Revenues from assets under management or administration increased 21 per cent to $28.3 million at Envestnet for the first quarter on a year-over-year basis, while total revenues (including licensing and professional services fees) climbed 12 per cent to $32.6 million.

However, net income dropped in the first quarter to $700,000, compared to $1.4 million a year earlier, as total operating expenses rose 18 per cent to $31.4 million.

Cost of revenues increased 14 per cent to $11.5 million in Q1, due to higher revenue from assets under management/administration, the firm said. Meanwhile, compensation and benefits increased 5 per cent to $10.7 million, and general and administration expenses shot up 39 per cent to $6.8 million.

Other key performance metrics at the firm included assets under management or administration of $80.4 billion at quarter-end, up 17 per cent year-over-year, as the number of accounts (AuM/A only) rose by 13 per cent to 364,236. Advisors served stood at 14,386. Gross sales of assets under management/administration were $10.2 billion, resulting in net flows of $5.9 billion.

“During the first quarter, a growing number of advisors adopted Envestnet’s wealth management solutions, as we experienced positive net flows and strong conversion activity of new reporting clients,” said Jud Bergman, chief executive of the firm.

Bergman told attendees of the outsourcing firm’s inaugural Advisor Summit in Chicago last week that the firm is investing in “deeper and richer capabilities” rather than broadening its offerings, citing its recent acquisitions of the overlay technology firm Tamarac and research and portfolio construction specialists Prima Capital.