GARDEN GROVE, Calif. — As competition intensifies within the B2B digital platform market, Riskalyze announced a new version of its robo advisor, Autopilot, stressing that a deeper approach to serving advisors was needed.

"Automating client engagement and account opening isn't quite enough," says Riskalyze CEO Aaron Klein, who made the announcement Wednesday before an audience at this year's T3 Conference.

"The problem with automation has been that there has been no personalization. The problem with personalization is that there's been no scale. The advisor of the future is going to have to fuse those together in order to survive."

Reflecting the industry's concern with meeting the Department of Labor rule requirements, Riskalyze has dubbed the latest iteration of its two-year-old digital platform as a "One-Click Fiduciary."

Klein says that advisors on the platform can access any blend of funds or stocks to build a portfolio, assign models to client accounts, and trade across custodians. Multi-custodian accounts can be automated too.

"We think that automating client engagement and account opening isn't quite enough," says Riskalyze CEO Aaron Klein.
"We think that automating client engagement and account opening isn't quite enough," says Riskalyze CEO Aaron Klein.

"If an advisor changes one of their models and that affects 75 different client accounts, they will be able to sift through these accounts, and say, 'These five accounts I'm about to meet, so I'm going to snooze those for a week. The rest of them I click approve and send them along through.'"

His firm decided to tune the platform to reflect how the 19,000 advisors were already engaging with it, he adds.

"Twenty-six percent use a managed account platform to solve this problem. But the other 75% are do-it-yourselfers. They want to maintain control of the portfolio and they want to personalize and actively manage each clients' situation. The DIY model and the old robo model really isn't going to cut it anymore."

For advisors with a Riskalyze license (the firm also announced a new tier of service) pricing is set at 15 basis points and is lowered to 10 bps with $5 million on Autopilot. Klein says the majority of Autopilot clients are advisors managing between $50 to $65 million.

A number of digital-first firms and traditional brands have developed and are offering their own platforms for advisors, including Betterment, Schwab and Invesco. Others, such as BlackRock's FutureAdvisor and SigFig, have made a beeline to develop enterprise robo solutions for institutional advisor forces.

In the RIA space, Klein downplayed the competition from automated advice firms.

"I very much believe that investing is a lot like tax preparation. We all could use Turbo Tax, but about four times as many people go to H&R Block.

"They are finding it pretty difficult to compete with human advice and that's a whole other discussion," Klein says, referencing Betterment's recent announcement to offer hybrid advice.

"We are equipping thousands of advisors to effectively compete against Betterment and Wealthfront and I think it's working."

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Ann Marsh

Ann Marsh

Ann Marsh is a senior editor and the West Coast Bureau Chief of Financial Planning. Follow her on Twitter at @Ann_Marsh.