BlackRock, the world’s largest asset manager, just made an unusual purchase: a startup called FutureAdvisor, which offers low-cost, algorithm-based automated portfolio management. The company, whose dashboard is designed for use by investors who might not be able to pay a conventional money manager, is based in San Francisco and has primarily targeted a techie user base to date.
FutureAdvisor CEO Bo Lu said that the company will continue to offer identical products to users after acquisition, as it currently offers free and paid products. “We will continue to have an open platform that uses products from a range of providers,” Lu told Fast Company in an email. (Disclosure: This reporter has used FutureAdvisor’s products in the past.)
According to Reuters, BlackRock plans to use FutureAdvisor to allow banks, brokerages, insurers, and 401(k) firms to serve millennials and what BlackRock calls the “mass affluent” market, which has less than $1 million in investable assets. The acquisition comes just days after Salesforce unveiled an automated wealth management tool aimed at money managers.
Even though the market has entered into a volatile period over the past few days, there’s big money in financial dashboards. Tools such as Mint and LearnVest have increasingly entered the mass market, and accustomed people to the idea of a dashboard that has access to their bank accounts and investments. Raised on smartphones and around-the-clock access, young customers are demanding these type of dashboard tools–and companies like Salesforce and FutureAdvisor are playing catch-up.
As dealing with secure financial data becomes more streamlined and secure–and as investors continue to demand instant access to portfolio advice through their smartphones–we can expect many more competitors in the near future.
Neither FutureAdvisor nor BlackRock disclosed terms of the acquisition.