Wednesday, March 22, 2023

BlackRock Sells FutureAdvisor’s Direct-to-Shopper Biz to Ritholtz

BlackRock, which acquired robo advisor platform FutureAdvisor in 2015, is shutting down its direct-to-consumer enterprise and transitioning purchasers to Ritholtz Wealth Administration, a New York-based registered funding advisor with $2.7 billion in property, later this 12 months. 

“Ritholtz expects that FutureAdvisor purchasers will seamlessly transition to Ritholtz, the place they’ll obtain entry to devoted goals-based monetary planning and cutting-edge know-how,” Ritholtz mentioned in an announcement. “Ritholtz advisors and assist employees are wanting ahead to serving to them obtain success in all features of their monetary lives.”

“We’re pleased with having served FutureAdvisor purchasers over the past eight years and are assured that Ritholtz, a nationwide, multi-billion-dollar wealth administration agency, has the power to fulfill the calls for of purchasers in search of digital options for his or her investing wants,” mentioned a BlackRock spokesperson, in an announcement. “BlackRock will proceed to serve wealth administration purchasers with our Aladdin Wealth know-how choices.”

FutureAdvisor, which had almost $1.8 billion in property in accordance with its April 2022 Type ADV, pivoted towards a business-to-business robo recommendation mannequin years in the past. When BlackRock introduced the acquisition, the agency mentioned it didn’t plan to focus on particular person buyers with the robo advisor. U.S. Financial institution partnered with FutureAdvisor in 2016 to launch its automated funding providing.

“FutureAdvisor abandoning direct-to-retail is one other signal that stand-alone robo recommendation merchandise have proved to be a troublesome enterprise mannequin,” mentioned David Goldstone, supervisor of funding analysis at Condor Capital Wealth Administration, publishers of Robo Report and Robo Rating. “Servicing small accounts with rock-bottom charges is troublesome to make worthwhile, even when a lot of the servicing, recommendation and buying and selling are automated.”

“I feel FutureAdvisor has suffered from the identical drawback that many robo advisors have,” Goldstone added. “I imagine prices to amass clients have been persistently excessive throughout the business, and with razor-thin revenue margins, it has been troublesome for robos to draw sufficient purchasers and property to attain enticing income. The direct-to-retail product at FutureAdvisor has lengthy languished after the acquisition by Blackrock, and there have been few, if any, product enhancements previously few years.”

FutureAdvisor first launched in its direct-to-consumer type in March 2012. 

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