The crossover between the robo world and asset managers to date has been confined to ETF giants buying digital advice startups, then transforming them into B2B platform offerings.

Adding to that mix now is a portfolio and risk modeling firm serving asset managers with its own institutional advisor offering, one that its chief executive claims can anticipate client behavior.

Driving that ability, says Dan diBartolomeo, president of Boston-based Northfield Information Services, is a dive much deeper into a client's background and finances than what many financial planning platforms currently do.

"One of the things we consider in our questionnaires is how tied your career is to the well-being of financial markets," diBartolomeo says. "This is a level of granularity other systems don’t work at."

Dan diBartolomeo, president of Northfield Information Services
Dan diBartolomeo, president of Northfield Information Services

Called Wealthbalancer, the tool relies on two proprietary approaches developed by Northfield -- the discretionary wealth hypothesis and the analytic hierarchy process. The former determines how much risk a client can take, the latter characterizes an investor's preferences.

The process seeks to address what diBartolomeo says is a problem of too much generalization and simplification in the multiple question approach employed by competing platforms.

"How would you change your asset allocation based on the likelihood of a divorce? There are theories about this. If you want to go to that level, you can. So many systems out there are simplifying markets to a tremendous degree -- just stocks and bonds, forget all else -- but you can't simplify household problems. Disability is real, divorce is real. These are large events to a household financially."

Acknowledging that Northfield isn't a well-known name in the retail investment space, diBartolomeo says that Wealthbalancer is a solution geared for the regional, wirehouse or potentially family office client.

Wealthbalancer is based on two proprietary approaches developed by Northfield.
Wealthbalancer is based on two proprietary approaches developed by Northfield.

But 30 years of serving institutional clients has proven the firm's investment approaches, says diBartolomeo, an active scholar in quantitative finance who also serves on the Board of Directors of the Chicago Quantitative Alliance.

A validated mathematical foundation, naturally, is what diBartolomeo stresses is one of Wealthbalancer's biggest strengths.

"Pretty much every financial firm has questionnaire for clients, the difference is the math behind the scenes," he says. "There's a lot of practical concerns in making most theories work well in the real world."

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