BlackRock has announced it will be transferring retail clients from its robo-advisor, FutureAdvisor, to Ritholtz Wealth Management after shutting down that portion of the business.

The New York-based BlackRock first acquired FutureAdvisor in 2015 and soon after the firm expanded the robo-advisor to also include a business-to-business component.

David Goldstone, manager of investment research at Martinsville, N.J.-based Condor Capital Wealth Management, said the business-to-business component became its primary focus.

“[BlackRock] really has not marketed or improved the direct-to-consumer portion of it in some years,” he said. “Even a few years ago it was really difficult to find on the website how to sign up to become a direct-to-consumer client [so] it really hasn’t been marketed toward direct-to-consumers or to individual retail investors in some time.”

BlackRock announced it would be shutting down that line of business and selling the assets of its direct-to-consumer line of to Ritholtz, a wealth management firm based in New York. It is unclear if the deal also includes FutureAdvisor’s B2B business. At the time of the sale, FutureAdvisor had $1.8 billion in assets, according to published reports.

A BlackRock spokesman confirmed the transaction, but declined to comment on the business-to-business branch of the sale. The firm did assure its clients that they will experience a smooth transition over to Ritholtz.

“We are proud of having served FutureAdvisor clients over the last eight years and are confident that Ritholtz, a national, multibillion-dollar wealth management firm, has the ability to meet the demands of clients seeking digital solutions for their investing needs,” a BlackRock spokesman said in a statement.

Ritholtz declined to comment on the transaction, but released a statement welcoming its new customers.

“Ritholtz expects that FutureAdvisor clients will seamlessly transition to Ritholtz, where they’ll receive access to dedicated goals-based financial planning and cutting-edge technology,” the firm said in its statement. “Ritholtz advisors and support staff are looking forward to helping them achieve success in all aspects of their financial lives.”

Ritholtz already has its own robo-advisor, Liftoff. The firm gave no indication if it would look to merge these new clients with its existing ones.

BlackRock highlighted its other services, such as its Aladdin Wealth platform, which is portfolio analytics and risk analysis software for advisors. Its main function is its portfolio analysis. 

“BlackRock will continue to serve wealth management firms with our Aladdin Wealth technology offerings,” the firm said in its statement.

The decision to terminate FutureAdvisor’s direct-to-consumer line of business is part of an ongoing trend as standalone robo-advisors throughout the industry struggle to make a profit, observers said.

“Servicing small accounts with rock-bottom fees is difficult to make profitable, even when most of the servicing, advice, and trading are automated,” Goldstone said. “I think FutureAdvisor has suffered from the same problem that many robo-advisors have.”

It has been an ongoing trend of robo-advisors either shutting down or being acquired by other firms that Goldstone believes is nearing the end. The main problem that has plagued robo-advisors in good economies and bad is how to acquire new customers and to make a profit off those customers.

“I believe costs to acquire customers have been persistently high across the industry, and with razor-thin profit margins, it has been difficult for robos to attract enough clients and assets to achieve attractive profits,” Goldstone said.