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COVID-19: Client Update

July 14, 2020

When we eventually emerge from the present crisis, the wealth management industry will not look the same as it did before “social distancing” became part of the daily lexicon. The COVID-19 pandemic will have significant implications for the delivery of essential advice going forward. Staying true to our role as thought leaders, we are offering educational resources which provide the intelligence you need to stay one step ahead of industry trends and client expectations:

  • This week, we have published The Advisor’s Playbook for Leading Your Clients Forward, a comprehensive guide outlining the far-reaching impact of the pandemic, and the steps that advisors can take to adapt and serve clients better in the new reality.
  • We have also organized a webinar, “Leading Clients Forward in Uncertain Times,” in which Envestnet leaders will discuss the content in The Advisor’s Playbook in greater depth. The webinar will be moderated by Andrew Stavaridis, Executive Managing Director and Head of the Enterprise Sales Channel at Envestnet, and is scheduled for Thursday, July 23, 2020 at 4 p.m. ET. To register, click here.
  • To specifically help RIAs navigate the industry going forward, we recently published a white paper, RIA Digital Transformation: A Competitive Necessity in a Post-Pandemic Marketplace, compiled by Aite Group.
  • Our growing Envestnet Advisor Summit On-Demand content library features keynotes from myself and other Envestnet and industry thought leaders which focus on the evolution of wealth management and the delivery of advice.

Envestnet | Yodlee COVID-19 Income and Spending Trends

Envestnet | Yodlee continues to monitor income, spending, and savings data to track the pandemic’s financial impact on Americans. The latest findings from Envestnet | Yodlee’s weekly reports include:

  • Spending at hypermarkets nearly grew by double digits across income segments, with the exception of the lowest (Americans earning $35,000 or less per year) during the week ending June 23.
  • Net employment in the consumer discretionary sector remains depressed in all regions compared to prior-year levels. The Northeast has experienced the lowest year-over-year decline, thanks to consumer services businesses such as restaurants and hotels.
  • Employment in the retail industry, including apparel and specialty retail, has sharply declined among lower income groups. Some stores are opening, but many have shorter hours.

Market Pulse

Our in-house market professionals also continue to stay on top of market news and trends to help you and your clients effectively navigate the present environment. The most recent highlights include:

  • Best Quarter in Decades: The stock markets continued to advance, capping off a stellar quarter for 2Q 2020. The S&P 500 Index gained 20.5% during the second quarter, its best quarterly return since 4Q 1998, having recovered most of the sharp losses it experienced in the first quarter. The S&P 500 registered only a modest loss of 3.1% year-to-date as of the end of the second quarter.
  • Growing Concerns of a COVID-19 Resurgence: Total deaths from COVID-19 in the U.S. surpassed 130,000 last week, and total COVID-19 cases have exceeded 3 million. While there is a growing concern of a coronavirus resurgence, another full economic or national shutdown is very unlikely.
  • ISM Non-Manufacturing Index Jumped Back Above 50% in June: The Institute for Supply Management’s (ISM) Non-Manufacturing Index rose sharply to 57.1% in June from 45.4% in May, beating expectations. The above-50% reading indicates that the service sectors most affected by the pandemic are recovering and resuming expansion.
  • Initial Jobless Claims Remain Elevated: Initial jobless claims totaled 1.3 million last week. While the number of claims continues to fall, the rate of decline has slowed in recent weeks.
  • Stock Market Divergence Continues: While financial and energy company stocks struggled last week due to growing concerns of COVID-19 resurgence, technology stocks continued to advance. The NASDAQ Composite jumped more than 3% and closed at an all-time high again on Thursday, July 9.

Advisor Pulse

Advisors in our financial wellness network remain cautiously optimistic in the wake of speculation about a second round of stimulus payments and a COVID-19 resurgence.

  • Advisors developed a stronger appetite for risk last week as net flows into fixed-income asset classes waned. This is something we haven’t seen for almost two months, and the development is interesting to observe given the slow-moving market recovery. This also suggests advisors are seeing attractive equity investment opportunities.
  • Allocations to cash remained largely unchanged, inching up to 4.29% last week from 4.08% the previous week.
  • Client attrition dipped last week, demonstrating that clients are satisfied with how their advisors have been managing the current market volatility.

We’re Here for You

Our Operations and Service teams are running on all cylinders to ensure you can meet all business and client needs at this time. Please don’t hesitate to reach out if you or your clients have any questions.

Although we have a plan in place to eventually reopen our offices, the health and safety of our employees and their families are far more important. The pandemic isn’t over, and we will implement our phased plan to reopen in a flexible and considerate manner, especially with the fear of a resurgence of the virus in the headlines. To learn more, click here.

We hope you and your families are enjoying the summer. As voices for change continue to make themselves heard, we remain committed to maintaining a diverse, inclusive, and tolerant culture throughout our organization—as well as our communities.

Thank you so much for placing your trust in us. May you and your families stay safe and healthy.


Bill Crager
Chief Executive Officer

Click to View Envestnet's Coronavirus (COVID-19) Planning Update