SEI Investments plots next moves for financial advisors, future CEO

SEI Investments claimed a turning point in its strategy to sell more financial technology services to independent wealth advisors, a coveted market.

The milestone — more than $100 billion — refers to the amount of investor assets managed by advisors at independent brokerages and advisory firms that pay SEI to handle their practices and clients’ money.

Publicly-traded company SEI, a financial technology firm in the swing of a new strategy to grow its business, provides custody for client funds and assets, as well as digital services like fund accounting and regulatory compliance. Its services are a ready-bake version of wealth management. The company’s portal for wealth managers, SEI Wealth Platform, lies at the core of its technology-intensive business of outsourced money management.

Erich Holland, a senior vice president and the head of distribution and engagement for independent advisor solutions at Oak, Pennsylvania-based SEI, said Thursday that crossing over the $100 billion threshold “will springboard us forward. We serve 8,000 independent advisors today. We believe we’ve barely scratched the surface.”

SEI oversaw around $1.3 trillion in assets as an advisor, manager or administrator as of last September. The advisor unit is its third-largest in terms of revenue.

Advisor in a box
SEI’s business consists of add-water-and-mix services that give advisors, brokers, private bankers, retirement plans, family offices, endowments and nonprofits ready-made investments for their clients and technology for back-office tasks related to fund administration and front-office functions, like communicating with clients.

Advisors like to outsource the nuts and bolts of investment management through what is known in industry jargon as a turnkey asset management program. Doing so provides a plug-and-play “practice in a box” that frees up time to focus on interacting with clients, as opposed to managing investments. SEI’s competitors include Chicago-based Envestnet and AssetMark of Concord, California.

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SEI also sells mutual funds and exchange-traded funds, with more than $26 billion in fund assets as of the end of last year.

‘We started the look’
“For the fourth quarter and all of 2021, the headline is that the Advisor unit is solidly entrenched for the ongoing implementation of our new strategy,” Wayne Withrow, an executive vice president and the head of SEI’s independent advisor solutions group, said during a conference call Thursday on SEI’s fourth quarter earnings in 2021. He described the new strategy as focused on growing the SEI Wealth Platform portal for wealth managers and advisors; combining that technology with the company's asset management services; and opening the portal to select companies to offer bespoke investments.

The sudden departure last month of CEO Alfred West’s presumed heir, Steve Meyer, an executive vice president and the head of global wealth management Services, jolted some investors. An SEI spokesperson said that "We do not have any plans to backfill the role at this time.”

Asked if a search for a future CEO had begun, West said, “We started the look.”

The company is transitioning its old wealth management platform to SEI Wealth Platform, a complicated technological upgrade that has resulted in backlogs in switching over some major clients, including HSBC and Wells Fargo.

Key upshots for advisors and asset managers:

Editor's note: This story has been updated to reflect a statement from SEI regarding a replacement for Meyer. SEI said it has no plans at this time to "backfill" the role.