U.S. Bancorp is the latest banking company to offer a digital investment advisory product, but its rhetoric is just a little bit different than the average technology pitch that normally revolves around younger customers.
The Minneapolis company's investment arm has partnered with FutureAdvisor, an investment advisory firm owned by BlackRock, to develop the product, called Automated Investor.
The bank first struck up the partnership with BlackRock in 2016. It has spent the time since then perfecting the service in various beta launches before formally rolling it out to all customers Tuesday, said Mark Jordahl, president of U.S. Bank Wealth Management.
Robo advisers are typically associated with millennials, but Jordahl said that is not necessarily U.S. Bancorp's attitude.
"Your mind does first go to the digitial-native individuals” when thinking about such products, but the bank expects its robo offering to be popular “across all wealth segments,” he said.
“For the emerging affluent customer or the younger investor who may benefit from straightforward portfolio strategies, Automated Investor can be a great fit,” Jordahl said. “Obviously it’s different for each client, but I think there’s more of an appetite for digital services across all segments.”
Fifth Third Bancorp earlier this month announced a new robo product. Wells Fargo launched a hybrid robo-adviser in November. Webster Bank in Connecticut now offers an automated advice offering paired with human guidance. And the online-only Ally Bank has moved quickly to supplement their offerings with automated investing.
U.S. Bancorp's robo product brings together the capabilities of FutureAdvisor’s technology platform in a secure online environment with the investment strategies and personalized service from U.S. Bancorp Investments, Jordahl said.
“When thinking about the biggest challenges and opportunities in wealth management these days, we’re really thinking through client journeys and the new and different ways clients want to access our services,” he said.
The investment portfolios have been created by U.S. Bank wealth management professionals and will have access to “the same investment content from our investment team” that all wealth management clients receive, Jordahl said.
The technology seeks to optimize returns and help minimize risk, and automatically rebalances investments as the markets change, he said. Users can receive a free analysis of their investments to see how they are performing and how they can potentially improve. Automated Investor is now available to customers via usbank.com and the bank's mobile app.
The fee for using Automated Investor is 50 basis points per asset under management. The service also features 24/7 service desk access.
“Digital advice platforms will continue to transform how consumers work with advisers and engage with their investments,” Robert Goldstein, chief operating officer of BlackRock, said in a news release. “The combination of digital and human advice, packaged appropriately together, can improve outcomes for both financial advisors and their clients.”