Axos Clearing, the clearing and custody arm of Axos Financial, this week announced a strategic partnership with Envestnet.
The partnership will see Envestnet’s managed account solutions integrated into Axos Clearing’s Axos Complete, its workstation for registered investment advisors, hybrid advisors and independent broker/dealers. (Axos itself already provides trade execution, account management and compliance tools to its client firms.)
The new partnership and integrations with Envestnet will help streamline portfolio management, enable Axos to automate portfolio rebalancing and reporting, and ultimately allow the firm to offer a wider menu of investment options.
For example, although this partnership does not include access to Envestnet’s partnerships with BlackRock, Fidelity Investments, Franklin Templeton and State Street Global Advisors, which were announced in June, it nonetheless will create the technological plumbing to allow those to be turned on, according to both David Crow, executive vice president and head of Axos Clearing, and Molly Weiss, group president of wealth management platforms for Envestnet. (In October, Franklin Templeton announced the first portion of its part in the expanded partnership with Envestnet to deliver tax-managed, personalized strategies at scale through its Canvas Custom Indexing platform.)
“It really is about delivering the broader ecosystem and technology and capabilities and service in as synergistic a way as possible,” Crow said of the new partnership with Envestnet. “Ultimately, it is about choice, about giving firms the ability to say ‘I want to manage my own [investments],’ or ‘I’m the manager and sponsor,’ all the way up through and including all the productized and outsourced asset manager options.”
He said while it is not immediately available, his technology team and Envestnet were working toward the rollout of an early version of the integration by the end of the year or early in the first quarter of 2025.
“That is the way by which our clients will access this great new capability and the products available through it,” Crow said.
Envestnet’s Weiss said with the industry moving ever more toward fee-based models, delivering the technology to support managed accounts is important. Also important is what the asset managers can bring and making it easier for firms like Axos to access asset manager networks, sophisticated tax overlays and other capabilities.
“It is very representative of what we are hyper-focused on at Envestnet,” she said.
“This is a great example of Envestnet’s secret sauce, being integrated into someone that has a great custody and clearing offering,” she added.
Crow said in addition to the managed account announcement, Axos has on its roadmap the addition of banking services for hybrid RIAs and IBDs.
“In the not-too-distant future, you will also be able to see and do banking [from within the Axos Complete platform], as we are part of a larger organization that has retail banking, and we are leaning in on our native capabilities at the bank,” he said referring to Axos Bank.
Axos Clearing currently than $33 billion in assets across 65 IBDs and 233 RIA clients.