US-based InvestCloud is bringing its white label robo-advice platform to Europe.
As wealth management becomes more automated, third party fintech companies are becoming increasingly popular among wealth managers and digital investment platforms like Nutmeg.
When Nutmeg launched its Lifetime ISA in April, it was through a partnership with digital wealth platform InvestCloud. The cloud computing and API-based technology allowed Nutmeg to quickly on-board clients while complying with regulators.
The Los Angeles-based company is helping robo-advisers, wealth managers and IFAs around the world set up automated investment products for clients through its newest product, Emerald.
It is one product that the fintech company offers to its clients as a robo or hybrid experience. The platform handles almost everything from onboarding to rebalancing and holding accounts and trading. The only thing it doesn’t do is give the end user financial advice.
The product helps both B2C and other institutional financial organisations create a hybrid robo-advice model, says Will Bailey, executive vice president of Europe and innovation at InvestCloud.
The company recently opened an office in London and is expanding its ability to “support robo advisor in the both supporting our clients who are B2C but also with some of the larger financial institutions in the world and introducing some of the robo elements into their digital advisory offerings,” Bailey said.
While Bailey would not say exactly how many clients use Emerald, he did say that overall InvestCloud has 670 clients.
British entrepreneur John Wise started the company in 2010. The firm has around 270 apps or services that it offers clients, including its robo-advice service, that customers can use as lego blocks to build up their company.
It’s just one of a number of third party fintech companies helping automate the investment process. While some studies suggest that investors still prefer face to face advice, these companies are betting on the technology becoming even more popular.
Bailey says it’s just a matter of time before IFAs and wealth managers will have to use some type of automation or robo-advice. Robo-advisers have created a unique digital experience and brand loyalty that IFAs can learn from, he says.
“The IFAs that I think are going to be successful are the ones who think about what made them successful in creating strong relationships with their existing clients… and find ways to translate that into the digital realm,” he said.
If they don’t, he says, they will “go the way of the dodo.”