Charles Schwab Corp. has acquired the technology and most of the remaining employees of Motif, the automated investing platform that closed its doors for good in April.
The fintech specialized in thematic investment strategies and allowed investors to trade weighted baskets of stocks built around environmental, social and governance principles, letting them invest in companies that promote social good.
Schwab's acquisition will include all of Motif’s technology and intellectual property, including algorithms, patents and source code, according to a release.
Terms of the all-cash deal were not disclosed.
For a subscription fee, Motif clients could create individualized portfolios that adhered to their own ESG guidelines and could see exactly which company stocks were in their portfolios — a level of transparency that is important to impact investors.
“We continue to see an increasing number of clients interested in customizing their investing experience to suit their values, objectives and personal circumstances,” Neesha Hathi, Schwab’s chief digital officer, said in the statement.
The purchase will help Schwab accelerate the development of thematic and direct indexing for retail investors and RIA clients, Hathi said.
Mutual funds that broadly support sustainability saw inflows of $45.6 billion during the first quarter, compared with outflows of $384.7 billion for mutual funds overall, according to a report from Morningstar Inc.
Motif listed approximately $869 million in assets and 184 clients on its latest Form ADV, filed in March, but only about $18 million was managed in discretionary accounts. Those accounts were sold to online brokerage firm Folio Investments.
Schwab also committed to hiring the majority of Motif’s development workforce, including founder and CEO Hardeep Walia.
“By combining data science and automation, we have developed an innovative and personalized investing platform that appeals to both individuals and advisers,” Walia said.
In addition to thematic investing, Motif’s technology platform supports real-time fractional share trading and can help enable tax optimization strategies within investment portfolios.
Earlier this week, Schwab announced it will begin offering fractional shares to clients in June, allowing them to buy stock “slices.” Fractional shares make investing more accessible for popular securities — especially pricey companies like Facebook Inc., Apple Inc. and Amazon.com Inc. — whose prices are higher than the investible assets many new investors have on hand.
Chinese stocks have been flying for the past month. Should US wealth managers go along for the ride?
The investment giant said Social Security numbers, driver's licenses, and other sensitive information was compromised by a third party using newly established accounts.
The employee-owned hybrid firm's latest hire in Fairfax reportedly managed $285M at his previous firm.
The tech-driven alts platform will provide support to advisors seeking customized portfolio access for their high-net-worth clients.
Growing uncertainty and short-term volatility are weighing on RIAs, with nearly half seeing at least some likelihood of recession.
Discover the award-winning strategies behind Destiny Wealth Partners' client-centric approach.
Morningstar’s Joe Agostinelli highlights strategies for advisors to deepen client engagement and drive success
