Dec 01, 2020
Retail trading platforms have experienced a surge in interest since the start of the pandemic, especially among those who are dialed into the markets. However, for every one of those, there are many more individuals who are interested in or feel like they should be investing more but don’t know how to get started. That’s where robo-advisors come in. By providing bespoke but mostly automated advice for end-users firms can reach this constituency and help it prepare for the future without taking on the enormous task of teaching them the intricacies of investing and trading.
Xignite has had the privilege of working with numerous firms as they have worked to build or augment their robo-advisor platforms. As these tools must draw upon enormous amounts of historical market data to make their recommendations, Xignite’s developer-friendly and endlessly scalable APIs are an ideal solution for efficiently building apps that can field an enormous volume of customer requests. Many robo-advisors also leverage Xignite APIs to keep users informed, offer important context on issuers, send alerts at the most opportune moments and more.
Below, read up on five Xignite-powered robo-advisors who are revolutionizing how individual investors interact with the markets, and three you should watch.
The Standard Bearers
Betterment -- It’s often true that the most difficult times give rise to transformative new ideas. That’s certainly the case with Betterment, a robo-advisor founded in 2010 in the wake of the financial crisis. In addition to helping its users build portfolios that can weather the market turmoil of all stripes, Betterment provides numerous avenues to giving back. For example, it offers socially responsible investing, allowing users to ensure their portfolios align with their values. Users can also gift appreciated shares to charity directly through Betterment’s platform.
Ellevest – Tailored investment advice is a great thing. Tailored investment advice that helps address longstanding inequalities is even better. That’s what users get with Ellevest, a subscription-based robo-advisor that bills itself as built by women, for women. This is crucial because there is a gender investing gap in our society – even after adjusting for the pay gap, women are not as likely to play the markets as men. By providing tools that empower women to reach their financial goals, Ellevest is on the frontlines of the fight to change this.
Personal Capital – While it provides automated, personalized investment advice to its users, Personal Capital does not want to be referred to as a robo-advisor. It takes the concept a step further, offering financial advisors (yes, real people) standing by to work with users to identify strategies that are right for them. The firm combines this personal touch with a variety of features to help users understand their investments and broader market dynamics. Its Recession Simulator, launched in June, helps them visualize how their portfolio would have fared during notable market downturns.
SoFi -- Best known as a leader in the student loan refinancing space, SoFi has in recent years built SoFi Invest to support its highly-educated client base throughout their lives. Automated investing has been a key part of this push. By combining a host of cool features – live newsfeeds, advanced visualization capabilities and curated lists of stocks based on given criteria – the firm is helping users learn more about the markets at the same time it is providing optimized strategies. It’s also making the most of our alerts capabilities, with 10% of users who receive a notification making a trade within the hour.
Wealthfront – Wealthfront was the first and remains one of the biggest names in robo-advising and it has a team to go with it – Chief Investment Officer Burt Malkiel played a key role in the rise of passive investing decades ago. Today, Wealthfront brings those same efficiencies to its users in the form of PassivePlus – its suite of rules-based investment strategies including tax-loss harvesting, risk parity and smart beta. Users also get free access to Path, a digital financial planning tool that helps identify long-term goals and adjust strategies accordingly.
MoneyFarm – Founded in Italy in 2012 and having moved to the UK in 2015, Moneyfarm has seen rapid growth in recent years and expanded its business across Europe. The Allianz-owned robo-advisor offers a wide variety of portfolios, each one presenting a different level of risk so that the investments it makes will align as closely as possible with the user’s own investing style. For those who want a human element, the firm has investment advisors standing by to field questions and hear ideas.
Tickeron – Founded in 2013, Tickeron has integrated several diverse functionalities to create what it calls a financial super-community, which is centered around its AI-powered trade generation tools. The platform generates advice based on a diverse range of criteria, including investment style, goals, age and preferred asset classes. In addition, users can learn their Diversification Score, which puts a number on the level of risk in a given portfolio, as well as buy and sell their own investing strategies, subscribe to newsletters, reports and analysis and more.
WealthSimple – Founded in Toronto in 2014 and the latest robo-advisor to reach unicorn status, WealthSimple has delivered automated investment advice to thousands of investors around the world, inviting users to ‘Get Rich Slow.’ New investors can be starry-eyed, with an attraction to get-rich-quick strategies that usually fall short of expectations. WealthSimple encourages its users to focus on long-term results, emphasizing how a sound strategy can yield years of steady growth. The firm leverages Xignite data to power WealthSimple Trade, a mobile app that enables Canadians to buy and sell thousands of Canadian and US-listed stocks and ETFs without paying any trading commissions.
Personal Capital Case Study
Learn how the leading robo-advisor uses Xignite market data APIs to power its digital wealth platform.