Invesco PowerShares Buys Robo Advisor

January 12, 2016

Invesco PowerShares is the latest asset management giant to jump onto the robo-advisor bandwagon through the purchase of a digital advice firm.

The fifth-largest ETF issuer in the U.S. today, offering 143 ETFs, with more than $91 billion in combined assets, said it has acquired Jemstep, a digital solutions company geared toward advisors. Terms of the deal were not disclosed.

Fund issuers and financial advisories alike have been racing to catch up to the latest in financial technology advancements—a revolution in money management that’s best characterized by the rise of robo advisors such as Wealthfront and Betterment.

Investors like tech tools, automation and online solutions when it comes to investment management. And the money management industry is being forced to adapt and meet the growing demand from both investors and advisors for better tech-savvy solutions.

Build It Or Buy It?

Some firms are going at this challenge by designing their own robolike solutions in-house. Think of companies like Charles Schwab that have developed retail-focused and advisor-focused robo platforms in recent years, or smaller advisors such as Wela Strategies, which has created its own in-house tools.

Others are opting to enter the space through acquisition. PowerShares has gone this route. Before it, BlackRock last year acquired FutureAdvisor for $150 million.

Jemstep allows advisors in its platform to deliver advice online, offering various active and factor-based investment strategies that are customizable to individual clients, according to a press release. The platform offers mutual funds and ETFs from several providers, and PowerShares told that the number of ETFs and providers is expected to “expand over time.”

Contact Cinthia Murphy at [email protected].

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