Chris Curtis - SVP, Treasurer Jud Bergman - Chairman and CEO Pete D'Arrigo - CFO.

Chris Shutler - William Blair Alex Kramm - UBS Patrick O'Shaughnessy - Raymond James Chris Donat - Sandler O'Neill David Grossman - Stifel. Peter Heckmann - Avondale.

Good day everyone, and welcome to the Envestnet Fourth Quarter 2014 Earnings Conference Call. As a reminder, today's presentation is being recorded. At this time, I would like to turn the conference over to Mr. Chris Curtis, Senior Vice President and Treasurer. Please go ahead, sir..

Thank you. Good afternoon everyone. With me on today's call are Jud Bergman, Chairman and Chief Executive Officer; and Pete D'Arrigo, Chief Financial Officer. Our fourth quarter press release and associated Form 8-K can be found at envestnet.com under the Investor Relations section.

During this conference call, we will be discussing certain non-GAAP information, including adjusted revenues, adjusted EBITDA, adjusted net income and adjusted net income per share. This information is not calculated in accordance with GAAP and may be calculated differently than other companies' similarly titled non-GAAP information.

Quantitative reconciliations of our non-GAAP financial information to the most directly comparable GAAP information appear in today's press release. During the call we will also be discussing certain forward-looking information. These discussions are not guarantees of future performance and therefore you should not put undue reliance on them.

These statements are subject to numerous risks and uncertainties that could cause them to differ materially from what we expect. Please refer to our most recent SEC filings as well as our earnings press release, which are available on our website for more information on factors that could affect these matters.

This call is being webcast live and will be available for replay for one month on our website. All remarks made during the call are current at the time of the call. They will not be updated to reflect subsequent material developments. We will take questions after our prepared remarks. And with that, I will turn the call over to Jud..

Thank you, Chris. Hello everyone, I add my own welcome to you this afternoon. On today's call, I will review our fourth quarter and full year results, describe our business strategy in some broad strokes, and provide a sense of what we expect to achieve operationally and financially in the coming year.

2014 was a year of significant achievement for investment. Business activity was strong across all channels and product offerings. Including conversions, assets under management or administration growth sales was just shy of $100 billion. During the fourth quarter, Envestnet surpassed two important milestones.

We now serve more than 40,000 advisors and support over 700 billion in total platform assets. This translates into almost 3 million investor accounts on the platform.

We also continued our strategic efforts during the year with the development of Envestnet retirement solutions for the advisor assistant 401 K plan market earlier in the year and the acquisition of Placemark in the fourth quarter.

Additionally, we completed a successful capital raise of some $172 million through our convertible note offering in December. This is important for us as we execute on our multi-channel and multi-portal platform strategy.

These additional resources which leverage our existing business provide significant opportunity for continued top and bottom line growth in 2015 and beyond. As we hope the financial advisory industry transform from an opaque and misaligned system to one that is transparent, objective, and one that follows our fiduciary standard of care.

Our NorthStar is to empower the advisor to be more productive and deliver better client outcomes. Our cloud based technology and services deliver powerful and unified solutions for advisors to deliver sophisticated strategies that benefit clients and provide operational lift for the advisors practice.

Our mission to empower advisors to deliver better client outcomes and to unify and fortify the entire wealth management process drives our business strategy. During the fourth quarter we continued to drive growth on several fronts.

Including the acquisition of Placemark, we added more than 4,000 advisors to our platform bringing the total number of advisors to more than 40,000. Nearly 29,000 of these advisors have assets under management to administration, which now total almost 246 billion. This is a direct indication of advisors continuing to do more business with investment.

Gross sales of assets under management to administration excluding conversion activity were $19 billion eclipsing the third quarter's record setting $18 billion. Redemptions averaged 2% per month during the fourth quarter in line with our expectations. As a result, we had net flows from our existing business of nearly 5 billion.

