As the world’s largest fund manager, BlackRock only wants to get bigger.
BlackRock has acquired the San Francisco-based FutureAdvisor, a “robo-advisor” company, reports the Financial Times. In the next few years, investors will be turning more and more to digital devices for their investment needs, BlackRock says.
BlackRock is putting the new company under its separate BlackRock Solutions arm, to sell its products to brokers and financial advisors. FutureAdvisor will remain “open,” allowing it to recommend more than just BlackRock funds.
FutureAdvisor was founded in 2010 by two former Microsoft engineers as part of the wave of companies appealing to millennials who would rather use an app than visit a broker. Writes the FT:
“I have two 20-something boys and I don’t know, in an age of texts and chat, that they are going to sit down with a financial adviser. They might prefer digital advice,” says Frank Porcelli, head of BlackRock’s U.S. wealth advisory unit.
Under the BlackRock deal, FutureAdvisor is valued between $150 million and $200 million.
BlackRock isn’t the only asset manager playing catchup with robo-advisors. Fidelity has been offering a product from Betterment to financial advisors since last year.
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