BlackRock, which acquired robo advisor platform FutureAdvisor in 2015, is shutting down its direct-to-consumer enterprise and transitioning shoppers to Ritholtz Wealth Administration, a New York-based registered funding advisor with $2.7 billion in belongings, later this 12 months.
“Ritholtz expects that FutureAdvisor shoppers will seamlessly transition to Ritholtz, the place they’ll obtain entry to devoted goals-based monetary planning and cutting-edge know-how,” Ritholtz stated in an announcement. “Ritholtz advisors and help employees are trying ahead to serving to them obtain success in all facets of their monetary lives.”
“We’re happy with having served FutureAdvisor shoppers during the last eight years and are assured that Ritholtz, a nationwide, multi-billion-dollar wealth administration agency, has the power to satisfy the calls for of shoppers in search of digital options for his or her investing wants,” stated a BlackRock spokesperson, in an announcement. “BlackRock will proceed to serve wealth administration shoppers with our Aladdin Wealth know-how choices.”
FutureAdvisor, which had practically $1.8 billion in belongings based on its April 2022 Kind ADV, pivoted towards a business-to-business robo recommendation mannequin years in the past. When BlackRock introduced the acquisition, the agency stated 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 tough enterprise mannequin,” stated 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 tough to make worthwhile, even when many of the servicing, recommendation and buying and selling are automated.”
“I believe FutureAdvisor has suffered from the identical drawback that many robo advisors have,” Goldstone added. “I consider prices to accumulate clients have been persistently excessive throughout the trade, and with razor-thin revenue margins, it has been tough for robos to draw sufficient shoppers and belongings to attain enticing earnings. The direct-to-retail product at FutureAdvisor has lengthy languished after the acquisition by Blackrock, and there have been few, if any, product enhancements prior to now few years.”
FutureAdvisor first launched in its direct-to-consumer type in March 2012.