The UK’s biggest robo-advisor has seen assets under management grow to over $798mn and customers exceed 25,000 at the end of 2016; however the company also reported a 5 percent increase in losses and a 10 percent increase in operating expenses; building up scale to eventually make money looks to be the biggest challenge for the growing fintech company. Source.
HSBC intends to launch a new product in 2018 to address problems they see in the automated investment market; the new product is dubbed robo-advising 2.0 by Dean Butler, HSBC’s head of retail wealth; it will provide holistic financial advice and will eventually include recommendations for other products such as pensions and insurance. Source
PingAn Bank on Wednesday launches its robo-advisor services, which utilize black-litterman model and quantitative asset allocation methodology to customize users’ investment portfolio based on their risk preferences. Source (Chinese)
Building off of the $70mn funding round from the summer Betterment is now reportedly worth $1bn; the $1bn mark is significant as it denotes that a company is considered a unicorn; the valuation makes Betterment the first robo advisor to reach unicorn status; the company currently has over $11bn in assets under management. Source.
Schwab Intelligent Portfolios now boasts $24 billion assets under management and has hired Cynthia Loh, the ex-general manager of Betterment for Business; article reports on Schwab’s robo-advice platform growth, the cannibalization the firm saw with the offering, and what the new hire might mean for Schwab’s future plans. Source
Vanguard already has a more hybrid offering which was paired with human advisors but is now launching a digital only...
As stock market volatility increased the trading app Robinhood saw deposits jump 20 percent; "We saw a large spike in transaction volume and trading activity on the platform today," a spokesperson told Business Insider. "Retail investors deposited 20% more funds into their Robinhood accounts today than they did on Friday.”; this is a trend the company has seen before, in late 2016 the Dow dropped 8 percent because of issues in Asia and the app saw their biggest net deposits ever. Source.
Aviva purchased a majority stake in robo-advisor Wealthify only 18 months after their head of retirement solutions criticized automated advice; Wealthify will sit alongside other Aviva products and services through the insurer’s digital hub, MyAviva; the insurer sees this as another important step in their digital strategy. Source
Citigroup’s new robo-advisor will be free for customers who have at least $50,000 in deposits or investments; this is the...
Wells Fargo, Morgan Stanley, JPMorgan Chase and others have launched or will launch their own robo products to compete with slicker startups; after seeing the success of startups in the space the banks realized they needed to improve their offerings to keep customers and attract newer, younger ones; the trend to move away from white labeling technology to building their own is a recent one as some traditional players like UBS, State Street and John Hancock are still using services from SigFig, Motif or NextCapital. Source.