Envestnet Launches Model Programs for RIAs and Broker-Dealers
Envestnet has launched two programs that let advisors work with asset managers on customized model portfolios: Custom Model Solutions for RIAs and Institutional Partner Models for broker-dealers.
Participating managers include BlackRock, Envestnet PMC, Fidelity Investments, First Trust, Franklin Templeton, Goldman Sachs Asset Management, Invesco, Northern Trust Asset Management, Russell Investments and T. Rowe Price.
Envestnet will handle trading, billing and reporting for both programs. Managers may cover all or part of the platform fee. Depending on the program, RIAs may also pay no tax-overlay fee.
Under Custom Model Solutions, an asset manager builds and maintains a model strategy based on the advisor’s investment parameters. The advisor reviews and approves the model and can work with the manager to refine it. Envestnet then executes trades at the adviser’s direction.
Firms can add Envestnet’s Fund Strategist Tax Management overlay where appropriate. That gives RIAs a tax-managed way to run their custom models without building the capability themselves.
Firms can choose RIA discretion, in which the advisor approves model changes before they take effect, or Envestnet discretion, in which Envestnet makes changes on the firm’s behalf. Envestnet’s Proposal Desk supports onboarding and conversions.
“Custom Model Solutions lets advisors maintain ownership of their investment preferences while outsourcing the operational work that doesn’t differentiate their business,” said Sean Meighan, head of RIA distribution at Envestnet.
Broker-dealers can make Institutional Partner Models available to select financial professionals. Each engagement requires a separate Envestnet committee review and legal contract.
“By standardizing the program and waiving certain fees, we’re making it easier than ever for asset managers and advisors to work together, and for RIAs to bring a differentiated offering to their clients,” said Dana D’Auria, executive vice president of wealth solutions and chief investment officer at Envestnet.