Blackrock has acquired San Francisco-based robo-adviser firm FutureAdvisor for an undisclosed sum.
FutureAdvisor will operate as a business within Blackrock Solutions, and the unit will provide financial institutions with technology-enabled capabilities to improve their clients’ investment experience.
Blackrock said that the combined offering will enable financial institutions to grow their advisory businesses by leveraging technology to meet a growing consumer trend of engaging with technology to gain insights on their investment portfolios.
It said this included when making critical decisions around retirement, a need which it said is particularly acute among the mass affluent, a large segment accounting for 30 per cent of total US investable assets.
Blackrock’s transaction is expected to close in the fourth quarter of 2015 and is subject to customary closing conditions.
Tom Fortin, head of retail technology for Blackrock said: “As demand for digital wealth management grows, we believe that our combined offering will accelerate our partner firms’ abilities to serve the mass affluent in a convenient, scalable way.”
Robert Goldstein, chief operating officer and global head of Blackrock Solutions, added that the acquisition of FutureAdvisor is an “extension” of BRS’ mission to help clients solve their “most complex investment challenges through technology”.
BlackRock’s deal comes after earlier this month, LV took a majority stake in the UK-based automated advice firm Wealth Wizards, increasing its capital to allow the development of its white-label algorithm based platform.
AT Kearney’s May study into the area of artificial intelligence and algorithms predicted around $2,000bn (£1,200bn) will be managed under ‘robo-advisers’ in the US by 2020, with major financial institutions blazing the AI adviser trail on the other side of the pond.
At that time, it found that 20 per cent of consumers already reported being aware of robo-advisery services, with 48 per cent having some level of interest in using them (ranging some somewhat to extremely interested) and 69 per cent being likely to use robo services investable assets (somewhat likely to extremely likely).
ruth.gillbe@ft.com
