When Jemstep launched in 2008, it was one of the very first platforms designed exclusively to help advisors give professional advice to their clients online. Roughly eight years later, “robo-advisors” are all the rage and online investment advice has largely supplanted doing things the old-fashioned way. In response, startups like Jemstep are being gobbled up by more-established firms with bigger distribution footprints.
Invesco and Jemstep
Case in point: Invesco, the $800 billion independent global investment firm, announced on January 12 that it had acquired Jemstep. Terms of the deal weren’t disclosed, but the tie-up will allow Invesco’s leading sales and service teams of more than 300 to work with home offices and advisors in the U.S. through Jemstep’s platform.
“As we continually look to enhance our partnerships with advisors, we recognize that digital solutions can expand their options for meeting client needs,” said Invesco CEO Flanagan, in a recent statement. “Jemstep’s proven platform enhances our ability to help advisors grow their business and by seeking to deliver superior client experiences in a rapidly evolving market environment.”
Although InvestmentNews refers to Jemstep as a “robo-advisor,” Barron’s points out that the firm’s objective is actually quite a bit different. Jemstep doesn’t provide automated advice – it allows advisors to customize asset allocations through a mix of index-tracking ETFs, actively managed mutual funds, and more. Jemstep president Simon Roy said his firm’s objective has always been to help advisors differentiate their offerings and maintain their competitiveness. “This includes helping them grow their business by gaining access to new markets or expanding access to current ones while also helping them meet their clients’ needs,” he said.
Unique Combination of Offerings
“The Invesco-Jemstep combination is unique in that it will unite world-class investment management capabilities, Silicon Valley technology, and expert human advice to deliver a comprehensive digital solution,” said Peter Intraligi, Head of Distribution for North America at Invesco. “We will deploy our industry-leading home office and field sales support in the US to ensure that advisors realize the value of incorporating a digital solution into their practices.”
What is clearly seen with this deal, along with others, is that robo-advisors are not stand-along business. They are evolving to become a piece of an overall service offering that advisors can use to flexibly manage their businesses and offer clients different service approaches based on their needs.
Jason Seagraves contributed to this article.