just spotlight our offering here. We are using our rich internally generated data to identify advisors with accounts that would specifically benefit from our tax overlay offering. 19 new firms, 19 new firms have enabled tax overlay to their advisors and several hundred advisors use tax overlay for the first time since June 1st. This includes several new large enterprises using our tax services. There are also emerging activities that are exciting, like our embedded investing effort. This opens up access to our capabilities for millions and millions of additional consumers. These services are making promising progress as we engage more deeply with our clients and a bevy of new prospects. We are investing in our leading technology to connect the best of InvestNet, enabling advisors to serve the entirety of their clients' financial lives. There are many exciting developments making their way to market. In September, we piloted our next generation proposal tool with over 100 clients of ours. The feedback has been overwhelmingly positive. the result of taking a customer-focused approach and working with them to design an even better technology solution. We continue to expand the industry-leading set of solutions we provide, powered by and integrated into our technology and data. We recently announced a partnership with Yieldex, and Yieldex is a fintech that offers cutting-edge tools to advisors, helping them build more efficient fixed income portfolios. This partnership complements the capabilities of InvestNet's Insurance Exchange. By combining YieldX and the InvestNet Insurance Exchange and other really important steps that we are taking, we are assembling the industry's leading marketplace of income and protection solutions. We are creating the centralized source that enables advisors to offer the most comprehensive end-to-end solutions for income and protection, which is an essential need for retiring individuals. There's real momentum in our efforts, as the InvestNet Insurance Exchange recently surpassed $1 billion in insurance assets served. You may have noticed InvestNet in the media this past quarter. We recently launched a new campaign aimed at our industry with the tagline, Fully Vested. The initial response has been significant with a tenfold increase in digital traffic, validating our alignment with our clients and how they see the future of advice and how InvestNet is powering it. We are growing awareness of the solutions we offer, creating familiarity with our brand and setting the stage for future offerings. As I stated at the beginning of this call, InvestNet had a very strong quarter. We have made progress on our strategic roadmap, We are executing in all areas of our business and we are delivering strong financial results. Peter is going to provide more detail for you now. I'll be back with some closing comments and take your questions following that.