For the full year, we on-boarded a record $95 billion in conversion assets. $28 million in asset based pricing arrangements and $67 billion in licensing arrangements, reflecting strong demand for a unified offerings from large institutions and leading registered investment advisory firms.

The strong organic growth plus acquisitions resulted in full year revenue growth of 44% and adjusted EBITDA growth of 45%, well ahead of our long term targets of 20% organic topline growth and 25% organic growth in adjusted EBITDA. WMS integration continues to be an organizational priority.

As of today, three clients remain on the legacy WMS main frame platform. We expect two of them to transition during 2015, and the remaining one to migrate to the investment platform in early 2016.

Meanwhile, we are generating positive cash flow by improving our operational efficiency for clients converted to the investment platform and by reducing our reliance on prudential to support the WMS legacy business.

This migration activity is taking longer than we originally expected and we had to give some revenue concessions to a couple of clients to facilitate the transition, and to share in some of the future operating leverage for being on the investment platform.

Still, given the multi currency capabilities that we have acquired, further expansion into the Canadian market and the entrance into the bank trust channel, as well as the significant cash flow we expect once converted, we are very pleased with WMS acquisition and it's contribution to our business, our platform and our financial results.

Placemark brings to Envestnet industry leading Unified Managed Account or UMA and overlay management capabilities. Placemark also expands their presence in the full service broker dealer channel. Until the WMS integration is complete, the Placemark platform is expected to run in tandem with investments and generate modest cash flow.

Both acquisitions are expected to generate returns that exceed our 25% targeted return on invested capital for consolidating acquisitions, once the integrations are complete. We are reevaluating additional opportunities to accelerate our growth, enter new channels and extend our unified wealth management platform and service capabilities.

Beyond the ongoing innovation we deliver through frequent enhancements to the basic features and functionality of our platform, we are looking to make selective strategic acquisitions to execute on our business strategy and we continue to evaluate consolidating opportunities as well.

Our strategic development is driven primarily by the various channels we serve or seek to enter and the continued development of our unique multi-portal platform. And we often emphasized the advisor portal.

That's the workstation which integrates a set of applications that help advisors spend less time on back office and administrative tasks and more time with current and potential clients, resulting not only in better client outcome but also importantly faster growth in their practices. Our platform is broad and I believe unique.

But the advisor portal is only one of our platform's four primary portal. We also invest in our enterprise portal.

This is the dashboard for the home office that enables the program readers at the home office, at banks, financial institutions, broker dealers, and larger RIA's to provide the service and operational support necessary for their advisors to benchmark their advisors, to support their compliance efforts and to drive improved performance across their organization.

This is where the offerings of investment intelligence, advisor benchmarking, and book of business aggregation for the advisor are highly valued. Our manager portal, the third I'm describing enables third party strategists and separate account managers to implement client portfolios for advisors.

Model based trading is becoming the standard with which most of our managers and strategists implement their portfolios.

Using the model management standards that have been adopted and that we have established for the MMI, the Money Management Institute, managers and strategists are each increasingly using our portal to access advisors and their investors to make changes to their model portfolios as we administer those changes.

They also gain valuable insight into the practice patterns and preferences of the advisors who adopt their solutions. This offers real leverage to the managers seeking to access advisors in these independent channels.

And finally an area of increasing investment is the investor portal where we enable advisors to provide aggregated account reporting and digital communications with their investors via an advisor branded portal. We are seeing a significant increase in the number of advisors and investors utilizing this core capability.

As advisors attract the clients and as existing clients become more technologically savvy, today's advisors and their investor clients are demanding multiple ways of obtaining information about their financial plans, their retirement plans, their investment portfolios and in digital communication.

We've been developing our unique multi-portal platform for a number of years and as we provide buyers with more sophisticated capabilities to leverage their interactions with clients we are well-positioned to further leverage the power of the network we have assembled. At the end investor benefits from their unique collaborative efforts.

