As the debate rages among ‘pure’ automated robo advisers and hybrid offerings, one wealth management firm is stealthily white-labelling its digital wealth platform to ‘traditional’ IFAs.
White label robo adviser FinchTech has signed eight independent financial advice firms up to its white label digital wealth platform with a further 14 firms in the pipeline, according to the CEO of FinchTech, Lester Petch.
FinchTech is a non-advised investment platform providing access to a range of mainstream and ethical investment portfolios with varying equity/non-equity weightings. Each portfolio is backed by five years of performance history. It is part of the broader TAM Asset Management group.
IFAs, at no cost, are able to fully white label the FinchTech platform and offer it to their clients as a digital investment management service. The strategy allows IFAs to keep clients that have investment pots below their minimum portfolio size, that they would normally reject, while charging a platform fee of 0.25-0.5 per cent on top of FinTech’s fees for its portfolios.
Many IFA firms reject clients who are not cost efficient, including many younger clients therefore risking losing business when clients’ investable increase later in life.
One of the independent financial advisers that is currently live with a white label version of FinchTech is Richard Butterfield at Bronte Investment Solutions.
He says the firm was attracted to white labelled digital option for clients with portfolios below £100k. "With regulations such as MIFID II it can be uneconomical to have clients with smaller portfolios," he said.
Lester Petch, FinchTech CEO says it allows IFAs to build out their client pipeline and engage with both a younger demographic and those they have had to reject since the Retail Distribution Review’s (RDR) implementation.
“Our white label platform can be rolled out in as little as two weeks and helps IFAs re-engage customers who have remained dormant since RDR, while also fighting back against the hybrid robo – the blend of algorithmic and low cost human financial advice.”