Deals & People January 8, 2024

Envestnet CEO, Co-Founder Crager Stepping Down

The firm’s board is searching for a replacement to head the wealth management and financial wellness platform and product provider.

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Envestnet Inc.’s CEO and co-founder, Bill Crager, will be stepping down from the top position while the company’s board starts a search for a replacement, the firm announced Monday.

On March 31, Crager will move from CEO to senior adviser with a focus on client and partner relationships, according to the New York-based firm. Board Chair James Fox will serve as interim CEO during the search for a successor.

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Bill Crager

Crager founded Envestnet in 1999 with then-CEO Jud Bergman. Crager, who had been president and chief executive of wealth solutions, took the CEO role after Bergman’s tragic death in a car accident in 2019.

“Under Bill’s leadership, Envestnet has grown into a leading provider of integrated technology, intelligent data and wealth solutions with $5.4 trillion in client assets and over 107,000 advisors served,” Eric Jones, senior vice president of communications, said in an emailed response.

In November, the firm announced a partnership with Empower called Retire Complete, which gives financial advisers access to a qualified retirement plan for clients that leverages Envestnet’s 3(38) fiduciary service and investment selection methodology. Jones noted that Empower “is and will continue to be a very important strategic partner of Envestnet helping advisers to grow their business.”

The announcement noted that Crager, in his advisory role, will continue to be a “visionary voice for the financial services industry” while working on client partnerships and the firm’s strategic initiatives.

“For more than 24 years, it has been my privilege and honor to work with Envestnet, creating an industry leader,” Crager said in a statement. “Starting in April, I will have the time and opportunity to focus on what I have always loved doing—growing Envestnet’s relationships and empowering our clients to provide holistic financial advice and solutions.”

Tom Sipp, Envestnet’s executive vice president, will continue to lead business lines, partnering with Crager and Fox, according to the announcement. The board, along with an executive search firm, will be considering both internal and external candidates for permanent CEO. Envestnet did not give a timeline for finding a replacement.

The firm was among the first in the financial industry to provide independent advisers with a range of fee-based products via an open-architecture platform, according to the announcement.

Envestnet reaffirmed its fourth quarter and full year guidance given on a November 8 earnings call, with expectations of fourth quarter 2023 revenue to be between $309 and $314 million and adjusted earnings before interest, taxes, depreciation and amortization of between $64.5 and $68.5 million.

 

Data & Research January 5, 2024

Older Workers Often Skeptical of Professional Retirement Advice, AARP Finds

Among those older than 50, 41% of people prefer to handle retirement planning in-house, and almost all agree advisers should work solely in clients’ best interest.

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Many workers aged 50 or older prefer to handle retirement planning themselves, and a relatively large number are skeptical of working with a financial professional on their post-work finances, according to a survey released Tuesday from the AARP.

Among those who had never used a financial professional to help plan for retirement, 41% said the reason was that they preferred to handle retirement planning themselves or, if married, to give the responsibility to their spouse. Other barriers to using a financial professional included not having much retirement savings (35%), thinking they could not afford a financial professional (30%) and not knowing if they could trust a financial professional (20%).

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Furthermore, a majority of those surveyed said they expect financial advice to be made in their best interest only, according to the retirement advocacy group.

“Of those who have either already used a financial professional for retirement planning or expect to use one, roughly nine in ten (89%) say that they expect professional financial advice to be in their best interest, and a similarly large share (87%) say that they use professional financial advice to make important financial decisions,” wrote S. Kathi Brown, of AARP Research, in a piece about the study.

Among that group, only 3% expected the advice would not be in their best interest, and 7% did not know of it would or not.

The research comes even amid widespread debate about the Department of Labor’s retirement security proposal that would tighten standards on financial professionals advising on 401(k) rollovers into IRAs, as well as on selling retirement income annuities. Just last Tuesday, the comment period for the department’s proposal, also known as the fiduciary rule, expired amid a slew of responses both from those dissenting and from those agreeing with the move.

The AARP examined how survey participants felt about the new rule, providing this prompt: “This rule says that, when giving investment advice to people with retirement savings accounts, financial professionals must give advice that is in the best interest of the account holders. To what extent do you agree or disagree with this rule?” Answers varied between strongly agree (66%), somewhat agree (24%), somewhat disagree (4%) and strongly disagree (5%).

Among those surveyed who have used a financial professional to help plan for retirement, a significant percentage of respondents (43%) did not know if their professional was required by law to give advice that was in their client’s best interest. More than half (53%) said yes, their financial professional was required to meet best-interest standards, while 4% said the financial professional was not required to.

For the group that has used a financial professional for retirement planning, the majority do trust the guidance of their advisers, with 87% saying they used the advice to make important financial decisions; only 3% reported they did not.

The AARP’s research was fielded from December 7 to 11, 2023, among 1,0002 adults ages 50 and older.

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