Now this is why we acquired Upside which we announced earlier today. Upside helps advisors leverage technology to advise managers to serve clients who want high quality customized services delivered primarily over the Internet, the way that an increasingly percentage of investors would like to receive it.

When we combine the front end digital portal that Upside has built with the breadth, scope and scale of the investment structure, the competitive advantage tilts towards our advisors and away from the pure digital strategies in a big way.

While this transaction is seemingly small, it's important because of how we believe it continues to help tilt the advantage towards advisors. We help advisors who work with investment gain scale, grow faster, achieve better outcomes for their clients and reach markets digitally and this acquisition checks all those boxes.

It also sets the stage for continued investment in our multi-portal approach to delivering value to all participants in the investment eco system. The advisors, the firms and institutions they work for, investment management managers and strategists and most importantly to the end investor.

I will conclude with a few remarks in a moment, but first I would like to turn it over to Pete D'Arrigo, our Chief Financial Officer, to discuss our financial performance in greater detail..

Thank you, Jud, good afternoon and thank you for joining us today. In the fourth quarter of 2014, revenue from assets under management or administration grew 29% to $81.5 million compared to $63.4 million in the fourth quarter of 2013.

Licensing and professional services revenue in the fourth quarter was $15.3 million up 39% from $11 million a year ago. In total adjusted revenue increased 30% to $96.8 million in the fourth quarter and $74.4 million last year.

Our cost of revenue increased to $38.6 million for the quarter from $32.4 million last year as a percentage of revenue from assets under management or administration, our cost of revenue was 47.3% compared to 51% in the fourth quarter of 2013.

This decrease was driven primarily by the addition of Placemark in the quarter and that revenue is recognized net of manager fees. Adjusted EBITDA was $16.6 million for the quarter, 50% higher than the 2013 fourth-quarter. Adjusted earnings per share increased to $0.23 up 53% from $0.15 last year.

At the end of the year we had $210 million in cash and our revolving credit facility was undrawn with $100 million available. Looking forward to the first quarter of 2015 on a consolidated basis, we expect our revenue from assets under management or administration to be up 20% to 22%, compared to the first quarter of 2014.

This reflects an effective fee rate of approximately 13.1 to 13.3 basis points on our beginning AUMA asset base of approximately $246 billion.

The fee rate decline compared to recent quarters is due in impart to a shift in our mix of AUMA to lower yielding products and also due to the revenue concessions Jud mentioned related to WMS clients, in connection with retaining and expanding their business on the investment platform over time.

As we've previously discussed converting and stabilizing the client base for consolidating transactions takes times as much as one to three years and this is a complex integration. Licensing and professional services revenue for the first quarter should be up approximately 33% to 36%. We expect adjusted revenues to increase between 22% and 24%.

We expect cost of revenue to be between 48% and 49% of AUMA revenue and our adjusted EBITDA is expected to increase 38% to 42% compared to the first quarter of 2014. This includes the expected impact from upside which will be slightly diluted in the short term.

Cash interest expenses pretax should be approximately $800,000 in the first quarter due to the convertible notes and the credit facility. After tax that's approximately $500,000. Regarding income taxes, we expect our effective tax rate for GAAP in the first quarter to be approximately 40%.

Diluted shares outstanding should be approximately 37.5 million shares based on the current stock price. These expectations translate to adjusted earnings per share of $0.22. Thank you again for listening today and for your support of Envestnet. And I will reintroduce Jud for some closing comments..

Thank you, Pete. Envestnet tends to continue to invest in and expand the channels we serve with our unique multi-portal platform offering and to implement our strategy to both internal development and acquired capabilities.

We believe we are well-positioned to deliver meaningful organic growth and accelerate that growth through disciplined strategic activity. During 2015, we expect to continue our strong growth in revenue and cash flow. We expect revenue growth of 21% to 24% when compared to 2014.

