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The Relationship Between Wealth Management Companies And Robo-Advisors

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Many robo-advisors are thriving with growing customer bases. Not only are they flourishing, they’re partnering with – and in some cases being acquired by – traditional institutions that offer wealth management services. Take UBS, for example. The company’s wealth management division recently formed a strategic alliance with SigFig, a robo-advisor that will help develop solutions for the bank’s wealth management advisors that ultimately enhance their clients’ digital experience. Two other notable examples include Ally Financial’s acquisition of TradeKing and Blackrock’s purchase of FutureAdvisor.

The automation that robo-advisors provide drives down costs and enables better control and compliance. It gives firms scale by allowing them to better serve existing customers and address new segments of clients who were traditionally unserved by wealth management institutions due to a lack of assets. Remember, robo-advisors eliminate the need to handhold, therefore allowing financial advisors to support those who prefer more attention. The robo-advising model simply gives banks the opportunity to scale while meeting customer expectations for a better digital experience.

Some companies, like HSBC, have historically taken a slightly different approach. Similar to the way they built a traditional IT business that keeps the lights running and software applications up-to-date, they invested heavily in technology and innovation rather than acquiring FinTech companies. Other financial institutions, such as Vanguard, Bank of America, and E*TRADE, continue to pour money into developing their own robo-advising solutions. Today, they’re collaborating with all the big names in IT to improve what they do for customers from beginning to end.

To learn more about robo-advisors and the impact they’re having in financial services, fill out the form below or click here.

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