RIAs have come to embrace robo-advisor technology, and Folio Institutional might deserve some of the credit.
In 2014, when McLean, Va.-based Folio launched its Advisor Connexion (AcX) digital advice platform, many in the financial planning industry considered robo-advisors a disruptive threat to their businesses.
“We never believed that robos would put advisors out of business,” says Greg Vigrass, president and CEO of Folio Institutional. “We thought that it made sense that advisors would come to embrace the robo-advisor trend, some would turn themselves into robo-advisors, others might be interested in simply adding parts of the robo-advisors.”
Today, more than 77 RIAs work hand-in-hand with the AcX, notes Vigrass, using the white-labeled turnkey robo-technology to enhance their firms.
Folio discovered that elements of robo-advisor platforms, like simplified on-boarding and account opening, could be used by independent advisors to create efficiencies and more profitable practices.
“We have always been a highly automated company, but a few years ago we really started looking at how business was being done, what the trends were, and realized that elements of the robo-advisor trend were really attractive for advisors,” he says. “We took elements of the digital, robo-advisor work flow that made sense for traditional advisors to automate, and decided to offer them directly to advisors.”
Folio’s offering, when launched, was one of the first directed at advisors that wasn’t linked with a larger broker-dealer platform, notes Vigrass, and was one of the first that allowed advisors to modularize elements like questionnaires, portfolio models and investment selections.
Thus, as investor tastes have changed, advisors using AcX are able to change their models to account for those changes, implementing socially responsible investing, impact investing and environmental/social/governance-style investing within their offerings.
Jesse Mackey, chief investment officer at Syosset, N.Y.-based 4Thought Financial Group, sought out a robo-advisory-like solution to help on-board clients.
“I found that after searching through several potential robo-advisory service providers, Folio’s AcX provided the best bang for the buck,” said Mackey via e-mail. “Folio has been flexible with implementation as well. For example, although they provide a turnkey questionnaire built into the program, this was not something we wanted, so they agreed to help us build in our own questionnaire and link it to their electronic account on-boarding features.”