We expect continued operating leverage in our core business as we finalize the integration of WMS and take advantage of resources acquired in the Placemark acquisition. We will continue to invest in our retirement solutions offering and expanded PMC solutions, and in expanding our multi-portal capabilities.

As a result, we expect adjusted EBITDA to grow between 33% and 38% when compared to 2014. I want to thank you again for your time this afternoon and thank you sincerely for your support of Envestnet. And with the conclusion of these prepared remarks, we are happy to take your questions..

[Operator Instructions] And we'll go to our first question to Chris Shutler with William Blair..

Hi, guys good afternoon, can you hear me?.

Yes we can, hi Chris..

Jud, M&A in the States has picked up a lot in recent weeks with [indiscernible] expenses-money and - and I'm especially interested in the e-money deal and the announcement by fidelity they are aligning their clearing and custody businesses and creating this new technology division.

I know it's a big picture, but I just want to get your take on you think you're heading and what kind opportunities you see for Envestnet as a result?.

We think that there is - we see the same activity the increased interest not only by strategic but also private equity participants in the wealth management technology space and its going to be increasingly important to pick the right partners on the custody side and in the business development side.

And I think its very important time for us to maintain our activity, as well as maintain our discipline. And we are seeing an uptick in opportunities and we expect that we will be able to take advantage of the right ones of this..

Okay, great. And then Jud, you spoke about portals a lot in the prepared remarks, in your opinion, what portal or portals do you think need the most development. I’m assuming that the advisor portals and that’s pretty well developed but, what do you view as kind of the -.

So the advisor portal takes the line share of our development resources, it continues to, multiple applications and it's – it's generally where most of investor questions are about what are we doing at the advisor portal. We expect to continue to invest in these areas.

And we've identified areas that we're looking to expand our capability and those haven’t changed. On the enterprise portal data and benchmarking provides better business intelligence for the home offices and the institutions that employee advisors and here there is a continued investment as well.

The manager portal is very interesting because we see increasing demand from managers who want more insight into this channel. So as we continue to invest in the manager portal, we think that there will be some relatively near term opportunities to monetize the extensive data that we have.

In the investor portal driven in part by an uptick in the investor usage, as well as the advisor usage of the investor portal, which is requiring continued investment as well.

We would identify again the three areas that w consistently get requests from advisors to do more for them, they want deeper integration with financial planning and CRM applications at the advisor portal level. From a servicing side, they continue to ask for deeper and better work flow integration for alternative investments.

The whole markets looks for deeper and richer data and I think, I just identified some of the things that advisors and we are looking to do to stay ahead of the developments on the digital investor portal front.

So, continue to invest most heavily in the advisor portal but these other portals are a large part of what makes that the Envestnet platform unique..

Thanks a lot..

We’ll take our next question from Alex Kramm with UBS..

Hi, good evening. Just may be, you can just come back to the comments you made on the WMS integration. First of all on the timing side, seems like one is slipping into 2016, I thinking at some point and may be I misunderstood, but at some point I think, people thought this might be more like a second half or first half of 2015 event to finish there.

So, maybe just flash out what change then more and more importantly talk a little bit more about these revenue concession like in terms of magnitude or how exactly these discussions with these clients have gone and why you had to concede and how this fitting into the overall growth opportunity because I think you're saying that it’s going to drive incremental growth or maybe flush it out little bit more..

Alex let me take a crack at the first, yes, there is one that is going to take longer than what we previously expected and its complex, it includes multi currency capability and it's a large organization.

And so it is taking longer and we expect that we would be able to get it across the finish line on the conversion and the integration side in the first part of 2016. And that's a year or may be even a little more than what we originally expected that it would be.

We've given updates throughout the time and that slipped to a couple to three quarters and now it looks likes its going to be four or five quarters after what we longer than what we originally expected.

Now I won't point out that most of the institutions are already converted and we are generating operating efficiencies and positive cash flow from that business today. I'll turn it over to Pete to answer or address the second part of your question..

