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Cetera previews robo advisor plan

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Cetera will launch its robo advice offering in the first quarter of 2017, and it will be priced "on the lower end of the spectrum," according to top company executives.

The IBD joins a burgeoning digital advice market, which is replete with offerings from startups, custodians, wirehouses and asset managers.

"We're trying to make it as attractive and commercial as any other offering you can get access to," says Cetera President Adam Antoniades.

The IBD is working with a third party to develop the platform, he adds.

"We are closing in on a delivery of a solution that is integrated into a core fee-based solution," Antoniades says. "In our opinion, those aren't mutually exclusive. We believe households want both capabilities. Our choice wasn't to build something and keep it outside the spectrum. Our choice was to build it within and offer it to clients."

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Cetera's digital platform will inevitably be compared to offerings from industry stalwarts such as Vanguard, Charles Schwab and Fidelity.

In August, LPL announced it would be launching a robo advice platform based on technology provided by asset management giant BlackRock. A number of firms have said digital advice is the way they hope to reach a younger, more tech-savvy generation of investors.


Cetera doesn't envision a target clientele that will be solely served by digital, Antoniades says.

"We think there is a set of clients that are very much focused on that type of experience," Antoniades says. "But it's not necessarily only millennials, or only accounts below a certain amount. We have plenty of clients who have expressed an interest in a digital account that carry significant wealth.

"At the end of the day our job is to have an offering that accommodates that interest," he adds. "We see it as an engagement model, as much as it is an investment management one."

Some offerings, such as Schwab's Intelligent Portfolios, involve the advisor even in the on-boarding of a client, while other platforms are entirely automated.

"We have plenty of clients who have expressed an interest in a digital account that carry significant wealth."

"You'll see a number of different offerings that will come under a digital advice framework," Antoniades says. "In some cases it will look more like a solicited arrangement, in other cases it will be an advisor-assisted arrangement."

Cetera does not view offering a digital solution as cannibalizing clients from its advisor network, Antoniades says.

"We believe in the concept of advice, and I would differentiate that from digital investment capabilities," he says. "When you are in the business of delivering advice, this becomes a medium for meeting more comprehensive interests of clients.

"Certainly, we are not looking to disintermediate our advisors. They are our most valuable asset."


Despite a wealth management industry push to all things digital, the IBD is trying to be "thoughtful and considerate" in how it deploys an advice platform and how it frames the future of advice, says Cetera CEO Robert Moore.

"We're making sure we just don't check the box of having digital capabilities," Moore says. "We get the fact that this is an integral part of a set of capabilities and solutions that ultimately form this ecosystem. It's not just bolting it on and saying it's up and running."

Advisors will be confident to access the tool and will have full control over it, Moore adds.

"I don't view it as a source separate and distinct offering that sits alongside some other set of capabilities," Moore says. "Having a seamless access point to the advisor is part and parcel to the vision we have."

The firm sees a limit in the use of digital advice tools, Moore says.

"The digital solution just deals with a particular aspect of advice, predominantly investment choices, and to a lesser degree, some level of asset allocation and tax optimization. It's certainly not designed to provide a substitute or a replication of what an advisor does."

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