Future of Investing

There’s now a robo-adviser to help customers find robo-advisers

  • A U.K.-based startup is launching a chatbot-based digital platform to help customers find robo-advisers
  • Though product aggregators have typically been an effective prospecting tool for startups, larger wealth management firms may see them as opportunities to build brand visibility among a new set of investors
There’s now a robo-adviser to help customers find robo-advisers

A U.K.-based startup is rolling out a robo to help customers find the right digital wealth adviser.

In the investments world, aggregator sites offer customers line-by-line comparisons of product offerings. But few have taken the robo-advice model and used it to help clients find investment products. London-based startup Pia (personal investment assistant) is testing a platform that will advise clients on the investment products best suited to their financial situations, personality traits and life circumstances. It’s expected to launch this fall.

pia-mockup

We spent time speaking to people who said we need to launch a product that’s far more accessible, interesting and engaging for somebody that doesn’t have a lot of investing experience and don’t know where to start,” said co-founder James Mackonochie. “The financial business has done a good job of making finance very intimidating and scary, and we wanted to change that.”

While comparison sites like SuperMoney or NerdWallet offer investment product comparisons, Mackonochie said Pia will use an AI-powered chatbot to offer a personalized experience. The chatbot will engage in a conversation with a customer to gain information about their personal and financial information. The company will generate revenue from referral fees  — a detail which it says will be transparently displayed on its website and app. The company is attracting talent from alumni of the old guard of the wealth management world, including Todd Ruppert, former CEO of T. Rowe Price Global Investment Services and Nigel Webber, former global chief investment officer at HSBC Private Banking. Both former executives sit on Pia’s board.

While the product may be a potential prospecting tool for lower-cost robo-advisory startups, it might be a tougher sell for large companies that cater to wealthier customers. A half dozen U.S.-based incumbent wealth management firms contacted by Tearsheet did not provide comments by deadline, but large firms may not want to be part of a platform that caters to customers of more modest means.

“There are two things going on here — would customers use this? The customers who are shopping around may not be profitable enough customers for a typical investment firm,” said Alyson Clarke, principal analyst at Forrester Research.

Clarke explained that digital advice investment recommendation engines that use a robo model haven’t broken ground yet because the revenue opportunity is smaller. Digital investment products typically are a lower-margin business than loans, and, as a result, comparison platforms that focus on lending are more popular. Consumers also don’t look at investments as a need, like mortgages or credit cards, so they may be less inclined to shop around.

Pia said the aim is to help customers make informed choices. The amount Pia gets in referral fees from investment companies doesn’t affect their ranking on product recommendation lists for customers, Mackonochie added.

Others argue that being present on a platform like Pia gives larger firms the opportunity to build their brand visibility among a new set of investors who may move into higher-income demographics with time. Larger firms have scale and reputation, and that could persuade some customers to consider them even if their prices are higher.

“It gives them a lot more information on which customers they should be focusing on and who they’re attracting,” said Aite senior analyst Meghna Mukherjee. “If they have a comparable solution [to robo-advisers] it would benefit them because they already have customer recognition and trust — things startups struggle with.”

Future of Investing, Podcasts

Investing in proptech with Camber Creek’s Jeffrey Berman

  • A few years ago, investing in real estate tech wasn't even a thing.
  • Now, big money is looking for winners in the world's biggest market.
Zack Miller | January 08, 2019
Future of Investing, Podcasts

How technology is changing the wealth management adviser/client relationship with eMoney’s Ed O’Brien

  • Much of the investment process has been automated.
  • Wealth advisers are doubling down on providing planning advice.
Zack Miller | December 18, 2018
Future of Investing

Why banking startups are rolling out crypto products

  • Banking startups are using crypto products to reach millennials and Generation Z
  • Despite a flurry of interest, many are still taking a cautious approach as regulatory frameworks evolve
Suman Bhattacharyya | May 24, 2018
Future of Investing

How SoFi is personalizing its mobile experience

  • SoFi is evolving its mobile app into a one-stop shop for events, career services and personal finance advice
  • Bringing "social" elements into the app is a way to drive up interactions, an approach that incumbent institutions have been reluctant to embrace
Suman Bhattacharyya | May 23, 2018
Future of Investing

Why Nationwide is ditching retail banking

  • Nationwide shut down its retail banking operation to focus on its historical core business areas retirement mutual funds, annuities and other "emerging businesses for growth"
  • The fee-only financial adviser community is a growing area of outreach for Nationwide
Suman Bhattacharyya | May 09, 2018
More Articles