SSGA takes stake in customised portfolio platform
State Street Global Advisors (SSGA) has made an equity investment in Ethic, an asset management platform helping financial advisers to produce bespoke portfolios.
US-based Ethic was founded in 2016 to help financial advisers personalise investment strategies based on client values and preferences.
The strategic partnership in SSGA, which is the asset management arm of State Street, will deliver customised investment solutions at scale to SSGA’s institutional and financial intermediary clients.
This includes the creation and management of customised separately managed accounts and model portfolios, a scaleable platform for customised portfolios based on goals and values and features such as proposal generation, portfolio transition plans and reporting.
SSGA noted it is witnessing clients increasingly expecting their portfolios to be tailored based on their individual values, risk tolerance and tax situation.
Yie-Hsin Hung, chief executive of SSGA, said: “This new partnership underscores our broader commitment to meeting the growing demand for customised portfolios. Ethic has seen incredible growth in a short period, thanks to industry-leading technology and deep expertise that help advisers deliver portfolios that reflect what matters most to clients. Ethic’s platform has become a standard-bearer for customisation, and we’re excited to help them reach new audiences.”
Doug Scott, chief executive and co-founder of Ethic, added: “We see our role as empowering intermediaries to help their clients invest in the future that they want to see. With this new funding round and strategic partnership, we’re excited to be accelerating the adoption of personalised, values-aligned, and tax-smart investing.”
Personalisation is becoming an increasing request for clients, especially in the high-net-worth space, with clients seeking portfolios that align with their needs.
A report by EY last year described how “hyper-personalisation” of client service models is growing in demand among every client segment.
“Clients’ financial and wealth advice needs vary widely according to their circumstances, needs and expectations, but the relevance of hyper-personalised advice in strengthening client relationships and client perceived net value is generally undisputed,” the EY Global Wealth Management Industry Report wrote.
The strategic and financial benefits of hyper-personalised services, EY said, include:
- Stronger long-term client profitability and overall financial performance than firms with more generic advice models.
- Enhanced customer loyalty and greater likelihood of clients consolidating their assets with their lead wealth provider.
- Higher yearly numbers of new clients per relationship manager.
- Materially improved positioning to address the intergenerational wealth transfer.
AUTHOR
Laura Dew
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