Meta Roboadvice Wins Over Another Robust Giant
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Friday, June 01, 2018

Meta Roboadvice Wins Over Another Robust Giant

Roboadvice fever, especially for FA-friendly roboadvice, has spread to yet another publicly traded financial services giant in the asset management business.

On Wednesday Tim Dunbar, executive vice president and chief investment officer at Principal Financial Group [profile], confirmed that the Des Moines, Iowa-based insurer (also a mutual fund shop and a giant retirement plan provider) will buy Lambertville, New Jersey-based RobustWealth. RobustWealth is a roboadvisor that Principal's release describes as a provider of "a suite of white label solutions for investment advisors including a digital advice platform, goal-based investment tools and efficient client onboarding processes."

Fund Action and InvestmentNews covered the deal.

It's not clear when the deal will close, though RobustWealth founder and CEO Mike Kerins will stay on to lead the roboadvisor within Principal. And Principal's statement confirms that RobustWealth "will retain its open architecture philosophy and operate independently under a management committee within Principal" and "will continue to sell their platform to firms outside Principal as part of their growth strategy." In other words, Dunbar doesn't just want to buy up RobustWealth to use the technology for Principal's current clients and investment products.

"There is an unprecedented need for financial advice. And, in today's fast-paced, always on, digital world, people have a strong desire for personalization, convenience and 24/7 access to their money," Dunbar states. "The role of the financial advisor — a real person across the table — remains critical. But, we must combine the best of people with the best of technology to meet clients when, where and how they want to be met."

"Adding RobustWealth's digital capabilities to Principal's deep industry knowledge, asset management experience and technology creates a powerful force to help clients in their quest to save more, invest more and protect more for their financial futures," Dunbar adds.

While the specifics of the Principal deal and of RobustWealth's capabilities may differ, the whole situation should sound very familiar to fundsters. Schwab and Vanguard simply built their own in-house roboadvisor (or quasi-roboadvisor) solutions. BlackRock bought another FA-focused roboadvisor in 2015. Invesco bought one in 2016, the same year that WisdomTree bought a big minority stake in another. And earlier this year the ultimate parent of Putnam invested $65 million in a Canadian roboadvisor, a roboadvisor that is now amping up its FA-focused platform.

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