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Eaton Vance Backs Robo Start-Up SigFig Wealth Management


Mutual fund firm Eaton Vance (EV) announced on Tuesday that it was the lead backer in a $40 million fund-raising round for robo-advisor start-up SigFig Wealth Management. 

Boston’s Eaton Vance was joined by New York Life, Santander and UBS, among other partners, to provide $33 million in equity and $7 million in debt financing. SigFig has an asset management service and provides technology services to financial firms. SigFig has recently announced a series of partnerships with banks and wealth management platforms, including UBS Wealth Management Americas and Pershing Advisor Solutions

Analyst William Katz at Citigroup helps upbraid the Silicon Valley jargon and spells out what the investment means for Eaton Vance:

“SigFig tends to rank in the top 10 of industry Roboadvisors with FutureAdvisor the closest competitor, per management. The company is focused on serving as an integrated platform to intermediaries. …

The investment makes sense for EV on several fronts. First, SigFig has an end goal of providing low-cost options for investors through various product types – a logical fit for NextShares*.

Second, the partnership with SigFig should connect EV with a wide array of distribution platforms as more intermediaries sign up.

Third, given recent DoL regulation we believe Roboadvisors will be a key distribution channel for Asset Managers given shift toward lower fee products better positioning EV to capture future flow trends.

Fourth, investment shows EV’s forward strategic thinking alongside BLK (FutureAdvisor) and IVZ (Jemstep) in fostering innovative distribution channels, though from a smaller initial investment.”

Eaton Vance joins a slew of financial companies to make investments in robo-advisors and tech companies. In January,  Invesco (IVZ) purchased Jemstep, an advisor-focused platform that allows users to customize asset allocations through mix of index-tracking exchange-traded funds and actively managed mutual funds, among other services. In March, Goldman Sachs boughtHonest Dollar, a start-up that streamlines how users set up retirement accounts that are managed by Vanguard Group. BlackRock (BLK) acquired FutureAdvisor last year.

First appeared at Barrons

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