Alex again we’re not in a position to discuss specific client outcomes publicly like this but it is a large client as you know. WMS has large clients with multi billions and it’s a couple of basis points. So the annualized impact is probably in the range of $3 million..

Okay. Great. Very helpful. Then secondly maybe also little bit bigger picture here. There's been a little bit more news flow and noise around fiduciary standard when it comes to retirement asset, obviously the present time has been a little bit early this week. Jud, I think you talked about the advisor growth for a while in this will whole trend.

Maybe could just refresh us on, how you think this trend will continue in terms of fiduciary standard and not - what it means for the industry but then also more importantly what it this would be for you?.

I would be happy to - Alex, I think you're refereeing to Tibble versus Edison case earlier this week where the court in that case narrowed its focus on to whether the company was providing ongoing review of the fiduciary product and the court found that the company had a responsibility to do so.

To us it's surprising, it's taking this long for the courts and others to recognize the fiduciary obligation of plans. And so we believe were our timing is very strong, this is just a latest of many developments following the department of labors guidelines that came out in July of last year.

So, we expect that more sophisticated clients, investors are going to demand a fiduciary standard not only from their 401K programs but also from their advisor.

And as we all know there is still a predominance of assets that are in brokerage or commission based or transaction based accounts and these accounts follow a suitability standard that is what's suitable for the Envestnet. The higher standard is what's in the best interest of the Envestnet's and that's the fiduciary standard.

So we empower the fiduciary standard of care, we do this in taxable accounts, we do this for wealth management but we also do this for the retirement industry through 401Ks and 403B type programs. We expect that we are on the right side of investment management with all of this and we expect that these trends are going to continue.

And we think we’re well-positioned to offer cost effective fiduciary solutions for advisors who want to adopt the higher standard..

Thanks for that answer. And then just like one quick one here, not sure much you can say but that continues to be consolidation in the end market, yesterday we've seen Stifel and Sterne Agee, I think from what I remember Sterne Agee is a client on the RIA side, I don't know what you are with Stifel.

So, anything you can stay around how they would impact I think there is 700 advisors something like that so, may be just some color if you can give us?.

So there is going to be continued consolidation in the space on balance. We benefit from that, we don’t always benefit from that, if you look back to follow that for four years now Alex very consistently, there has been times when acquisition held, in the space of works to our benefit.

There been a couple of cases where it hasn’t so and we do have lots of relationships contractual relationships in a unmet at this point, clear which ones were able to disclose and which one were not, I mean we have to be careful about that but I would expect that on balance to consolidation in the space is going to be, is going to benefit Envestnet because we are the market share leading platform provider..

Fair enough. Thanks again. Take care..

We’ll take our next question Patrick O'Shaughnessy with Raymond James..

Hi, good afternoon guys. So to follow up on the question on the M&A that’s taking place in the space, I think that particular black diamond and Ryan are very close competitors to Tamrac, do you guys see an opportunity from the disruption at those competitors at this point..

Well, that’s an interesting question advent and black diamond are encumbrance in the space and the and Ryan is a strong provider of cost effective technologies for RIA’s. There is as we’ve experienced this begin an acquirer.

There is a period of time, when post acquisition the business needs to stabilize and in some cases consolidate before it can grow at the rates that our oldest and most established enterprise relationship to grow at, at that core growth rate.

So I wouldn’t be surprised if there is some disruption but we’re certainly not counting on it and we expect our growth to continue in the ways that we have indicated in the past based on all are doing what we know we can do well, which is sort of advisors..

Yeah, thank you for that and then, I guess on a related M&A notes are some of the growing pains are having with WMS making you perhaps a little bit more [indiscernible] doing more consolidating acquisitions in the future. .

I would not say that are, would not agree with that characterization. The consolidation and the conversion timetable in the bank and trust marketplace is something we had not been experience with before with WMS.

