thewealthnet has reported before on predictions that established wealth management, asset management and banking brands will acquire standalone digital wealth management firms, or so-called “robo-advisers.”
The high costs of acquiring clients make it difficult for these new pure-digital brands to become profitable, while established financial services brands will want to gain the technology to offer to their existing and potential clients, or so the argument suggests.
Further evidence that this prediction may prove to be true has come from Europe, where BNP Paribas Asset Management has bought a majority stake in Belgium-based Gambit Financial Solutions. BNP Paribas said the deal is “in line with its objective to further expand its innovative offerings” and that Gambit will become “the preferred partner for robo-advisory solutions for BNP Paribas group’s retail and wealth management networks.”
Gambit was formed in 2007 as a spin off from HEC - University of Liege. It focuses on investment advisory solutions and in the digitalisation of customers’ engagement with financial institutions. It recently launched Birdee, its own direct to client “robo-advice” platform. Prior to this in 2016 it launched a “digital robo-adviser solution” that is already used by banks in Belgium and Luxembourg.
According to BNP Paribas, clients’ expectations on how they interact with their advisers have shifted as the digital revolution has taken hold. “This has led to a major rethink of the customer experience across all client segments, and involves constantly adapting to clients’ changing needs,” it said in a statement. “These requirements can now be addressed by optimising the client experience using reliable, user-friendly and adaptable digital interfaces.”
The deal remains subject to regulatory approval and would see Gambit remain independent from BNP Paribas, keeping its own governance, culture and management unchanged.
“The partnership with one of the most advanced robo-advisory solutions available in the market is a key milestone in our digital transformation and marks our commitment to delivering quality investment solutions to our clients,” said Frédéric Janbon, chief executive of BNP Paribas Asset Management. “Gambit and its management have built an impressive track record and a strong client base, and we are securing the talents that have driven its success. Moreover we bring our asset management expertise and client knowledge to Gambit and this powerful combination will lead us to quickly move along the digital experience curve in this field. This will significantly accelerate the pace of development and enrichment of our customer journey in the area of financial savings.”
In the UK market, Schroders bought a stake in Nutmeg in 2014
. At the time, Massimo Tosato, executive vice-chairman of Schroders said: “For over 200 years, Schroders has been at the forefront of innovation and this financial investment in an innovative and rapidly growing online wealth management business will allow us to engage in the digital changes that are influencing the asset management industry for years to come.”