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came to the job with a 20-year background running en- terprise technology businesses. A serious criticism of Envestnet was that it failed to in- tegrate many of the soware programs it purchased. In conversations with the firm's 80 to 90 clients in recent months, Todd has heard that too. Clients "want to have a deeper relationship with us, and they're telling us that one of the gateways to having a deep- er relationship with us is a more integrated platform," he says. "We're sort of doing that work right now to figure out what that looks like. How do we put it together and how do we deliver value to the advisors that makes their lives easier, allows them to attract more customers, allows them to keep more assets?" To their credit, the Envestnet backers who took the company private didn't overleverage it at the same time. According to Todd, the company is valued at $4.5 billion and has about $2 billion in debt, though net debt is sig- nificantly lower if one counts cash on the balance sheet. Besides Bain, Envestnet's shareholders include Reverence Capital, Fidelity, BlackRock, Franklin Templeton and State Street—as well as Envestnet's employees. e company's balance sheet should provide it with room to invest, but the challenge is where to spend cap- ital. For many advisory firms, portfolio management soware represents the single biggest expense in their soware budget, so what advisors can spend must be fac- tored into any plan by soware manufacturers. One investment area the firm has already moved into is AI. At its annual Elevate conference in April, the company rolled out a generative business intelligence solution, Gen Meanwhile, the company was getting a reputation as a serial acquirer as much as a product developer. Its previ- ous management had bought more than 10 companies. Chris Todd, who was named CEO in January 2025 by the new owners, heard that critique. But the upshot is Envest- net now has a powerful footprint with many profitable, entrenched products. It oversees $6.5 trillion in assets, is used by one-third of all financial advisors, 48 of the 50 largest wealth management and brokerage firms, more than 500 of the largest RIAs, 800 asset managers and 17 of the 20 largest U.S. banks. A major part of Todd's mandate now is to evaluate the company's sprawling portfolio of soware properties. As a public company, Envestnet faced no shortage of sugges- tions from public shareholders, industry participants and others on how it should be run. Todd is sympathetic to the company's former managers and says the advice was oen contradictory. "Someone tells you to grow, [then] someone tells you to invest for the long term," Todd explains. "Invest for the short term. We want margin now, [or] we'll sacrifice mar- gin now to get growth tomorrow. Someone will say, 'We want you moving to custody.' Some will say, 'We want you to move into defined contributions.'" In short, being public can be an expensive distraction, which partly explains why the number of public compa- nies in America has shrunk by more than 50%—from about 7,500 in 2000 to around 3,500 today, according to the Wilshire 5000 figures. Being private gives Envest- net certain advantages. "If we see a new market we want to enter, we do have the luxury of time," says Todd, who I f Envestnet has emerged as the leader among the five major players in portfolio management software, it's not for lack of competition. The rivalry seems to grow more intense every year, as the field attracts well- known investors, and some key executives find themselves in play. Addepar, a platform started by entrepre- neur Joe Lonsdale and backed by venture capitalist Peter Thiel, was designed initially for family offices and the ultra-affluent, and it sports impressive abilities in alternative investments. It recently received a $3.25 billion valuation. Reports are that Addepar is looking to move from the super-wealthy to the merely wealthy market. As upper- middle-class Americans see their net worth surge, many are expected to add alternatives to their portfolios, Addepar's strong suit. Another leading platform is Orion, which was spun out of asset manager CLS Invest- ments years ago and has become popular in the RIA community. The firm lured former AssetMark CEO Natalie Wolfsen to take the helm as chief executive in October 2023. Earlier this year she acquired Sum- mit Wealth, run by former Black Diamond founder and CEO Reed Colley, who has become president of Orion Advisor Technol- ogy. His mission is reportedly to integrate various Orion systems, much the same as Envestnet is doing. Meanwhile, Black Diamond itself, which is now a subsidiary of fintech giant SS&C Tech- nologies, recently took over the Morningstar Office portfolio management software. The fact that a successful technology company like Morningstar exited the portfolio man- agement space speaks volumes about the level of competition. Apparently, Morning- star management concluded that financial data was its core business and decided to focus there. According to Joel Bruckenstein, producer of the T3 fintech conference, the hottest company in the space today may be Omaha, Neb.-based Advyzon. Started 12 years ago by former Morningstar tech executives, Ad- vyzon began producing low-priced software for small advisors and has steadily moved up market. There have been published reports that Schwab is interested in acquiring the firm, but management told Financial Advisor that it's not for sale. Portfolio Software Merry-Go-Round

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