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United Income's Benjamin Button Moment

The robo advisor wants to help investors of all ages manage their debt. Is it a sign of something larger, now that the investment manager is owned by Capital One?

Capital One’s plans for its recently acquired United Income unit are becoming clearer, as the new owners encourage the investing platform to expand its service offerings to attract younger investors. As soon as next week, the automated investing service will incorporate investors’ debt and spending into feedback and investment decisions provided by the robo advisor, according to information provided to in an email and conversations with company executives. The modifications are designed to better align cash needs with investment strategies, as well as model client spending years into the future.

United Income is framing the new cash flow-based and spending goals-based investment strategies, in particular, as a boon for younger investors. While the robo was never closed to pre-retirees who could meet its minimum investment thresholds, it launched in 2017 as a direct-to-consumer money manager for clients squarely in the pre-retirement age bracket of those 55 to 70. The imminent launch of these new features marks a measured departure from its old approach and materials describing the changes note its new “age-agnostic” investment strategies.

Insights gathered and conveyed to clients about debt held by the investor would be especially well-suited for younger investors digging out from student loans or those interested in buying their first home, said Andrew Vincent, head of product at United Income. Those are not typically situations faced by retirees.

Indeed, the focus on debt at United Income is part of a larger trend among wealth managers, both human and machine, in seeing the value of providing financial advice on both sides of the ledger. Earlier this year, Envestnet partnered with Advisor Credit Exchange to launch a portal-like feature linking financial advisors to lenders providing secured and unsecured financing. Besides offering credit cards, Capital One also has a banking division.

But United Income, acquired by Capital One last July, declined to reveal more about a possible link between its investment management services and the consumer-facing lending capabilities of its new ownership. “We’re in the early stages of integration. We’re excited to be a part of Capital One and about the opportunities that will be available to us and our customers through that,” said Elizabeth Kelly, head of growth. “It’s too early to say more.”

The robo advisor did reveal that it is already using Capital One’s market research and anonymized information based on the financial service company’s anonymized customer data. That information helps the automated investment platform manage cash flow and predict year-by-year spending. The new data complements the division’s traditionally heavy reliance on research data, from sources like the Department of Labor and RAND Corporation.

United Income’s median client age is 60, said Kelly. It’s a demographic reflection of the marketing push the firm employed when it launched three years ago.

The framing of its newest features, however, marks a change at United Income: Capital One wants to expand the reach of its robo advisor.

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