Citizens Bank has launched a digital investment advice platform, beating many rival banks with plans to do the same.
The new robo offering will allow the Providence, Rhode Island-based regional bank to attract and expand business with mass-affluent and affluent customers, two key target markets, while also satisfying the appetite for digital advice among its wealthier clientele, said John Bahnken, president of Citizens Bank Wealth Management.
“We think it's a game-changing service that will make investing more accessible to a larger set of customers,” he said.
The new platform, called SpeciFi, comes nine months after Citizens struck a deal with SigFig Wealth Management to build it. It has been rolled out to roughly half of the 2.65 million households the bank serves, with the remainder to come on board by the end of September, according to Bahnken.
Citizens joins a growing number of banks that have either unveiled robo platforms or announced plans – or hinted at plans – to do so. Capital One, for example, introduced a digital offering last year. Wells Fargo is wrapping up internal testing in preparation for a national roll-out of its digital investment offering this fall, while J.P. Morgan Chase is developing capabilities that it plans to launch later this year. U.S. Bank is on schedule to introduce its platform in the "fall time frame," it says.
Citizens is touting its investment platform as the first among large regional banks to be integrated with its banking services, describing it as a “fully integrated digital banking and wealth advisory offering.”
"It’s a well-integrated digital process from beginning to end," Bahnken said.
Customers need a minimum of $5,000 to open a SpeciFi account, an amount Bahnken said was the “right entry level.” The bank would have liked to go to a smaller minimum but opted not to because that would involve the use of fractional shares and make it difficult to construct a diversified portfolio, Bahnken explained.
The platform provides access to financial advisors and lends additional support by phone, chat or email. The advisors are available during the account-opening process and whenever customers have questions. All advisors are fully licensed, Bahnken said.
The digital service recommends investment portfolios for customers based on their goals and monitors and rebalances them regularly. It also gives customers the ability to set up automated recurring contributions to their SpeciFi account from their Citizens Bank deposit accounts.
The bank plugs the platform's investment guidance tool, which allows customers to compare their existing investment accounts with the SpeciFi portfolio recommendation, an exercise that often highlights potential red flags, according to Bahnken. The tool, for example, might pinpoint allocations in the customer’s existing portfolio that are out of sync with their goals or identify high-cost mutual funds or ETFs. The comparison and one-page summary of red flags the tool generates have prompted many potential SpeciFi customers to schedule free one-on-one consultations with financial advisors.
Customers pay an annual asset-management fee of 50 basis points, less than half the fee for a traditionally managed account with a dedicated financial advisor. Those who open an account prior to the end of the year will be able to use the service for 90 days for free.
“We’re well aware that there are lower-cost providers but they tend to be a much more narrow offering than what we're providing,” Bahnken said. “There’s a lot of value in this full integration between banking and investing and access to advisors in multiple different ways throughout the onboarding or at any time."
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access