Exclusive: Robo-adviser Marstone has partnered with IBM Watson to deliver cognitive computing-powered advice

The service will help advisers create and manage investments for clients

Mar 21, 2016 @ 1:23 pm

By Alessandra Malito

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Marstone, an adviser-facing robo-adviser, is partnering with IBM Watson to offer digital advice supported by cognitive computing.

The New York-based robo, which currently offers a business-to-business automated investment platform through Pershing, is the only robo on the market to be a part of IBM's ecosystem, which has a financial services-focused division called IBM Watson for Wealth Management. Marstone and IBM will work first with advisers who custody with Pershing and others later, said Margaret Hartigan, chief executive of Marstone.

Marstone's platform will offer digital advice supported by cognitive computing, which is self-learning technology that uses data, patterns and natural language. With Marstone Powered by Watson, advisers will help clients throughout the entire process of planning and managing investments by managing data, analyzing behavior, identifying trends and being predictive.

"The capabilities are tremendous, because if implemented properly, it should help advisers better serve clients," Ms. Hartigan said.

Marstone will incorporate other IBM services, including business consulting and analytics. The robo is also working on a consumer-facing version to be launched, which would use cognitive computing, but is focused on the business-to-business platform for now, Ms. Hartigan said. The technology should be implemented this year.

Pershing is the first custodian to offer Marstone, which it announced during its annual conference last summer.

IBM Watson first joined the industry in 2014, three years after the supercomputer became well-known for winning a game of Jeopardy against two past winners.

Cognitive computing is still fairly new to the industry, but it will become prevalent, and can help advisers attract and retain more clients, Ms. Hartigan said. She had originally created Marstone, after being a financial adviser, to assist advisers, and cited the great wealth transfer expected within the next few decades.

"The wealth transfer is so huge, it can't be done by humans alone," Ms. Hartigan said. "It will help institutions better serve and engage with clients."

Though traditional advisers and robo-advisers are not always comparable, an adviser with an automated process can only be more helpful to clients, said Matt Fronczke, engagement manager and financial adviser technology analyst at kasina.

"For those clients that continue to prefer to have a financial adviser within their lives, these sorts of technological tools will help improve relationships and cement the value proposition advisers have," Mr. Fronczke said. "Whether you're a robo-adviser or human, you will be judged by how well you are delivering on client objectives and meeting their expectations."

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