CI Financial Corp. is merging robo-adviser WealthBar’s technology with its independent wealth manager Assante Wealth Management (Canada) Ltd. as it looks to draw in more digital-savvy investors.
Assante, which has more than $46-billion in assets under administration, announced Thursday it will be launching Assante Connect, an online investing platform that uses technology built by robo-adviser WealthBar.
Toronto-based CI is fairly new to the digital advice industry, acquiring a 75-per-cent equity interest in WealthBar Financial Services Inc. this year, but the investment giant has been public about its overall plans to try enhancing the company’s digital capabilities.
The firm recently hired a new chief executive officer, Kurt MacAlpine, and a new president, Darie Urbanky, who both have strong technology backgrounds.
“Pairing online investing with wealth management advice is essentially a new segment in Canadian financial services and CI Financial is uniquely positioned to lead this space," Mr. MacAlpine said in a statement.
Robo-advisers, also known as online portfolio managers or digital advisers, offer retail investors a quick route to building an investment portfolio through an online risk-assessment tool that calculates an appropriate asset allocation based on age, financial goals and risk tolerance.
The results provide clients with a recommended investment portfolio typically made up of exchange-traded funds, which will automatically rebalance as markets move.
Once seen as a potential disrupter to financial advisers, many Canadian robo-advisers have partnered with the wealth management industry to combine services that will help build scale at a quicker pace while providing technology platforms to advisers and their clients.
“We saw a bit of a service gap with a segment of clients, whether it be because of their complexity or in a preference to how they want to engage advice," Assante president Sean Etherington said. “And we felt there was perhaps a better way to service them while still offering advice from experienced financial professionals.”
In Canada, robo-advice assets under management amount to more than $5-billion, and while that’s still just a fraction of the larger asset management market in Canada, robo-advisers are offering alternative investment advice to digital-savvy customers.
Over the years, several robo-advisers have launched business-to-business platforms – allowing financial advisers to access their portfolio management tools for a discounted price. As more digital offerings become more widely known among investors, wealth managers are quickly looking to add these services to their platforms, says Josh Book, CEO and founder of ParameterInsights Inc., a financial services research and consulting firm.
“To reach more clients, scale operations, and redefine an advisers’ value to clients, firms must reimagine the ways they deliver wealth management services,” Mr. Book said.
“Our data is showing that while the human touch of an adviser still holds importance, investors are more focused on elements like being able to easily move money in and out, fees, ability to view aggregated holdings in one place and getting clear information. "
The Assante online platform will only use CI First Asset ETFs in its portfolios and be available to Assante’s 830 investment advisers and their clients.
The offering can be attractive for clients who may not need complex financial planning services and are looking to have an online option, says Chris Nicola, president of WealthBar. It can also be useful to advisers who may want to service clients with lower asset levels, such as children of clients or millennial clients that may not meet minimal investment levels.
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Clare O’Hara