American portfolio crash-testing company, RiXtrema, has announced signing an exclusivity agreement and Memorandum of Understanding with a team of Australian wealth management experts led by James Sutherland, Founder and CEO of myonlineadvisers. The joint venture, unnamed at this time, is focused on empowering wealth advisers with online tools which will not only improve efficiency, but also help them to grow their practice and protect future revenue.
“Until now, robo advice platforms have been seen as the enemy of planning community because they could see customers opting out in favour of low-cost online advice solutions”, said Mr Sutherland. “Now planners will be able to leverage the growing client appetite for efficient online support to their firm’s advantage also. Ultimately we believe this simple plug-in will enable planners to provide better, more efficient service to more clients, allowing them to increase their accounts under management and drive revenue.”
Long used by fund managers, pension plans and funds of funds, RiXtrema has successfully introduced its risk management tools to the wealth management community in the USA and beyond to help ensure clients get the analysis and advice they need. Now a customised Australian version of both RiXtrema & Advisor BioniX will be launched to the independent financial advice market early in 2016.
“It makes good sense to integrate RiXtrema and Advisor Bionix into a wealth firm’s client engagement model. The planner saves time on paperwork and account management yet the ongoing automatic reconciliations will deliver even greater value to their clients. Everyone wins. It is online, proactive and robust.”
Rixtrema has been operating since 2010. Since then their portfolio management & crash-testing engine has been employed by some of the top fund managers and financial advisory firms worldwide, including the Stockholm-based Nobel Foundation. At the Foundation the RiXtrema risk model is employed to protect the endowment of Alfred Nobel, ensuring the continued ability to fund future Nobel Prizes.
This experience enabled the refinement of the Rixtrema portfolio builder and crash testing technology specifically for financial advice firms. Now planners can integrate these tools into their own platform, delivering best-of-breed client investment portfolios and proactively manage return expectations.
These tools give planners bandwidth by simplifying portfolio management and basic client interaction through automation. A key differentiator is the inclusion of basic financial planning questions on top of the standard online risk tolerance assessment. Both sources of information are collated and drawn upon in determining the optimal portfolio for the investor. These portfolios are based on a set of approved investments using a specific AFSL’s approved product list.
The information generated over time can ultimately be used by advisers as they prepare customised financial plans and, when the time is right, seek to convert clients from the online service to for-fee services. All this is done via a simple interactive web page which clients can use on any device.
“These are all exciting pieces of the puzzle”, said James Sutherland. “Advisers can now create a unique and differentiated investment offering, whilst taking advantage of low cost automation. We think this will sit well with ASIC as it takes modern portfolio theory to a whole new level and recognizes that no one size fits all. It will also deepen the value of the adviser’s customer engagement.”
RiXtrema President, Daniel Satchkov, said, “We weren’t actually looking at the Australian market. Yet the powerful team James has created combined with the clear opportunities in the Australian market formed a compelling argument. We saw a great opportunity to swing our resources towards creating an offering for the Australia advice community. We are fully committed to making sure our Advisor BioniX automation technology works within the confines of the Australian regulatory framework and James makes this much easier for us.”
Robo advice platforms have made low cost, easy access, online financial advice available to price sensitive customers around the world. Now, for the first time, Australian advisers will be able to integrate one of the world’s leading robo advice platforms into their business. Clients will still benefit from greater ease and efficiency, but under the expert guidance of the planning community.
Mr Sutherland finished with the statement “Our goal is to make it easier for advisers to give good advice to every day Australians at a price they can both afford.”
