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August 28, 2015 at 10:24 AM
Earlier this week, Tina Powell of the RIA Beacon Wealth Management moved to go after novice female investors with SheCapital, a robo-advisor service launched as part of a separate RIA of the same name.
The client focus of the new robo service is large: For instance, there are about 127 million women of working age in the U.S., and 57% — or 72.4 million — are employed.
But even with such a wide target audience, does it make sense for RIAs to roll out a robo-advisor service? Powell, naturally, is clear on the benefits.
“I launched today and … see the leads coming in. I can tell you they are millennials … and the average age is 28,” said Powell in an interview with ThinkAdvisor.
“Beacon clients know that education and women’s empowerment are part of our ethos and have been so for years,” she explained. “What we are doing is bridging the concept and bringing it to the market.”
In general, Beacon – a Hackensack, New Jersey-based RIA firm which focuses on medical professionals with a high net worth – could potentially tap into the SheCapital client base.
If SheCapital has female clients with specific tax and financial planning needs as they grow their wealth, Powell can recommend they work with Beacon – an arrangement that is outlined in SheCapital’s filings with the Securities and Exchange Commission, she explains.
However, the real reasons Powell moved to roll out the robo-advisor are “accessibility first and efficiency second,” she says. “I have been frustrated. The door is shut for women and [other] people who … don’t meet the account minimum.”
Industry Blueprint?
“We see RIAs experimenting with the launch of technology offerings like robo-advisors,” said Alois Pirker, research director of wealth management with Aite Group. “It’s not quite a blueprint yet. It all depends on your intentions and target clients.”
Is the robo-offering a component of existing practice? Or is it a new business – a la SheCapital?
“You want to avoid cannibalization of the core business,” Pirker explained.
“Firms that focus on the mass affluent and are concerned the startup robos will eat their lunch may want to take a defensive strategy and then can cater to their clients’ needs,” he added.
While the robo-advisor push is still relatively new, Pirker says the Aite Group doesn’t expect to see every RIA migrating to a robo platform, “but some will.”
