One criticism of digital advice services, both the direct-to-consumer “robo advisors” and the white-label version built for advisors, is their inability to handle investment strategies beyond ETFs, mutual funds, or equities.
A new partnership between TD Ameritrade, Riskalyze, and Adhesion Wealth Advisor is looking to change that. During TD Ameritrade Insitutional’s 2016 National LINC conference in Orlando on Thursday, the companies launched what they are calling “the industry’s first and only open-architecture digital advice platform” for registered investment advisors.
The product is built on Adhesion’s Unified Managed Account systems, which enables advisors to allocate client assets to different asset managers within a single account. UMAs have grown in popularity among RIAs as a defense against robo advisors, but now advisors can get the digital benefits as well with the help of Riskalyze’s Autopilot program.
Aaron Klein, CEO of Riskalyze, said the new service from Adhesion will help advisors already using multiple managed accounts as well as the advisors that haven’t to avoid having to open accounts with each asset manager.
“If you’re going to do a liquid alt strategy and you’re going to do a tactical strategy and blend that in with the rest of a portfolio – that makes a lot of sense; it’s what advisors have done for a long time. It’s been sort of different to get that in a robo technology,” Klein said. “Life is better for clients because they get one statement for one account.”
Using Adhesion, an advisor who custodies with TD can create his or her unique allocation models using assets from a number of asset managers and ETF strategists, including Vanguard, BlackRock, Morningstar, Horizon, CLS Investments and Fortunatus. The integration with Riskalyze’s AutoPilot program allows the advisor to easily add a digital risk analysis, sync outside assets, open a new account with the firm and e-sign the documents. The accounts will automatically be created on TD’s platform and rebalanced using iRebal.
Barrett Ayers, Adhesion’s chief solutions officer, believes this will give advisors a true digital experience for clients while letting them deliver the sophisticated investments that only a human RIA can.
“RIAs can do more than simply match the experience of a ‘robo’ site,” Ayers said in a statement. “They can blend the human guidance investors need with the digital do-it-yourself experience the new consumer is demanding.”