The consolidating transactions we had done previously were either in the RIA’s space, the independent broker dealer space for the insurance broker dealer space and the bank and trust channel is the more highly regulated, it’s a more complicated channel to do business in and we’re very pleased that we are in it, we’re learning a lot and we are crafting great solutions for banks and trusts.

But we, we’re little bit wiser on whether consolidating transaction in that type of channel will be and we’re continuing to look for consolidating transactions that exceed our target, rate of return on invested capital.

I do not expect to announce of consolidating acquisition immanently but we don’t an art, don’t have the luxury of planning all of them well in advance, they tend to arrive the opportunities arrive on the targets rime table not necessarily on our timetable.

So we're continuing, we’re going to continue to evaluate and look for ways that we can accelerate the cash flow and investment return for our investors but I think if you picked up on my comments that in the near term, there were probably be more likely strategic acquisitions they, you picked up I believe on the tone of my prepare comments, yes..

Great, I really appreciate the color. Thank you..

We’ll take our next question from Chris Donat from Sandler O'Neill..

Jud thanks for taking my question. First one from me is on upside I got your comments that it’s small but important. And I was wondering if you can give us a little color on your thought process there that rather, but why you went out and bought something rather than built it.

I just want to understand sort of how you think about those?.

So, when it comes to strategic development for the platform there’s always the question of do you build or do you buy. And we’ve got some 300 engineers that are working very hard on all aspects of our platform.

We got and we’re happy about this, we highly value our clients and they’re demanding they want more and they want it faster and then they want it now. And so the analysis that we go through anytime there’s a strategic acquisition whether it’s small medium or large is. How do we gain the capabilities that we’re looking for fastest and cheapest.

And in this case given the relatively small purchase price and the talent the human talent that we’re bringing on board with the two principles at upside. We were there's quite fair to us that that this was a better ROI for our business to buy this capability and then integrate rather than build it..

Okay. That’s helpful. And then to shift the topic little bit I understand that on the conversion that’s how it’s going to be a lumpy business. Any comments there either around your pipeline and also your capacity to handle conversions, because it’s team the few quarter a go and if it starts off capacity constraint.

But there it seems like you have to build some capacity and how you share about both the pipeline now?.

We’ve added another team or team and a half over the last two quarters and we’re not at probably five to six times the onboard in capacity that we were when we first started talking about our pipeline back in 2011. And we’ve been able to slightly lower the backlog on a couple of our channels.

We still have a pretty strong backlog within the RIA channel. We work very hard to reduce it for the channels that service breakaway wire house brokers, because we have to be very timely and responsive there.

The macro conversions the big the mega conversions that come from the largest institutions be the insurers or banks I still have a very long lead time, because of the inherent complexity of the business and the degree of regulation. So that’s a long way of saying that our pipeline for conversions is as full as it’s ever been.

And we don’t see that disappearing over the horizon that I have got some view in, which let’s say it over the next couple of years. The next 18 months to 2 years, it says full of its ever been. Now beyond that I don’t know and I can’t believe it it’s going to continue to be a strong as it has been recently over the long-term say three to five years.

But I have been saying that for four years so I that I mean say it again I don’t expect that it’s going to continue over the very long-term, because there’s just so many things coming together. The demand on advisors part for a digital solution the demand on enterprises part for a cloud based solution that’s cost effective.

And this increasing demand of the most forward thinking the most progressive advisors wanting a multi-portal platform that serves all their needs.

I think the time is ripe right now for investment and I expect that that’s going to continue and conversions have won very healthy way when saying that that demand at the enterprise level and the large RIA level is robust. And I don’t see that I don’t see that dissipating over the near-term let’s call it 18 to 24 months..

Great. Thanks very much Jud..

We’ll take our next question from David Grossman with Stifel..

