Invest Forward launches white-label robo for advisers

Startup uses Folio Institutional as custodian and supports investments from Dimensional Fund Advisors

Dec 14, 2017 @ 4:55 pm

By Ryan W. Neal

The launch of digital advice products from traditional financial institutions isn't stemming the tide of technology startups trying to enter the market.

The latest player is Invest Forward, a white-label robo for advisers. The tool uses Folio Institutional as its custodian; provides advisers the ability to digitally offer clients life insurance, loans and estate plans; and labels itself as the first digital advice platform to provide access to funds from Dimensional Fund Advisors.

In addition to the usual services offered by business-to-business robos — online account management tools and back-office technology — Invest Forward says it will support advisers' website and digital marketing strategy.

Folio Institutional gives Invest Forward online brokerage, custody, clearing and technology services. Invest Forward CEO and founder Matt Cohen believes the Dimensional Fund Advisors offering will help it carve out market share in the increasingly crowded robo arena.

(More: Eduardo Repetto to leave Dimensional Fund Advisors.)

"There's a dedicated army of advisers who have decided to make Dimensional a core part of their practices," Mr. Cohen said. "The ability to offer that through our robo solution is a nice practice enhancer."

Mr. Cohen said Folio was the firm "best equipped" to handle these funds and helped tip the scales when selecting a custodian.


Without the brand recognition or the assets of the largest clearing and custody firms, Folio has found success in using its history as an entirely digital firm to attract technology startups serving niche markets. In addition to Invest Forward, Folio counts Ellevest, a robo-adviser for women founded by Sally Krawcheck.

Folio Institutional's president and CEO, Greg Vigrass, says that in addition to serving niche markets, these next-generation robo-advisers are looking for ways to move up-market and serve wealthier clients with more complex financial needs.

(More: Tools financial technology companies plan to bring advisers in 2017.)

Mr. Vigrass said that because Folio has always been a digital-first firm, it is better positioned to offer this advanced functionality.

"Unlike a lot of firms that are playing catch up to offer a digital workflow, it has always been how we've done business," Mr. Vigrass said. He said Folio was out in front of the modern trend towards digital engagement when it was founded in 1999. "As the market has progressed, we found we already had much of the traditional robo functionality."


While offering application programming interfaces (APIs) to fintech companies was recently a niche offering, it's increasingly a core part of the business for larger institutions. TD Ameritrade Institutional's Open Access API has enabled it to integrate and support dozens of digital advice companies, and Fidelity recently designed an entire custom-built technology suite for Lincoln Financial Network that will eventually include a robo-adviser.

(More: Investment firms race to master financial tech before potential super rivals.)

Ram Nagappan, Pershing's chief technology officer, says that while many consider his company a "traditional custodian," Pershing has been providing technology APIs for a long time. Mr. Nagappan added that Pershing's age and connections to BNY Mellon allow it to provide more functionality than newer firms like Folio.

"Look at the capabilities that we offer. Startups can't even come close because it would take years to build all that," Mr. Nagappan said. "We already have a lot of digital providers and robos on our platform, and that will continue to increase."

But Mr. Cohen said Folio's technology made it easier for Invest Forward's software engineers to plug into than other custodians. This "strong commitment" to being forward-leaning with technology is what led him to partner with Folio.


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