“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 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,” Vigrass says.
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. 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.
Other RIAs wanted to include a robo-advisory platform as part of their firm to expand their client base and serve a new generation of investors.
Still others, like Chris F. Parker, client advisor at Parker Financial Planning LLC in Greenville, S.C., recognized that their clients wanted to interact with advisors via multiple channels.
“I added the Folio AcX as a link on my firm’s website because it provides flexibility to a potential client in how they can choose to engage in services,” Parker said via e-mail. “Clients expect choice today. The Folio RIA trading and custody platform is highly user-friendly for me as an RIA and my clients. Folio has created the AcX platform the same way. It is a nice benefit for me as a practice owner to have this option available through my chosen custodian.”
AcX is backed by Folio’s own clearing and custody programs.
Folio has moved to expand its robo-advisory offerings, creating an API service that allows financial advisors more direct control over the way their website looks and functions. This service is used by Sallie Krawcheck’s Ellevest robo-advisory platform, by Pacific Life’s Swell Investing robo-advisor and Invest Forward.
Moving forward, Folio is working to create a new online investing platform designed to help advisors reach novice investors. The firm is also working to implement features like direct indexing and machine learning to make robo-advisory services more customizable and efficient, all with the advisor in mind.
“We favor having something that is open architecture and adaptable to whatever trends are out there in the industry, and wherever someone’s head is in terms of what they’re building and delivering,” says Vigrass.