Robo-Advisors

Stripped down to its essentials, financial advice is a fairly straightforward proposition. Done well, a highly ethical individual stewards the assets and actions of an investor in a personal and professional interchange. But now a vibrant new class of entrepreneurs is staking their fates and their fortunes on the premise that financial advice can be delivered in a better, cheaper, easier, more ethical, more transparent manner and, as a bonus, in a way more devoid of human annoyance on both ends of the transaction. Cue the robo-advisors, arguably a callous misnomer for automated asset management. The prototypical robo-advisory entrepreneur has more brands on his or her resume than NASCAR. The bona fides of these industry upstarts often include Ivy-level colleges and MBA programs at Harvard or Stanford. They are often flush with IPO dollars realized at concerns like LinkedIn, Facebook, eBay, Amazon and Microsoft. Robo-folk believe that technology is not an enabler of advice but rather, if engineered correctly, advice itself in digital form. And, they believe the best solutions originate in Silicon Valley or academia, not Wall Street. Robo-entrepreneurs are white-boarding the whole business model, culture and technology from scratch in the conviction that little can be learned from a legacy advice system still rooted in an investment banking culture acting under the core premise that if stockbrokers get rich some of the good effects will trickle down to clients – with the clients none the wiser. Robo-advisors are a scintillating topic for students of the advice game as they grow by hundreds of millions in assets every month, constantly evolve their business models and receive cash infusions from ever-larger swaths of venture capitals. Throw in the fact that robo-advisors have yet to see a dime in profits -- and won’t in the foreseeable future -- and you have real intrigue. RIABiz has avidly covered the fast-evolving robo-advice phenomenon and will continue to do so. We present the growing body of articles here.

Peter Mallouk owns a $21-billion RIA already growing with organic ferocity. Then Tony Robbins shows up and whoosh.

The 10 RIABiz stories advisors connected with most deeply in 2016 and how hubris and humility ran amok in this didn't-see-it-coming year

How did Aequitas swamp CONCERT? Power outages at LPL, Cetera and Wealthfront? Adolescent robo problems? And was that Tony Robbins hawking his money book ... again?

December 28, 2016 — 5:54 PM UTC by Dina Hampton

Brooke's Note: Choosing which articles were of greatest interest to RIABiz readers in 2016 was easy because a Google robot  measures the final results of your reading output.  We then refresh your human memory about why the story was so irrestistible at the time. Big ...

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David Canter: [Advisors] will be need to be very thoughtful with how they account for their fees, the services provided and value delivered

Fidelity warns on the fees RIAs charge as growth of their practices falter yet lower prices aren't the answer

The Boston custodian calls attention to pedestrian 2015 organic net new growth of 6.7% as sign that clients are baffled about what exactly they are paying for

December 20, 2016 — 7:13 PM UTC by Janice Kirkel

Brooke's Note: No article is ever easy in this business. What people say and what their message is supposed to be and what RIA takeaway is intended can be three different things. We try to be fair to all three to the extent that that is ...

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Despite a prolonged quite period, Alexa von Tobel says that her robo will 'unleash innovation' soon.

Quiet Northwestern Mutual may be ready to make a big noise with rerelease of LearnVest -- with Alexa von Tobel vowing that innovation and integration aren't mutually exclusive goals

After the $250-million deal in 2015, the staid Milwaukee insurer has funneled funds into the jazzy robo, packed its board and taken it backstage for a makeover promised for the New Year

December 14, 2016 — 6:35 PM UTC by Jessica Devenyns

Brooke's Note: The next decade will be a supreme test for Northwestern Mutual, a company that has, in many ways, the most outdated of business models consisting of in-house salespeople selling in-house commission-sold products. But Northwestern Mutual has landed on its feet for 160 years and the ...

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The first Vestigo investment, LifeYield, is located in the famed 'pregnant' building at 175 Federal in Downtown Boston.

Mark Casady quietly became co-founder of venture capital firm and, pre-post-LPL, it's making noise

The departing LPL chief is one of two general partners of Vestigo Ventures, which bought a stake in LifeYield -- an advisor software company

December 8, 2016 — 9:59 PM UTC by Brooke Southall

Brooke's Note: Having just learned that Mark Casady is leaving LPL next month, we have a better sense of when those wheels may have gone into motion. Namely, about 18 months ago. And, yes, that was about when rumors began to circulate that he was ...

