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Envestnet’s Crager to Step Down as CEO

By Janet Levaux

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Envestnet said Monday that Bill Crager will give up his role as CEO on March 31. He will then serve as a senior advisor to the turnkey asset management firm.

Crager co-founded Envestnet in 1999 with Jud Bergman, who died in 2019 in a car accident at age 62. The firm immediately named Crager as its interim CEO, and he was tapped as its ongoing CEO in March 2020. 

Envestnet worked with some $5.4 trillion in client assets and over 107,000 advisors as of Sept. 30, 2023. 

“Starting in April, I will have the time and opportunity to focus on what I have always loved doing — growing Envestnet’s relationships and empowering our clients to provide holistic financial advice and solutions,” Crager said in a statement.

“This transition gives me a front-row seat for our next chapter and I look forward to continuing our journey,” added Crager, who has been with Envestnet for 24 years.

Board Chair James L. Fox will serve as interim CEO as of April 1, while Tom Sipp, an executive vice president, will continue to manage the firm’s business lines in partnership with Crager until the firm has named his successor.

Crager “has led the charge in the ongoing expansion of the firm’s innovative financial wellness network. He is an inspirational leader who set the bar for our quality client solutions and services,” Fox said in a statement.

“Bill also built a strong and experienced management team and we’re confident in their ability to continue to execute our strategy,” Fox added. “On behalf of the Board and the entire company, we want to thank Bill for all he has done for Envestnet as CEO and his continuing partnership.”

Envestnet’s stock has fallen nearly 24% in the past year but is up close to 14% in the past 30 days. As of late morning Monday, its shares traded up 2.61% at $49.51.

The firm plans to report fourth-quarter 2023 earnings on Feb. 7.

‘Little Surprise’

Crager’s departure is likely a “little surprise to many, including us,” Doug Fritz, co-founder and CEO of the consultancy F2 Strategy, said in an email to ThinkAdvisor. While influential, the firm “seems to be underperforming in fast-growing segments of the industry, such as RIAs.”

A key hurdle for Envestnet, Fritz says, seems to be “internal fragmentation, with entities like MoneyGuide, Yodlee, Tamarac, Harvest and its TAMP/UMA each functioning independently. This lack of a unified Envestnet strategy may be part of the issue.”

Would a new chief executive close this gap?

“That remains unclear,” Fritz explained “but it seems doubtful. Bill is a smart guy, and I’m confident that if aligning these elements were straightforward, he would have already done so.”

The Next CEO

As for what Envestnet’s board will be looking in Crager’s replacement, technology consultant Craig Iskowitz said on X, formerly Twitter: “It’s not going to be an easy gig but certainly a challenge for the right person!”

The new CEO must figure out “how to boost revenue, keep existing clients happy, what to do with Yodlee (if the rumors are true) and whether to restart M&A or even explore a sale of the company to a strategic investor,” explained the head of Ezra Group on X.

In mid-December, Bloomberg reported that Envestnet was considering the sale of data aggregator Yodlee, which it bought in 2005.

Envestnet’s board will likely pick a new CEO with “strong roots in the TAMP space, since this is where the majority of their revenue comes from,” Iskowitz pointed out.

He suggests that the firm not overlook “fintech experience and marketplace understanding (insurance, credit, trust) which I believe are a huge growth opportunity.”

“No other vendor has the breadth and depth of offering plus service and support and comparable client base that Envestnet has,” said the consultant, adding: “Of course, as the market leader, everyone is gunning for you. There’s lots of competition nipping at their heels but even with the many issues they have faced, they’re still in front.’

If the firm picks a product leader who has integrated services before, Envestnet could “push toward a more cohesive user experience,” said Fritz.

But Envestnet could hire a CEO to streamline its “focus on core operations, potentially selling off some of the less profitable business lines to bolster successful ones,” he explained — moves that would make investors happy.

In the end, the selection “will shape Envestnet’s strategy for the next decade or more … [and] build upon Bill’s legacy and carry the firm’s vision forward,” Fritz said.

Janet Levaux

@Think_JanetL

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