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COVID-19: Client Update

September 3, 2020

When Envestnet was established 20 years ago, we sought to help independent advisors provide essential advice for the life of every client relationship. We had a vision of helping to position advisors to add value and remain competitive over the long term, regardless of changes to the industry, financial markets, and client needs.

Two decades later, we are proud to be at the forefront of enabling advisors to improve outcomes for more Americans across the country. As our industry prepares for significant changes in the wake of the COVID-19 pandemic, Envestnet is here to educate advisors about how the delivery of essential advice will change—and how they can adapt.

We continue to strengthen the unified advice platform driving our financial wellness network, combining innovative technology with data-driven intelligence that expands the advice provided to clients. Far from resting on our laurels, Envestnet | Tamarac has continued to perform so well that Aite Group’s August 2020 industry impact report named it the “Best-In-Class” portfolio management and reporting system vendor.

As we look back over our accomplishments and accolades, we see more clearly than ever that we couldn’t have done this without you, our advisor partners. You have placed your trust in us and stayed with us every step of the way along this journey. To commemorate the strides we have made with your help, Envestnet has launched a special 20th anniversary microsite looking back at how we got here and looking forward to where we are going. Check it out here.

Envestnet | Yodlee COVID-19 Income and Spending Trends

The latest findings from Yodlee’s bimonthly reports tracking Americans’ income, spending, and saving trends during the pandemic include:

  • Year-over-year discretionary spending continued to trend down regionally across the U.S. in August, with the Northeast recording the greatest decline by percentage.
  • Spending in the media and entertainment sector is experiencing an uptick, with companies such as Electronic Arts citing revenue growth as a result of the pandemic.
  • Net employment in the consumer discretionary space remains depressed in all regions of the country, with the Northeast experiencing the highest decline.
  • Since April, New York has experienced the greatest year-over-year decline in consumer services in the country.

Market Pulse

Our in-house market professionals remain on top of market developments to help you and your clients navigate present conditions:

  • Stock Market Jumped in August: Driven primarily by the strong performance of technology stocks, the equity markets surged last month. The broad S&P 500 Index rose more than 7%, its best August performance since 1986. The S&P 500 gained nearly 10%, and the tech-heavy NASDAQ Composite Index increased by more than 30% year-to-date through August 30.
  • Fed Signals Policy Shift: Federal Reserve Chairman Jerome Powell said in a recent address that the Fed would tolerate periods when inflation runs higher than 2%, rather than preemptively raising interest rates to contain inflation. This policy shift is likely to cause interest rates to stay low for a longer time.
  • Housing Market Booming: Sales of existing homes soared 24.7% in July from June, and were 8.7% higher than July 2019. The median price of a home sold in July jumped 8.5% from a year ago to $304,100, a record high.
  • 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.
  • New COVID-19 Infections Slow: While total COVID-19 cases in the U.S. have surpassed the six million mark, new cases are declining. New infections in the U.S. fell below 34,000 at the end of August, a sharp decline from nearly 70,000 at the end of July.

Advisor Pulse

As the summer draws to a close, so does the first stage of the recovery, which was driven by Federal Reserve actions and federal stimulus aid. As we enter the next phase of the economic recovery, we observed advisors in the Envestnet network reducing exposure to Large Cap Value and Core mutual funds and ETFs—and putting more protected cash back to work.

  • During the final week of August, cash allocations retreated to near pre-pandemic levels, closing at 3.78%. While this may not appear significant on the surface, cash allocations previously hovered in the low-4% range for roughly 10 weeks.
  • Net client acquisitions, as measured by the net of new and lost clients, ended the month of August in positive territory, demonstrating that advisors have successfully gathered new client assets last month.
  • While advisors continue to update clients’ expectations around risk and return, the number of changes to risk tolerances was down by 3% last week—and only 5% above the trailing 52-week average.

Have a Happy & Safe Labor Day Weekend

Even as we mark our 20th anniversary, we joined the rest of the country last week in celebrating the 100th anniversary of the ratification of the 19th Amendment to the Constitution. We stand in awe of what the brave suffragists of yesteryear managed to achieve on behalf of gender equality.

While our nation has come a long way, there are still many miles to go. Envestnet remains committed to strengthening racial and gender equality in our industry, as well as the communities where our employees and customers live and work.

The upcoming Labor Day holiday offers us an ideal opportunity to express our gratitude to our teams, and yours, for everything they do all year round. I wish you and your families a happy, healthy, and safe holiday weekend.


Bill Crager
Chief Executive Officer

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