Endowments And Foundations Adapting To A New Paradigm For Investment Management

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Charities find they have to play catch-up when it comes to investment management services


Envestnet, Inc. - December 5, 2013

CHICAGO, Dec. 5, 2013 -- Envestnet, Inc. (NYSE: ENV), a leading provider of integrated wealth management technology and services to investment advisors and wealth managers, has released a white paper discussing the evolving needs of foundation and endowment organizations, which have historically been underserved by traditional investment management consultants.

The white paper, entitled "Endowments and Foundations: Adapting to a New Paradigm," explains that while endowments and foundations managing investments for underlying charities and community foundations are typically exempt from Investment Adviser Act of 1940 registration, they nevertheless have many of the same needs as their registered counterparts. Envestnet's research shows that the expectations of charitable donors are strongly influenced by the level of investment management services they receive in the for-profit investment sector, and many charities find themselves having to play catch-up.

"Donors expect philanthropic organizations to provide the same caliber of service as their banks, brokerage firms and custodians, but these non-profits lack the integrated technology solutions they need to effectively compete for donor assets," said James Lumberg, Co-Founder and Executive Vice President, Envestnet. "Our white paper shows that the most time-efficient and cost-effective way for charities to modernize their investment management operations is by partnering with providers of scalable and transparent solutions."

The mistaken belief that up-to-date technology solutions are too expensive and complex has kept some non-profit organizations from bringing their operations into the 21st century. However, the white paper explains how non-registered investment advisors can obtain more "bang for their investment consulting buck" by outsourcing to technologically savvy investment service providers, such as RIA platforms, turn-key asset managers (TAMPs) and broker-dealers. These businesses can offer solutions that cover a non-profit organization's fiduciary and governance, reporting, operational and investment consulting needs.

"Non-registered investment advisors who fail to embrace the new paradigm of technology, transparency and collaboration will fall farther and farther behind," said Pamela Fennell Jacobs, Principal, PFJ Consulting LLC, who serves as a consultant to Envestnet and co-wrote the white paper with Mr. Lumberg. "Those that have are the fastest-growing segment among their peers, and many philanthropic organizations are surprised to learn that upgrading their technology saves them more time and money than creating their own solutions from scratch."

To access this white paper, please visit www.envestnet.com/library/whitepapers.


Envestnet, Inc. (NYSE: ENV) is a leading provider of unified wealth management technology and services to investment advisors. Our open-architecture platforms unify and fortify the wealth management process, delivering unparalleled flexibility, accuracy, performance and value. Envestnet solutions enable the transformation of wealth management into a transparent, independent, objective and fully-aligned standard of care, and empower advisors to deliver better results.

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