Apex Clearing has added a new, fast-growing robo advisor service for RIAs in a partnership the turnkey asset management program says will bulk up its offerings.
RobustWealth struck the agreement with Apex to allow for trading with no additional fee on top of its platform charges, along with other capabilities, the firm announced earlier this month. The Lambertville, New Jersey-based TAMP already has $750 million on its platform, according to founder Mike Kerins.
The partnership comes six months after Apex lost Wealthfront, one of its major clients and an independent leader in the robo space with about 160,000 clients and $8.3 billion in assets under management. The clearing firm still has retained competitors like Betterment, Stash and Robinhood as clients rush to the robo space.
RobustWealth, like some other asset managers and several custodians, is tapping the business-to-business possibilities by giving advisors a white-labeled product. Its platform opened in January, and advisor Bob Dunn says RobustWealth’s deal with Apex will help him grow his practice.
“With Apex, transaction costs go away,” says Dunn, the president of Princeton, New Jersey-based RIA Private Wealth Management Group. “When you’re dealing with smaller accounts, it’s a no-brainer.”
‘LOTS OF LOVE’
Advisors who don’t think they need a robo partner just don’t know yet that they need one, according to Dunn. He has 15 clients on RobustWealth’s investing programs, but he says he had been waiting to place more clients on the platform until the firm joined a partnership with Apex.
Advisors can trade ETFs, mutual funds and U.S. stocks on the platform because of the deal, which also enables fast client onboarding, account linking and bank transfers.
RobustWealth has 98 RIAs on its platform, which has grown each month by a range of $50 million and $100 million, according to Kerins. RobustWealth will keep TD Ameritrade as its other custodian and advisors may now choose between TD Ameritrade Institutional and Apex for their clients, he says.
The clearing announcement follows a new TAMP launched in August by RobustWealth and the XY Planning Network for its more than 450 advisors. Seeking to provide a one-stop tech shop, Kerins sees easy account opening and automated portfolio rebalancing as two main boons it can offer advisors up front.
“We want to understand what pain points they have. We have a broad client range and we give everyone lots of love,” says Kerins, the former head of a team managing a $40 billion global portfolio at Franklin Templeton Investments.
Dallas-based Apex is opening just under 300,000 new accounts each month, with more than $30 billion in combined AUM among its client firms, according to CEO Bill Capuzzi. While some other firms will follow Wealthfront by bringing their infrastructure in-house, Apex provides technology that robos can leverage for scale, he says.
“Apex is the proverbial man behind the curtain,” Capuzzi wrote in an email. “Our job is to automate all the processes that lie beneath most all of the advisory interactions with their clients."
On the other hand, RobustWealth is “a late entrant for an idea that has been built already,” says Lex Sokolin, the global director of fintech strategy at London-based consulting firm Autonomous Research. He names Betterment, AdvisorEngine, Trizic and Schwab Intelligent Portfolios as providing similar services.
However, robos’ as-yet untapped future market penetration does present RobustWealth with an opening, according to Sokolin.
“The goal-based approach and trading capabilities are hard to get right, especially in combination with outsourced account management,” he wrote in an email. “In the end, the advisory market is large and signing up new firms is a process of sales blocking and tackling, so we should see additional traction in all the players.”
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