Thank you, and good afternoon. I’m going to apologize in advance I’m sorry I got job from the call so she covered this detail free to defer me off line but I just wanted to circle back to the that your last conversions.

And I guess what I’m curious about is could you help maybe help us better understand just the mechanics of this that you – do you have to resign everybody and some on the refer your store that are differing with a technology issues or the other issues without getting into specific be difficult to talk about this one.

And then secondly if you could help us understand where we are in terms of EBITDA contribution from both of your base market quality to what they should contribute when the integration and conversion are completed?.

Okay. These are great questions very logical I don’t know how much we’re going to be able to answer them David to your satisfaction, but let me take a crack at it okay. On these large conversions.

It’s a combination of technical capability you got Reg 9 reporting we’ve got some additional functionality that we have built for the home office to administer portfolios. And we’ve created a multi-currency capability within the investment platform to service these Canadian clients.

So there was a technology and platform development art but that’s not the longest pool in tent so to speak, that for the most part has been completed and that’s why a number of these clients have already come over onto the new platform.

Another element is the customization that’s done for particular clients that may have account opening or account servicing or service requests that are done within the institution in a way that hasn’t been encountered before by an investment plan.

Now you would think that with thousands of tens of thousands of advisors and literarily several thousand organizations that we would have encountered just about every service requirement or way of administering business as there exists.

And that’s just not the case it seems that just when you think you’ve covered every possible permutation there’s another one that comes forward and they say we want you to do this. And we’re going to delay conversion until this happens.

So there’s that element to it and then there’s just the processing the more intensive regulatory environment for banks and trust that’s taking longer.

So it’s a combination of technology features and functionality in the core platform multi-currency would be an example the specific customization that we do end up doing for large clients, because they deserve it. And then the particular regulatory piece on the bank and trust regulatory front and in terms of that satisfying David..

Very helpful. Thanks..

On the contribution we did quantify the Placemark contribution in the near-term during the fourth quarter. On an annualized basis it’s about $2 million. And we don’t see that changing over the near-term considerably. So for the current forecasting period we’ve given some guidance for the year that's a good number.

WMS is harder for us to get a very clean quantification on, because the more we integrate the more the cost that are saved where do we save that comes from. Does that come from WMS or does that comes from investment.

So, I want to think about how we quantify that because I know why that's important to analysts to gauge progress as well as to quantify what the continued upside is from that consolidation dividend.

We haven't quantified that, I don’t believe we’re prepared to quantify that today, but we will work to give you some guidance over the coming conversations we have more broadly. And certainly, we'll want to give something along that line by no later than mid-year here.

All right great that's actually very helpful. So can I just ask you in the context of WMS is it contributing more to EBITDA now than Placemark or - because I think you did say that it is positively conservative even with these three outliers but I mean fully come over to the platform. I’m going try to give..

I understand, I’m going to turn that to Pete - over to Pete..

I'd just reiterate what Jud was saying that we will work in the next quarter to come up with better quantification on where that is. Obviously we're not – originally we thought we didn’t have the full dividend in by the end of 2014 we’re not there.

But I would say we’re ahead of where we thought we would be prior to the impact of the complete conversion and integration. So, it is contributing and we will work to find a way to quantify that in the coming periods..

Okay, fair enough. So can I just transition to the just the day to day nuts and balls business it was in though there very strong quarter in terms of growth sales x conversions. And the business momentum improved significantly starting in the second half of last year but then continued and have continued throughout this year.

So I don’t know Jud if you have any perspective on how much of that is just a market going up and the advisors spending more since they’re making more versus other dynamics fundamental secular trends that I know you talked about any of these trends or any.

But is there anything specifically that you’re seeing that we be a catalyst to be driving that number particularly in the second half of the year you were up reasonably well versus the first half?.

So, again it’s a very good question, we’re focused on the broad trends that commissions to fees and the moment away from captive warehouses towards independence. And we see all of that. We also believe that there is a productivity dividend to advisors that use a fully integrated platform.

