Eaton Vance added its name to the growing list of asset management giants buying
into robo advice platforms, reinforcing the industry view that digital is a distribution channel for the future.

Eaton Vance led a consortium of investors including New York Life, Bain Capital Ventures
and UBS, provided $33 million to San Francisco-based robo adviser SigFig.

“We don’t have any current plan to become a fintech investor — we are asset managers,” said Thomas Faust, CEO of Eaton Vance. “We do think it can help us become better investment managers grs in time.”

The robo adviser had just landed a deal with UBS to develop a robo for its 7,000 advisers. And earlier in May, it secured a place on Pershing’s custodial platform as an option for its advisers.

SigFig CEO Mike Sha declined to state his firm’s valuation as a result of the new round of funding. The firm had raised nearly $20 million in four previous rounds of funding, mostly from venture capital firms.

“We designed this round actually to include a lot of high quality financial institutions,” Sha says. “We are working with these institutions to power technology in the wealth management space, so what better way to involve some of those firms than through an investment syndicate?”

Despite UBS’s larger interest in SigFig, Sha says his firm will remain neutral and that in this syndicate of investors, “no one party has special rights… no one firm has a controlling stake.”

The funding will provide for a “pretty dramatic expansion of the team and platform,” Sha says, and help ensure SigFig remains “neutral and independent. We can build an independent standalone business that won’t get swallowed by another big institution.”


Industry observers compared Eaton Vance’s investment to that of other asset
management firms that have bought into robo advice platforms, including Invesco’s
deal for Jemstep and BlackRock’s acquisition of FutureAdvisor.

“I speculate [financial institutions] are adding funds to robos because they see the technology as a way to sell more products to investors and eventually
make their money back in product sales and distribution,” says Bill Winterberg,
founder of

Eaton Vance is a minority investor in SigFig and not in a position to drive their business or force them to use their strategies, Faust says.

With SigFig being their first and likely sole fintech investment, Eaton Vance is interested in learning about the digital advice evolution that will change the market, Faust says. “We think this a special time in the evolution of investment advice, a critical time. We want to be close to that.”

Faust sees robo advice platforms expanding beyond their current base of low-cost ETFs and start including more complex investment vehicles, including custom beta strategies.

“As robos grow up, it will become a tool for clients of all types,” he says.


The funding announcement is the third for an online advice platform this year, on the heels of Personal Capital receiving a $75 million boost from a Canadian firm and a $100 million infusion provided to Betterment in March.

The trend challenges earlier industry predictions that independent robos would die off, drained by a lack of financial support and a tough competition to gain client assets.

A survey of CEOs by industry research firm Tiburon Strategic Partners in March found that the majority thought funding to online advice firms would stagnate or grow only modestly
this year.

“I’d stick with my broad view,” says Chip Roame, managing partner of the Tiburon, Calif.-based research firm. “Only the best robos are getting funding. We count 40-plus robos. Along with Future Advisor which BlackRock bought and LearnVest which Northwest Mutual
bought, the funding has started to narrow to the leaders.”

Robo advisors continue to creep into traditional product territory.

Wealthfront, the second largest independent robo, announced at the beginning of the month that it would be introducing a 529 college savings plan, the first robo to do so.

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