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RBC puts BlackRock-developed robo offering on hold

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RBC Wealth Management was among the first big industry names to sign up with BlackRock's FutureAdvisor robo offering last year.

Now, the firm has shelved the development of the platform, with no imminent date set for its launch.

"The FutureAdvisor project is on hold so that we may address other priorities, specifically, [Department of Labor] fiduciary standard-related work," says RBC Wealth Management spokeswoman Nicole Garrison.

At the time of the announcement, then head of RBC Wealth Management, John Taft, called the partnership a recognition that the bank "can serve a broader group of clients today, and also meet the changing needs of investors over the course of their investment lifetime."

BlackRock declined to comment through spokeswoman Sally Lyndon. The firm acquired FutureAdvisor for $152 million in 2015.

One executive with knowledge of RBC's digital efforts applauded the firm's decision to halt development on the platform, which it dubbed RBC Investor Gateway, since it has other digital advice efforts ongoing.

"They have to do some soul-searching about what they want to do across every [platform]," said the executive, who asked for anonymity.

The FutureAdvisor-developed platform was intended to serve investors with as little as $5,000, and was to have been made available to all of RBC wealth's advisers.

RBC's wealth management arm, which has $670 billion in AUM, also signed a deal with Chicago-based enterprise platform developer NextCapital last October to develop an automated portfolio platform, underpinned by State Street ETFs.

In May, RBC's Correspondent and Advisor Services signed up with adviser tech developer CircleBlack, which developed a wealth management platform for its clearing and custody clients called BLACK.

There is also an internal effort to build architecture for wealthy clients gained from its $5.4 billion merger with Los Angeles-based City National, pooling resources between City National and RBC's Toronto offices.

The expansion of hybrid platforms and bank digital advice promises big changes and fierce competition in automated wealth management.
January 4

"It's smart to put things on hold," the executive says. "There's so much each group is doing simultaneously."

Bill Winterberg, founder of adviser tech blog FPPad, says that firms cannot delay their adviser platform plans much longer, given the strides Vanguard and Schwab have made into the digital advice market — Vanguard's digital platform now has $65 billion in AUM, while Schwab's has over $16 billion.

"Vanguard and Schwab are demonstrating that digital plus human, at around 30bps, is the model that is attracting assets and clients," Winterberg says.

The halt of RBC wealth's platform development hasn't had a knock-on effect with other FutureAdvisor efforts.

LPL and U.S. Bank, who signed up with FutureAdvisor after RBC Wealth Management, say their platform development with FutureAdvisor is ongoing, but did not provide launch dates.

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