New robo-adviser geared to retirees

True Link joins crowded digital-advice market dominated by big financial names

Nov 21, 2016 @ 7:00 am

By Liz Skinner

The crowded robo-adviser market is gaining another competitor, although this one is aimed at the nation's senior citizens unlike others that are generally targeted at millennials.

True Link, best known for offering a Visa card with protection technologies aimed at preventing elder financial abuse, announced Monday the availability of its digital-adviser platform, True Link Financial Advisors, as well as $3.6 million in new venture capital funding to help back the launch.

The digital-adviser platform for retirees and those within a couple years of retirement will focus on investments like exchange-traded funds, guaranteed income products such as annuities and duration-matched bond ladders, said Kai Stinchcombe, co-founder of True Link. Investors can input their personal data online, but will have to get on the phone or email a True Link adviser before transferring any money, he said.

“We think seniors are the most exciting market in financial services today,” Mr. Stinchcombe said. “We have seen the role that technology can play in helping today's retirees live the independent, fulfilling lives they deserve.”

True Link joins more than 100 firms offering online financial advice. A small player like True Link will face an uphill battle against firms with a longstanding reputation for financial services, a new report suggests.

(More: Self-funding employee health care pays off for some small businesses)

About $67.5 billion in assets are managed today through 16 leading digital advice providers, according to a report from research firm Corporate Insight. That compares to $2.6 billion in April 2014, the report released last Thursday said.

Platforms from incumbent firms such as Charles Schwab and Vanguard are dominating the market in terms of asset attraction, the report found. Schwab Intelligent Portfolios and Vanguard Personal Advisor Services hold about $51.2 billion in assets, while the top three startup firms — Betterment, Personal Capital and Wealthfront — have gathered about $13.4 billion.

The other 11 firms, which include Blackrock's FutureAdvisor and SigFig, share about $2.9 billion, the report said.

Having a pre-existing relationship with a firm is a big determinant in investors' decision to choose an automated-advice platform, but increasingly, performance will grow in competitive importance as the firms gain a track record, the report said.

Mr. Stinchcombe would not say how many financial advisers True Link has, but the firm said they are all independent advisers who don't receive commissions or sell proprietary products.

The robo-adviser will charge a fee of 87 basis points and come with all the human financial advice the clients would like, he said.

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