BlackRock Buys FutureAdvisor, Bolstering Robo Capability

Neither FutureAdvisor nor BlackRock disclosed terms of the acquisition.

“As demand for digital wealth management grows, we believe that our combined offering will accelerate our partner firms’ abilities to serve the mass affluent in a convenient, scalable way”.

But those advisors might want to pay attention: A recent report from consulting firm A.T. Kearney projected a 68% annual increase in assets managed by robo-advising services, which would push the figure to $2.2 trillion by 2020. At the same time, younger investors – i.e. those under 35 – are increasingly interested in investment advice online instead of hiring a wealth manager or RIA.

BlackRock said in a statement that FutureAdvisor will operate as a business within its BlackRock Solutions technology platform, “enabling financial institutions to grow their advisory businesseses by leveraging technology to meet a growing consumer trend”, but provided few other details about the acquisition, including costs. The unit will provide financial institutions with high quality, technology-enabled advice capabilities to improve their clients’ investment experience.

In August, the mutual announced it had taken a majority stake within robo-advice firm Wealth Wizards.

Some advisers also launched their own automated advice services to complement their face to face offerings, while the regulator said it is ‘primed’ for robo advice. This week of all weeks they should be saying that to clients, how they create financial plans and go beyond just investments but talk about cash flow, taxes, estate plans and college planning.

The deal, expected to close in the fourth quarter, reflects Wall Street’s established players buying their way into robo-advisory services that are popular with millennials and those with less than the $1 million minimum often required by traditional money managers.

The startup says it decided to merge with BlackRock as the giant’s resources will help allow it to build new features faster “to continue to deliver on our promise of improving the financial lives of average Americans”.

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Saturday, August 29th, 2015 EN

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