FutureAdvisor is an automated investment service that uses software to shape a custom portfolio based on a client's risk profile. It also tracks portfolio performance and suggests new investment funds that could save thousands of dollars in fees over the lifetime of the investment.
BlackRock aims to use the robo-advisory as a supportive technology for banks and brokerages, who can then offer their clients the option of automated investment advice.
FutureAdvisor will be brought inside BlackRock’s investment and risk management platform and “will provide financial institutions with high quality, technology-enabled advice capabilities to improve their clients’ investment experience”, the asset manager said.
Brokerages such as Charles Schwab had success with robo-advisor service for retail clients. Schwab also announced the launch of an automated service for advisors.
Robo advisories are catching on in the US. FutureAdvisor's AUM is $450m, up from $13m (about 3000%) since September 2013, the firm said.
"I actually believe those kinds of tools are like an ATM machine. We are all going to have to have it"
Robo-advisers will play a key role in wealth management, said CEO Larry Fink, speaking at an industry event earlier this year.
"Everyone talks about how robo-advisers can't connect with clients," Fink said. "I actually believe those kinds of tools are like an ATM machine. We are all going to have to have it."
BlackRock, the world’s largest asset manager, reported $4.7trn in assets under management at the end of June.