InvestCloud to acquire Advicent and NaviPlan planning software

Global technology platform InvestCloud announced Wednesday it is acquiring financial planning software developer Advicent and its NaviPlan platform in a move that could position the firm to rival wealthtech powerhouses like Envestnet. 

Terms of the deal were not disclosed. The acquisition comes as market volatility has accelerated a focus on financial planning — a market worth $52.9 billion in the U.S. alone, and one that's predicted to grow 3.5% in 2021, according to the announcement. 

The acquisition follows InvestCloud’s recapitalization announcement in February, which pushed it to unicorn status with a $1 billion valuation. As part of the funding, Motive Partners consolidated its two portfolio businesses, Tegra118 and Finantix, into the InvestCloud platform The move could position InvestCloud to rival TAMP offerings. 

At the time, Mark Trousdale, InvestCloud’s chief growth officer, said the wealthtech company was “looking to become the Amazon for finance.” While that's an idealistic goal, InvestCloud now has the technology chops and scale to execute and compete. 

InvestCloud’s latest acquisition aims to bridge the adviser-client communication gap by combining Advicent’s cash flow, trust and tax financial planning engines with InvestCloud’s digital client and adviser platform and existing goal-based financial planning engines, according to the announcement. 

“Advicent is a highly differentiated planning engine covering the simple goal-based assessments that most of the known financial planning engines cover; however, and importantly, Advicent also has advanced retirement income scenarios and estate/trust planning focusing on the very difficult planning aspects of tax and cash flow,” John Wise, co-founder and CEO of InvestCloud, said in a statement. 

Advicent, a Vista Equity Partners portfolio company, provides financial planning technology for over 140,000 financial professionals across nearly 3,000 firms worldwide. 

The acquisition sees InvestCloud integrating the Advicent team, bringing headcount to well over 1,000. John Wise continues to serve as CEO of InvestCloud, while existing teams – including senior leadership from Advicent – remain in place. InvestCloud is the single brand for the combined company, effective today.

Angela Pecoraro, CEO of Advicent, said in a statement that the firm is “delighted to be joining forces with InvestCloud.”

The Advicent acquisition further expands InvestCloud’s global client base given Advicent’s European financial planning footprint via its European base in the Netherlands. The combined capabilities will be immediately available to InvestCloud’s existing global client base through its digital app store. 

Ultimately, InvestCloud’s acquisitions give the firm a seat at the table with end-to-end competitors, said Chip Roame, managing partner at Tiburon Strategic Advisors. “InvestCloud lacked a portfolio accounting engine. Tegra118 lacked enough front-end technology. Together, they are far more comprehensive and will compete more head-to-head with Envestnet and Orion.” 

With the acquisition of Advicent, InvestCloud now adds a well-established financial planning tool to its stack. 

Still, catching up to the likes of TAMPS like Envestnet is no small feat, especially given Envestnet’s move to add $30 million to its operating expenses this year partly dedicated to building a digital financial wellness ecosystem. The largest TAMP by assets certainly remains king, with a 35% market share, according to Cerulli.

But more fintech consolidation is on the horizon, Roame said. “Many firms enter with impressive single point solutions, but ultimately the comprehensive platforms win out,” he said, noting the sales of leading financial planning technologies eMoney and MoneyGuidePro to Fidelity and Envestnet, respectively. 

The dominant players in wealthtech, like Envestnet, have also found scale in mergers. Another top TAMP, AssetMark, realized growth recently through an initial public offering. Smaller firms have been absorbed into larger companies, such as Orion Advisor Solutions’ purchase of Brinker Capital last year or Vestmark’s deal with Adhesion in 2018. SEI announced its acquisition of Oranj’s technology platform in March, just four months after the Chicago-based fintech notified its adviser clients it was shuttering operations. 

Fellow large-scale fintechs like Vestmark and Addepar might also be acquirers, according to Roame. Meanwhile, “leading-edge single point solutions like Redtail and Riskalyze might be sellers,” he said.