BlackRock Signaled a Trend. Did Invesco Affirm It?

The day after BlackRock expanded the availability of its model portfolios, Invesco made an announcement of its own.

(Photo by Matt Staver/Bloomberg)

(Photo by Matt Staver/Bloomberg)

BlackRock revealed Tuesday that its model portfolios were now available on a platform that financial advisors use to build their own, a signal that asset managers are creeping further into wealth management.

Another sign of that trend followed the next day, when a BlackRock rival made an announcement of its own.

Invesco said Wednesday it had purchased RedBlack, a portfolio rebalancing and trading technology company with more than 150 clients and $350 billion assets on its platform. Details of the sale were not disclosed.

In a statement about the acquisition, the asset manager with $1.2 trillion said it “recognizes the critical role technology plays for advisors today and it is one of the reasons why it has been growing its global digital wealth capabilities.”

Add RedBlack to the list of Invesco’s tools that advisors can use to “develop their business, while maintaining an independent, open architecture,” the company said. In 2016, Invesco acquired Jemstep, an advisor platform used by insurers, banks, broker-dealers, and RIAs. Last year it bought Intelliflo, a similar company in the U.K. All of Invesco’s advisor services “have been, and continue to be, open architecture from both a technical and an investment product standpoint,” a spokesperson told RIA Intel.

Invesco’s latest announcement on the heels of BlackRock’s was probably a coincidence (the deal was almost certainly in motion before Tuesday). Invesco declined to comment on the vicinity of the two.

But it was nonetheless timely. One more partnership like BlackRock’s, or another deal like Invesco’s, and a trend predicted for the wealth management industry will be a reality.

Asset managers are seeking ways to serve and connect with more financial advisors. Integrating themselves into advisors’ workflow is an effective way to do that, whether it be helping them with allocations, tax management or something else.

Scott Smith, the director of Advice Relationships at Cerulli Associates, called model portfolios “the next big opportunity for asset managers” in August.

“If fund companies are able to follow this lead and partner with (or acquire) these tools, it allows them to provide a much more tailored and captive delivery service for the underlying assets within their funds,” Scott Lamont, a wealth management technology strategist at F2 Strategy, said Tuesday about BlackRock’s partnership.