HSBC launching robo-adviser to expand wealth management footprint

The bank sees the technology, built in partnership with Marstone, as the key to its U.S. growth strategy

Oct 17, 2018 @ 12:36 pm

By Ryan W. Neal

HSBC Bank USA is turning toward digital advice to expand its wealth management footprint beyond its branch offices.

The bank will begin a pilot program of HSBC Wealth Track, a direct-to-consumer robo-adviser, in November before a public rollout in 2019.

HSBC will focus on bringing Wealth Track to existing customers who either prefer self-directed investments or have accounts too small for the bank's existing adviser minimums before using it as a tool to expand its presence in the U.S.

HSBC currently offers wealth management services for clients with at least $100,000 in assets and a premium service called "Jade" for investors with more than $1 million. Wealth Track will offer managed accounts to clients with as little as $5,000 in an individual retirement account or $10,000 for discretionary accounts.

Like other digital advice platforms, investors will answer a risk profile questionnaire and get assigned to one of five model portfolios based on risk tolerance. The portfolios will consist of diversified ETFs selected by HSBC's asset management group and will be rebalanced quarterly. Wealth Track will charge investors a 50-basis-point management fee.

HSBC developed the technology in a partnership with Marstone, a digital advice service that already has partnerships with Fiserv and Interactive Brokers. Marstone also is already fully integrated with Pershing, HSBC's custodian.

(More: Pershing taps Marstone partnership to debut first adviser-focused robo)

Wealth Track is part of a $130 million project to modernize the bank's digital experience to align with modern consumer expectations, said HSBC Bank USA head of innovation Jeremy Balkin.

Though several large and regional banks have already launched robo-advisers, Mr. Balkin doesn't believe the bank is too late to the digital advice game and will be able to differentiate Wealth Track from other products already on the market.

To start, HSBC will focus on bringing the robo-adviser to its existing retail banking customers instead of marketing it to a general audience. Many of these clients have international wealth and rely on HSBC for their unique needs, Mr. Balkin said.

The bank also sees Wealth Track as a chance to reach investors who aren't located near one of HSBC's branch offices along the East or West Coast. Mr. Balkin hopes it will create pipeline of future business by managing accounts for existing clients' children.

"It's the missing piece of our growth strategy in the U.S.," he said.

While other banks have trended toward the hybrid-robo strategy, which pairs automated investing and rebalancing with human advisers, the intial rollout of Wealth Track will be purely digital. Marstone founder and CEO Margaret Hartigan believes there is actually a large market of people who want automated investing without speaking to an adviser but acknowledged that this is only the beginning of a long-term partnership with HSBC. It's possible the firm could introduce an additional service tier with a hybrid robo-adviser in the future.

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

"Marstone's flexible solution allows HSBC to fully customize the platform, from implementing their own branding down to defining the investment offering, to make it truly their own," Ms. Hartigan said in a statement. "Our technology is not only a tool for digital transformation, in the case of this partnership, but also ensures HSBC's ability to continue delivering high quality solutions and services as their client base grows."


What do you think?

View comments

Recommended for you

Upcoming Event

May 14


Retirement Income Summit

Join InvestmentNews at the 13th annual Retirement Income Summit—the industry’s premier retirement planning conference.Clients and investors continue to search for retirement income solutions and personalized investing advice. This... Learn more

Featured video


The secret to working with next gen clients?

Alan Moore of XY Planning says working with millennials isn't as difficult as some advisers make it sound. Here are three strategies for success.

Video Spotlight

We started as a boutique firm with huge ambitions. Schwab was a perfect fit.

Sponsored by Schwab Advisor Services

Recommended Video

Keys to a successful deal

Latest news & opinion

10 millennials making their mark in Washington — and beyond

These next-generation leaders are raising their voices and gaining influence over financial advice regulation and legislation.

Warburg Pincus among private equity managers interested in acquiring Kestra Financial

Sources say Kestra is being valued at between $600 million and $800 million, about eight to 10 times EBITDA.

10 highest paid professions in America today

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

Former Merrill Lynch star broker Thomas Buck sentenced to 40 months in prison

He pleaded guilty to securities fraud in 2017; charged clients excessive commissions.

Rules for claiming Social Security at 70

Some individuals' benefits will begin automatically; others have to take action.


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 It'll help us continue to serve you.

Yes, show me how to whitelist

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


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print