Robo-advice  

BlackRock-backed robo-adviser reveals big plans

BlackRock-backed robo-adviser reveals big plans

Scalable Capital, which last year saw the world's biggest asset manager BlackRock take a "large minority" stake in the company, has spoken out about its plans to target businesses while keeping an eye on the end investor.

Ella Rabener, the co-founder and chief marketing officer of Scalable Capital, said the company is already working with insurance giant ING in Germany to provide its services, but is in discussions with other companies.

She said that despite this, Scalable Capital is still going to provide its services direct to the consumer.

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Ms Rabener said: "In the end all of those conversations are for the end consumer.

"As a business you obviously start with the biggest fish first but what is interesting is that particularly in the UK, much less than Germany and Austria, all the big institutions are thinking how they can build something that can also be used by an adviser.

"Once we start building something with a bigger B2B partner we can build something that also incorporates with an adviser.

"But I don't think we would tailor something from scratch [for smaller advisers] yet."

In December Michael Gruener, managing director of Emea retail at BlackRock, said the company would use its stake in robo-advice firms to provide technology to existing advisers, allowing them to offer robo-advice.

Earlier this year BlackRock took a large minority stake in robo-adviser Scalable Capital which launched in the UK in 2016 and describes itself as "Europe's fastest growing digital wealth manager".

Before this, in 2015, BlackRock bought San Francisco-based robo-advice firm FutureAdvisor, which now operates as a business within BlackRock Solutions.

Ms Rabener said Scalable Capital has recently launched an advice service for its wealthy clients.

In a marked shift away from robo advice rivals such as Nutmeg, which is seen as the go-to online investment adviser for those with smaller amounts to invest, Ms Rabener said Scalable Capital will go after higher-net worth clients, those traditionally using face-to-face advisers.

She said: "At Scalable Capital we are quite focused on the mass-affluent and the slightly more wealthy consumer. We felt that there was a need from a particular client group to get financial advice and we thought it would help to get them.

"There is this belief that literally everybody should have access to financial advice. There is a huge belief in the UK that advice is the gold standard for how you should be investing.

"I think it is very difficult to offer financial advice in the sense of face-to-face personal advice to everyone. If someone can only invest £1,000 I cannot see a way of doing this unless the state were to support it. I cannot see a way to offer that in a way there it works as a business model."

damian.fantato@ft.com