RIA 'Shark Tank' backs a digital adviser out of the gate

Despite a crowded market, RIAs bet InvestmentPOD has what it takes to build a better mousetrap

Jul 17, 2018 @ 2:00 pm

By Ryan W. Neal

Consolidation among consumer-facing digital advice firms isn't stemming the flow of funds into robo platforms designed for financial advisers.

ScratchWorks, a Shark Tank-esque program for financial technology founded by five independent registered investment advisers, announced Tuesday that white-label digital adviser InvestmentPOD will receive its first investment.

InvestmentPOD bills itself as "the first multi-strategy, automated investing platform" that combines the benefits of digital advice technology (automated trading and rebalancing) with the sophisticated asset diversification strategies needed to serve high-net-worth clients who require more than a buy-and-hold portfolio.

The POD stands for passive, opportunistic and defensive.

While existing robo-advisers provide passive investing, InvestmentPOD lets advisers customize automated portfolios to take advantage of opportunities in the market with individual stocks, bonds or ETFs, or protect against downside with hedging strategies.

(More: Robo advisers are stepping up their financial planning)

Marty Bicknell, CEO of Mariner Wealth Advisors and one of the five RIA members of ScratchWorks, was an early investor in Betterment for Advisors, but he said he hasn't seen any technology that integrates all of these strategies in one product. This is what ultimately convinced him and the other ScratchWorks advisers to get behind InvestmentPOD.

"I can tailor the technology to my practice instead of having to tailor my practice to the technology," Mr. Bicknell said.

While there's nothing wrong with a white-label robo that offers a preselected menu of investment models, InvestmentPOD makes it easier for him to include his firm's proprietary strategies, he said.

"I do believe that from an industry perspective, there are a lot of advisers who believe their value proposition is how they run money," Mr. Bicknell said. "This gives them the ability to fit in to the digital space."

As with the direct-to-consumer robo-advisers, InvestmentPOD's challenge will be getting advisers onto the platform in a market increasingly crowded with other independent vendors as well as products coming from custodians, broker-dealers and the wirehouses.

Ken Schapiro, the president of Backend Benchmarking, said there is still space in the B2B market as many advisers still haven't adopted robo-advice technology in their practice. That is probably because existing products on the market aren't doing enough yet to convince advisers to buy in, he said.

"You need something that works a little bit better with what the advisers already do," Mr. Schapiro said.

(More: Wirehouses using digital advice technology to boost cross-selling)

While he isn't familiar with InvestmentPOD, he said something more customizable than other robo-advisers could stand out as unique and be attractive to both advisers and custodians looking to improve their tech offering.

ScratchWorks' involvement in InvestmentPOD, both financially and by advising the company on its development, could help the technology grow into a better mousetrap that will attract independent advisers, Mr. Bicknell said.

As firms like Merrill Lynch and Morgan Stanley introduce their own automated investing technology, there's even more urgency to develop a product for the independent market that provides unique capabilities.

"The more technology we can have to serve more households per adviser is a great thing for the end client," Mr. Bicknell said.

InvestmentPOD will use the investment from ScratchWorks to further build out development resources, hire new talent and invest in emerging technologies to become the go-to resource for RIAs to automate and expand their investment management services through the InvestmentPOD technology platform.

The five RIAs that make up ScratchWorks manage more than $60 billion in AUM for high-net-worth clients and include: Mariner Wealth Advisors, RMB Capital, Covenant, Brighton Jones, and The Colony Group.


What do you think?

View comments

Recommended for you

Upcoming Event

Oct 09


Diversity & Inclusion Awards

Attend the industry’s first event celebrating diversity and inclusion as well as recognizing those who are leading the financial services profession in this important endeavor. Join InvestmentNews, as we strive to raise awareness, educate... Learn more

Featured video


What it took to win an Excellence in Diversity & Inclusion Award

Editor Fred Gabriel and special projects editor Liz Skinner explain how InvestmentNews chose the winners of our inaugural Excellence in Diversity & Inclusion Awards.

Latest news & opinion

10 highest paid professions in America today

These are the top-paying jobs in the U.S., according to Glassdoor.

Ameriprise to pay $4.5 million to settle SEC charges that five reps stole more than $1 million from clients

Agency censures firm for not protecting clients from thieving brokers.

SEC slaps Lockwood with $200,000 fine over unseen trading costs to clients

Clients were forced to pay fees in addition to the usual wrap charges, the regulator maintains.

Gotcha! 10 lessons from brokers gone bad

These cases show why regulators nabbed reps and firms, and how to avoid their fate.

Tax-credit investigation may trip up Wells Fargo

Justice Department is investigating bank's dealings in tax credits for low-income housing, sources say.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print