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Dirk Quayle: We can tell them: we can build the last mile to the investor.

NextCapital poaches great Aon Hewitt hunter as it tracks big institutional game terrain

Matt Clink, 39, will be the 401(k)-geared digital advisor's first CIO after bagging RBC and with three more institutional beasts in its sights

December 1, 2016 — 5:35 PM UTC by Brooke Southall

Brooke's Note: If I had a nickel for every time I have heard the pious proclamation that a company is bringing institutional quality investing to individual investors, I could buy a couple large bags of candy.  And that is what I am hearing again with ...

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Aaron Klein [with chief of staff Evan Pope]: My Risk Number is 88 and it’s probably a pretty good guess as to why we waited so long before raising capital!

How Aaron Klein plans to make Riskalyze the epicenter of the RIA business with $20 million of fresh private equity money

The CEO startup already has 15,000 users but now he sees the Risk Number as the skeleton key for unlocking robo potential by eliminating two-tier, two-business problem for B2B robos

November 30, 2016 — 10:08 PM UTC by Brooke Southall

Brooke's Note: People in California feel about as fuzzy toward Sacramento when it comes to its ability to produce new technology as Nathanael  did toward Nazareth. Sacramento is government -- leave progress to the Silicon Valley folks. But this scripture keeps getting proven wrong in the RIA ...

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Brett Thorne: It is always up to the individual advisor working with the client to assess the client’s goals and to help the client get the right investments.

RBC Wealth Management adds NextCapital to its robo lineup with a head-scratching explanation about its earlier pick of FutureAdvisor

It appears Rob Foregger's robo-come-lately has leapfrogged its bigger, better-funded automated portfolio offering -- although the 'why' of it is open to interpretation

November 21, 2016 — 6:51 PM UTC by Irwin Stein

Brooke's Note: We are entering a curious phase of the robo-advisor wars. Not only are huge firms like Pershing and RBC adding robos, they are engaging in a kind of robo polygamy. Mark Tibergien reveals big Pershing robo future as his firm partners with Vanare, SigFig and ...

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Doug Fritz: It’s unfortunate that a firm that size can’t stand something up on their own.

What to make of how Wells Fargo and SigFig are cooking up an unprecedented cross-sell of wealth management to retail bank customers

The deal, unlike some others by SigFig, is not to aid W-2 or 1099 advisors of the (Wells Fargo) wirehouse or bank, but to compete for assets on an open battle field

November 17, 2016 — 10:05 PM UTC by Brooke Southall

Brooke's Note: I had a feeling it would take days, not hours, to sort this Wells Fargo announcement out after reading: "Wells Fargo Advisors and SigFig today announced they will collaborate to develop a digital advisory offering for WFA to begin piloting in 2017" ...

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Bo Lu: What's a phone?

The odd and open courtship between the SEC and robo-advisors plays out again -- this time at an SEC-hosted webcast panel in Washington, D.C.

Mary Jo White introduced a forum with representatives from FutureAdvisor, Betterment and Personal Capital who mostly just nodded in assent at each other

November 15, 2016 — 10:22 PM UTC by Janice Kirkel

Brooke's Note: Federal regulators and robo-advisors seem like odd bedfellows. But regulators have the dizzying challenge of inventing ways to apply old rules to new services that seem to evolve by the month. The robos have equal incentive to make sure that they keep evolving. The ...

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Andy Rachleff: I realized that instead of spending less time with the company, I actually want to spend more.

Andy Rachleff takes back CEO spot at Wealthfront at critical juncture

Adam Nash bows out after overseeing growth to $4.5 billion of AUM

October 31, 2016 — 11:34 PM UTC by Brooke Southall

Brooke's Note: Now I know three more things. First, reports of Wealthfront's demise are at least mildly exaggerated. It has $4.5 billion of AUM and by year's end it seems to be on track to hit 100,000 customers. As a Maine native, I ...

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