- Wealth management company Envestnet will tap BlackRock alum Joshua Warren as its CFO effective Nov. 15, the company announced Monday in a filing with the Securities and Exchange Commission.
- Warren will take the company’s top financial seat following the departure of CFO Pete D’Arrigo as of the effective date. D’Arrigo will serve as a senior advisor to Envestnet’s CEO William Crager through Mar. 31, 2024, according to the filing.
- The parent company of financial service brands including Envestnet Yodlee and Envestnet PMC, the Berwyn, Pennsylvania-based firm provides data and technology-driven wealth management solutions. The company reported $59 million in total cash and cash equivalents for its most recent quarter and currently serves 16 out of the top 20 major U.S. banks among its other clients, according to the company.
D’Arrigo, a 15-year veteran of the company, has served as Envestnet’s CFO since 2008. As part of his severance agreement, D’Arrigo will receive $1.65 million payable in equal installments over a 24-month period beginning Jan. 1, 2024, according to the company filing. He will also receive $31,622 in health premium payments as well as a lump sum payment equal to $450,000 which represents his non-equity incentive compensation for 2023, and another lump sum of $89,384, which represents a pro-rated portion of his 2024 bonus.
Warren, a veteran of industry titan BlackRock where he logged an eight-year tenure — most recently serving as its managing director and global head of business strategy, iShares and index investments — will be taking on Envestnet’s CFO seat as the company continues to field lingering economic challenges, including “stubbornly low net industry asset flows, a headwind that's carried over from 2022,” its CEO Crager said during the company’s most recent earnings call.
The environment in the second quarter presented “challenges for clients and prospective clients impacting both segments of our business as well as both asset-based and subscription revenue,” D’Arrigo said during the company’s second quarter earnings call in August.
For its most recent quarter, Envestnet reported revenue fell 2% to $312.4 million during the quarter ended June 30 from $318.9 million in the year-earlier period. Revenue for its second quarter came in at the lower end of the company’s guidance range, D’Arrigo said last month, noting that while the macroeconomic environment performed well for the quarter, “the wealth industry continued to experience dampen flows while advisors and firms remained cautious during this recovery.”
Warren’s previous employer BlackRock is also dealing with market changes. While the company reported strong asset inflows of $80 billion for its most recent quarter, BlackRock is also among those firms making sweeping changes to its ESG investment strategies as investor interest in that topic appears to wane, according to a recent report by Bloomberg.
The U.S. had 656 sustainable funds as of June 30, Bloomberg said, citing Morningstar data, but investors have pulled more money from these funds in the first half of the year than they have sunk into them.
On Sept. 15, BlackRock announced it would be closing a pair of its sustainable emerging-market bond funds — with total assets of about $55 million — joining the ranks of State Steet, the Janus Henderson Group, and Hartford Funds Management who have also pulled back from ESG, Bloomberg reported.
As well as BlackRock, Warren’s previous roles also include serving as a member of the board of directors for iCapital, as well as a financial analyst, investment manager for the Office of Financial Institutions in the U.S. Department of the Treasury, according to his LinkedIn profile.
Warren will receive an annual base salary of $425,000 as CFO of Envestnet, having signed an executive agreement with a three-year term beginning Sept. 22, according to the company filing. He will also be eligible to receive an annual cash bonus of 90% of his base salary.
Envestnet did not respond to requests for comment.