At heart of deal with UBS: SigFig's independence

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UBS' partnership with SigFig to develop digital advice tools for its roughly 7,100 advisers, allows the technology developer to sign deals with other firms – a fact that UBS executives not only acknowledge, but welcome.

"We do not want to dominate that relationship. We want them to be successful," said Richard Steinmeier, head of the Wealth Advice Center at UBS, speaking at SourceMedia’s annual In|Vest conference.

The wirehouse struck a unique partnership with SigFig, eschewing the path chosen by firms such as Charles Schwab and BlackRock, which opted to develop the technology in-house or acquire robo startups, respectively. The two firms are forming an adviser technology lab as part of the deal, which included UBS making a disclosed investment in SigFig.

Read more: UBS bets wealth want robo advice, too

Steinmeier said that the UBS-SigFig partnership protects the Silicon Valley firm's independence, and thereby its ability to innovate – something that will help UBS and its advisers get access to leading edge technologies at a faster pace than many of its rivals.

"I want him to sign a bunch of deals, to be terribly successful," Steinmeier said.

New technologies, which advisers will start seeing at the end of 2016, will ultimately enable UBS to capture more wallet share and permit advisers to focus more attention on clients' dreams and goals, Steinmeier said.

SigFig CEO Mike Sha, who also spoke at the conference, said that he has seen a major shift in the past year in attitudes toward digital advice capabilities.

"We work in an industry today where you can't walk into a board room of a wealth management company where this isn't a topic of conversation," he said.

Last summer, UBS' top executives – including CEO Sergio Ermotti – visited SigFig's offices in San Francisco.

"That is strange because we are a small firm. We got to know the people at the very top," Sha said.

"We work in an industry today where you can't walk into a board room of a wealth management company where this isn't a topic of conversation," says SigFig CEO Mike Sha.

Steinmeier pointed to that as an example of how serious UBS executives have been thinking about how digital advice tools can be useful to the firm's advisers.

For Sha, the UBS deal also presents an enormous opportunity. He noted how difficult it is for startups to acquire new clients. Partnering with a firm that manages more than $1 trillion in client assets allows SigFig to make a much more meaningful impact than it could on its own, Sha said.

He added that the two firms also see eye to eye philosophically, that the financial adviser will stay at the heart of the client relationship.

"Wealth management is a trust-driven business so we need to partner with firms that are established, have been around and have established trust with their customers," Sha said.

Steinmeier jokingly – perhaps only half-jokingly – added that attendees would have to come back next year to see the results of the two firms' innovation lab.

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Robo advisors Automated investing Investment technology Wirehouses Wirehouse advisors UBS Wealth Management SigFig In|Vest