And we've talked about that as well there’s a advisors that use a fully integrated platform spent 40% less time on back office problems and that translates to 90% more face time with clients and prospects.

And advisors that are seasoned and trained on using the platform are growing their fee based practices at two to three times the rate that the average advisors is. So these are all things that go to that core trend line. And I think that there’s been an uptick in that over the last two quarter.

The question is why and I believe that the cloud based solution that's available in a variety of tablet or digital kind of formats is something that’s - I don't want to use spiking that’s a wrong word but it's boosting demand in the short run.

I also think that the strong equity markets even though that doesn't necessarily translate to a predictable increase of the asset value since we're about 45% exposed to a domestic equity and those are - because it’s - most of our assets under management to administration are advisor managed meaning that they're actively managed and in the last couple of quarters active management led the passive portfolios.

So that’s a factor that’s going on to. So that more performance factor and yields with assets. So let me bring it all down I think that the strong markets are contributing factor to the increase of business. I think it's nice while it lasts.

We’re expecting perhaps some slight moderation of that activity but we've given you our best estimate of what would be able to deliver on the year, given where the market is today..

Very good, Jud. Thank you..

We'll go next to Peter Heckmann with Avondale..

Good afternoon Jud. Thanks for taking my question.

Just to be clear on Placemark we hear, did I hear correctly that the final conversion or consolidation of that platform will now wait until after the final WMS conversion and if so and perhaps my second question is, is there a need to go functionality there is well to convert off the platform, that Placemark is using, are they using a third-party solution where they paying maintenance fees or something like that?.

The details of Placemark is, Placemark offers overly and unified managed account services. Their service offering is a subset of the broad Envestnet offering. There is not extensive performance - there is rudimentary performance, measurement in performance reporting. There is a not an investment in an investor portal.

So it does a subset of what investment does above, what does it does quite well, there are some things that need to be replicated in the Envestnet code base, things of our how certain securities are tagged within sleeves of the unified managed account and we expect that will happened over the next two to three release cycles of our internal development.

There is also the disruption of the client base, client base is currently very satisfied with the Placemark offering, there isn't the, the legacy mainframe of challenge that there is with WMS and the full benefit of that Placemark acquisition will probably be realized sometime middle of 2016..

Okay, that’s helpful.

And then could you give us a little bit more on investment retirement, some of the opportunities that you see there and then, how do we think about the investments for Envestnet retirement and can you quantify those in terms of what type of drag they might have on margins for the full year?.

So again we are investing were it is, it is not making a positive contribution to cash flow at this point. We are still essentially very early revenue. We've made great progress in completing the platform and in gaining our first adapters on the institutional side.

We think that this is going to be years, several years two to three years before it makes a meaningful contribution to our topside, our topline and to our bottom line but we know we’re in the right spot.

I don’t believe we’re too early but I go back to the early days of Envestnet where it was several years before the cloud based solution was broadly adapted. The adoption in the early stages of ERS of Envestnet Retirement Solutions is coming on lot easier then it was in the early days of Envestnet.

And part of that because we’re leveraging relationships that we have on the wealth management side but we have been able to gain a couple of very nice enterprises, institutions that aren't wealth management clients. So we’re very excited about it.

The investment that we are making in it is reflected in the guidance we have given and we haven't broken out a specific amount of what that is..

Okay, fair enough. I appreciate the feedback..

This concludes today's question-and-answer session. At this time, I’d like to turn the conference back to Mr. Jud Bergman, for any additional remarks..

Thank you. I think we’re running up on an hour, which is about what our year in review and perspective has run in the past, quarter ones are sometimes little bit shorter but we very much appreciate the quality of question and the insights that are represented by the question that you have asked. Thank you for your support, we very appreciate it.

And we look forward to continued communications over the coming months. Thank you very much..

This concludes today's conference. Thank you for your participation..