BlackRock (BLK), the world’s largest asset management company, is buying FutureAdvisor, the fifth largest robo-advisory firm, joining a growing list of giant financial companies offering automated advisory services.
BlackRock said in a statement that FutureAdvisor will operate as a business within its BlackRock Solutions technology platform, “enabling financial institutions to grow their advisory businesseses by leveraging technology to meet a growing consumer trend,” but provided few other details about the acquisition, including costs. The deal is expected to close in the fourth quarter.
“The acquisition of FutureAdvisor is an extension of BRS’ mission to help clients solve their most complex investment challenges through technology,” said Robert Goldstein, chief operating officer and global head of BlackRock Solutions, in the statement. Tom Fortin, head of retail technology at BlackRock, said the acquisition will “accelerate partner firms’ ability to serve the mass affluent in a convenient, scalable way.”
At the same time, FutureAdvisor noted on its website that it would continue to serve existing clients with no changes in management fees and maintain its San Francisco office.
Within the robo-advisor space, “all eyes are now on WealthFront and Betterment” as possible future acquisition targets, said Bill Winterberg, a financial planner and founder of FPPad, a website that focuses on news about financial planning technology. He expects Wealthfront will be acquired because it “wanted to be the leader in online investment services and right now has lost its lead to Betterment.”