Betterment’s trouble with Brexit might have given the industry (and regulators) pause, but robo advice, including within 401(k)s, continues to rise.
Baltimore-based mutual fund behemoth Legg Mason announced in early July that it agreed to acquire an 82 percent majority equity interest in Financial Guard, which describes itself as “an online Registered Investment Advisor and innovative technology-enabled wealth management and investment advice platform.”
Financial terms of the transaction were not disclosed.
The firm will operate as part of Legg Mason’s alternative distribution strategies business, which focuses on combining technology with Legg Mason’s investment affiliates’ capabilities to better serve clients.
The investment is part of Legg Mason’s “overall long-term strategy focused on creating choice for investors across investment capability, product and vehicle, and distribution. The transaction expands Financial Guard’s access to financial institutions that serve the needs of investors.”
Financial Guard claims it’s “distinctive in that it offers portfolio analysis and recommendations for a large universe of both passive and active funds. By making the technology available to advisors and their clients, Financial Guard and Legg Mason intend to help financial institutions grow their advisory business and be well-positioned to conform to the new Department of Labor fiduciary standard, set to be implemented in April 2017.”
More broadly, as demand continues to grow for technology-enabled advice, it becomes increasingly important for firms to offer to all of their clients technology solutions that are intuitive and easy to implement across a client’s entire portfolio.
“Technology innovation is redefining consumer expectations and financial firms need a comprehensive, accessible, secure technology solution to serve their clients in this dynamic environment,” Terence Johnson, Global Head of Distribution for Legg Mason, said in a statement.
“In particular, we see an enormous opportunity to serve the important retirement market, offering a cost-effective, comprehensive solution to plan sponsors and to easily serve the smaller segment of the market that will continue to need advice,” Cary Jenkins, Chief Innovation Officer at Financial Guard, added.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
