By Julie Verhage
(Bloomberg) --Citizens Financial Group Inc. is the latest bank to start a robo-advisory product as part of its larger push into wealth management.
Citizens, a regional bank based in Providence, Rhode Island, is providing the technology to customers beginning Wednesday through a previously announced partnership with SigFig Wealth Management LLC, which uses algorithms to provide financial advice at lower fees than traditional human advisers. UBS Group AG and Wells Fargo & Co. have also announced partnerships with SigFig, which are expected to begin in the next few months.
“The marketplace demand for a low-cost, digital solution is very strong,” Bob Hedges, head of the global financial services practice at A.T. Kearney Ltd., said in an interview. “Some competitors are moving faster than others, mostly due to their view of how disruptive it will be for current business models.”
The minimum initial investment in the Citizens offering will be $5,000, according to the firm. The annual asset-management fee is 50 basis points, or about half the typical cost of a traditionally advised account.
Money managers have increasingly built their own, bought or partnered to provide automated investment advice. The world’s largest asset manager, BlackRock Inc., purchased FutureAdvisor in 2015. Charles Schwab Corp., Vanguard Group and Fidelity Investments have developed robo-adviser offerings in the past two years, and JPMorgan Chase & Co. chief executive officer Jamie Dimon told investors in his annual shareholder letter that the bank is creating one.
To contact the reporter on this story: Julie Verhage in New York at [email protected] To contact the editors responsible for this story: Jeremy Herron at [email protected] Margaret Collins, Steve Dickson