Wall Street is in a 'robo-up or get left behind' world

Legg Mason has joined the club.

The fund manager announced on Thursday, July 7, that that it will be acquiring an 82% majority stake in robo advisor Financial Guard.

In doing so, it has become the latest in a long line of Wall Street firms acquiring or building up innovative robo capabilities.

Financial Guard is an online wealth management platform that offers clients customised investment advice that pulls from both passive and active strategies. The robo advisor will operate as part of Legg Mason’s alternative distribution strategies business and will open up another avenue of distribution for the firm’s affiliates.

The deal is part of Legg Mason’s long term strategy to package more products and provide more holistic solutions for customers, according to Barclays analysts, who said firms were responding to a “robo-up or get left behind” environment.

With UBS wealth management’s partnership with SigFig, Blackrock’s acquisition of FutureAdvisor, and Invesco’s acquisition of Jemstep, Legg Mason is following suit and getting ready for the future.

“While the motivations are different and the way they are being utilised varies across our coverage, we believe it ultimately boils down to companies seeing this technology as part of the future and making investments now so that they don’t get left behind,” the Barclays analysts said.

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