A robo in every advisor’s future?


By Tobias Salinger

October 17, 2017


Custodians are increasingly calling upon advisors to become disruptors.

Trust Company of America follows Pershing and LPL Financial in offering  robo tools to its advisor base, exhorting  RIAs to make their own automated offerings for smaller accounts. TCA CEO Josh Pace discussed its partnerships with digital firms at the custodian’s Focus on the Future conference last week. One of the firm’s RIAs has already  launched its own white-labeled offering.

Pace stresses that TCA would never try to imitate the client-facing robos of giant competitors like Charles Schwab and Fidelity. The smaller custodian’s approach does, however, provide the firm’s

225 RIAs and 7,000 advisors with an automated tool like one ushered in by LPL for its advisors.

“They’ve got their high-touch  wealth management  office. They may want a robo  solution that uses their strategies but it’s lower-touch, lower price point,” Pace says, noting TCA’s integrations with the Emotomy and Riskalyze Autopilot  platforms. “So they can just spin up their own robo.”



Chicago-based Interactive Financial Advisors set up a robo offering for its 57 affiliated advisors in the past year, according to chief compliance officer Joanne Woiteshek. The tool creates a portfolio for accounts starting as low as $1,000 after clients complete an investment strategy questionnaire,  she says.

“We can do it for any-size accounts but we’re trying to pick up speed with smaller accounts,” Woiteshek says.

Another TCA partner named USA Financial, a Grand Rapids, Michigan-based RIA, broker-dealer  and TAMP, is examining starting a robo tool over the next year or so, says COO Matt McGrew. The firm has 270 affiliated advisors and about $3 billion in assets under management and administration.

Trust Company of America CEO Josh Pace says to be successful in the future, advisors will not only need to have the right toolkit, they’ll need to know how to effectively use it.

USA Financial wants to figure out a way to craft its offering without constructing the client’s portfolio  through “six or seven questions” like popular robos on the market today, McGrew  says.

“That’s not how we train our advisors to work with their clients. You have that feel and that dynamic in a robo environment,” he says, predicting automated advice loses novelty and becomes commonplace, like satellite radios.

“Now, they’ve just become a component in your car. I think we’re going to see robos go down the same path.”



In the opening address of the conference last week, Pace touted

TCA’s integrations with other firms as a key area of accomplishment in the past year. The firm recently unveiled a partnership with Fi360 to use the Fiduciary Focus Toolkit on TCA’s Liberty platform for enhanced compliance under the fiduciary rule.

On the other hand, Pace acknowledged TCA has yet to finish a tech tool allowing for remote check scanning and needs to do better in eliminating  paper  account statements. He described  what the custodian, which has $17 billion  in assets under custody, sees as the advisor and RIA of the future.

“They have to be good jugglers,” Pace said. “It’s not only that they have a toolkit, but they’ve got to know how to use it. And that’s where I see a gap.”