At this year's In|Vest 2015 Wealth Management conference, our very own Gareth Jones sat on a panel moderated by Rob Foregger (founder of our portfolio company NextCapital). The conference allowed startups and Wall Street to size each other up and debate the robo-advisor opportunity.
The largest wirehouses, Merrill Lynch and Citi Private Bank, as well as those with UHNW brands are watching startups and working on in-house solutions. Two well-known New York Fintech venture capitalists, Matt Harris (Bain Capital Ventures) and Gareth Jones (Fintech Collective) discuss this trend on another In|Vest panel. Harris advises financial institutions to explore partnerships with robo-advisor companies instead of trying to launch them internally, because it is less costly and more likely to be successful. Both Harris and Jones see the M&A in the space as “bolt-ons” i.e. “evolution but not revolution” for traditional firms. Adding the technology overlay of a robo-advisor to an existing service model will allow large firms to extend their services. Charles Schwab & Co. is one large firm that has chosen not to do things the Bain way, building and launching its own robo.