A Big Fund Firm Buys an FA-Friendly Roboadvisor
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Tuesday, January 12, 2016

A Big Fund Firm Buys an FA-Friendly Roboadvisor

A publicly-traded mutual fund shop is buying an FA-friendly roboadvisor in Silicon Valley.

Martin Flanagan
President, Chief Executive Officer
Invesco [profile] president and CEO Marty Flanagan confirms that today his Atlanta-based asset manager closed on an acquisition of Los Altos-based Jemstep.

The pricing and terms of the deal, and metrics about the size of Jemstep's business, were not disclosed. Back in October 2013 Jemstep closed a $4.5-million funding follow-on to its series A funding, pushing its total capital raised at the time to $15 million. The big new Jemstep investor in that 2013 follow-on round was private wealth advisor Caleo Capital.

Jemstep is led by president Simon Roy and CEO Kevin Cimring and was launched in 2008. Peter Intraligi, who recently took over as Invesco's head of distribution for North America, confirms that the whole Jemstep team is on board at Invesco, "including the founders and the full management team."

Simon Roy
Jemstep, Inc.
President, Board Member
Intraligi describes Jemstep as a kind of practice management, value-add tool for Invesco's FA allies. The idea is to help FAs "be more productive, more efficient."

Intraligi contrasts Jemstep with many other roboadvisors whose platforms build portfolios exclusively out of traditional, market-cap-weighted index ETFs. FAs using Jemstep can include a variety of investment options, including both active funds and strategic beta ones.

"All of those vehicles are available on the Jemstep platform ... This is an open-architecture platform," Intraligi MFWire. "It's exclusively designed for advisors with a high degree of flexibility to be able to customize solutions for their clients."

That matches up well with Invesco's varied lineup of active and strategic beta mutual funds and ETFs, as well as traditional passive ones.

Peter Intraligi
Head of Distribution, North America
"We have no intention of launching a robo-platform" that just puts all investors into portfolios of market-cap-weighted ETFs, Intraligi adds. "We believe that investors can be served better. Jemstep believes that investors can be served better."

Intraligi says that Invesco has been "taking a very close look at the space" for more than a year. And they found Jemstep.

"Their philosophy and strategy were frankly perfectly aligned with our beliefs," Intraligi says. "For us it was really the only solution."

Back in 2010 Jemstep's Cimring pitched the startup's offerings as "Morningstar meets eHarmony," matching each individual investor's style with mutual funds from a lineup of thousands. And Jemstep has also made moves in the 401(k) space. Two years ago Jemstep teamed up with America's Best 401k, a spinoff from another financial advice player in Silicon Valley.

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