To better attract and retain mass affluent investors, Capital One is the latest bank adopting the digital-human hybrid model for its retail investor clients.
The McLean, Va.-based company announced Monday that it would combine Capital One Financial Advisors, it’s bank-based brokerage business, with Sharebuider, its online trading platform, into a new entity called Capital One Investing.
The new business model will use ShareBuilder’s PortfolioBuilder to help investors create a digital portfolio comprised of up to six ETFs. While it uses some of tools common to the robo-advisors, such as a questionnaire to help create an allocation model, PortfolioBuilder is a self-directed platform where users picks their own ETFs instead of relying on an algorithm to pick them automatically. Each portfolio costs $18.95 to open and a minimum investment of $200.
Investors can then create an investment plan to electronically add funds in any amount and use an online calculator to estimate how contribution changes will affect retirement income.
In the fall, Capital One Investing will launch a new call center for investors to get personal advice from a financial advisor regardless of the size of their portfolio. Clients with at least $25,000 in their portfolio will have the opportunity to meet face-to-face with a Capital One advisor, and clients already working with advisors will be able to access ShareBuilder’s tools to track their investments online.
Yvette Butler, president of Capital One Investing, said the move would help better serve the mass affluent investors who use both self-directed and advisory firms.
“Consumers want their financial life to catch up with their digital life,” Butler said. “There’s so much you can do digitally. It’s intuitive, its simple its easy to understand its costumer-based or customer-centric. How do you apply all of that to financial services?”
The combination will also provide Capital One’s advisors with new digital tools. Butler said Capital One is rolling out Salesforce and eSignature to its advisors now, and the fall will bring a mobile platform integrating MoneyGuidePro and Envestnet, as well as a video chat and multi-channel scheduling.
“[This] really gives us the ability to serve all of Capital One’s customers, and that was another reason to put the businesses together,” Butler said, adding that ShareBuilder struggled to retain assets once investors accumulated a certain amount of wealth. “The digital side, ShareBuilder, has tons of scale but obviously didn’t have advice, and then the advisory side has great face-to-face interaction, but we don’t have branches in California, as an example.”
Capital One acquired ShareBuilder as part of its acquisition of ING Bank in 2012. The bank doesn’t disclose the how many advisors it employs or assets under management.