Established fund management companies are leading the next wave of market computerization through investment in robo advisors; robo advisors offer automated investment options with lower fee structures; investment managers are buying and integrating these services to expand their offering and mitigate competitive factors; a partnership between John Hancock Financial and NextCapital is one of the latest examples; other deals have included SigFig with Wells Fargo and UBS, BlackRock with FutureAdvisor and Fidelity with eMoney. Source
Raymond James has announced it will integrate robo advice services with its financial planners; the firm says it will use an internally developed system available to its approximately 7,100 advisors; the platform will be accessible to clients and overseen by their advisor; the firm says it will also comply with the Department of Labor's new fiduciary rules. Source
SoFi was in talks to acquire clearing and custody firm Apex but the talks failed and the lender instead made...
The implementation of GDPR is around the corner as it starts in May across Europe, while most of the regulations will benefit robo advisors the compliance costs could rise significantly; users will be able to ask for all data related to them and all data a rival adviser might have on them, getting this done correctly and efficiently will take time; the customer benefits are high, startups on the other hand might end up getting a lot more costs then anticipated. Source.
Business Insider Intelligence has released a report covering all aspects of the fintech market; says annual financing globally for fintech reached $15 billion in August which is likely to surpass the total of $19 billion financed in 2015; Chinese fintech investments and insurtech have been catalysts for growth in 2016; robo advisors and blockchain are also two of the market's rapidly growing, emerging technologies. Source
[Editor’s note: This is the third article (see first article and second article) in a special series we are publishing from...
Two years ago John Hancock acquired AI startup Guide Financial that helped to set the stage for their newly released robo-advisor Twine; “We weren’t going to be a Vanguard, and on the other hand, there are actors like Robinhood — we landed somewhere in the middle,” said Barbara Goose, John Hancock’s chief marketing officer as reported by Tearsheet; the company is completely separate from John Hancock, in technology stack and management, though they do coordinate with the firm through their innovation officer; allowing Twine to be separate but still connected to the main firm gives them flexibility and allow them to target their millennial customer. Source.
Former Merrill Lynch advisor Carlos Garcia is leading the launch of a new robo advisor, Finhabits, targeting Latin Americans; the platform offers investing and advice through investment accounts and Roth IRAs with low minimums of only $5; targeting the Latin American community the service will be available in both English and Spanish; fees are slightly higher due to the customized target demographic with a $1 per month fee for accounts under $2,500 and a 50 basis point annual fee for accounts over $2,500. Source
In 2016 government regulators became more involved in the fintech industry in a variety of ways; while new regulations were discussed across the globe, governments also got more involved in the industry through sandbox and innovation programs; China's fintech market continued to grow in 2016 with both private market funding and fintech company growth; in 2016 robo advisors and blockchain emerged with new services; the market now offers a broader range of robo advisor services and the leading asset managers have introduced their own platforms; blockchain also reported unprecedented growth with distributed ledger being used for a wider variety of solutions across all industries; all of these industry developments are expected to remain in focus for 2017. Source
The Royal Bank of Scotland is closing 158 branches in the UK in an effort to reduce costs; it has continued to struggle since the financial crisis reporting nine consecutive years of losses; the firm has been increasingly integrating automation to cut costs and says it will make a decision on its robo advisory service for mortgage lending by the third quarter; the robo advisory service offers customers advice and insight that helps them decide on a mortgage loan product, also giving them an option to connect with a human advisor at any time during the process. Source