JPMorgan Is Said to Have Explored Buying Robo Adviser in 2015By
Dimon has been vocal about ramping up technology at the bank
SigFig wanted to partner rather than sell to one firm
JPMorgan Chase & Co., which is building an automated investment service for its wealth-management division, previously looked at buying one instead.
The largest U.S. bank explored acquiring robo-adviser SigFig Wealth Management LLC in 2015 to speed up its technology push, people briefed on the talks said. The conversations took place before SigFig agreed to a partnership with UBS Group AG’s Americas wealth-management business in 2016.
As fintech startups gained popularity after the 2008 crisis, banks have wrestled with whether to compete with or team up with them. SigFig’s preference for striking partnerships was one reason a sale to JPMorgan never developed, said the people, who asked not to be identified because the talks were never made public.
JPMorgan spokesman Darin Oduyoye said no formal discussions ever took place. SigFig CEO Mike Sha said his firm isn’t looking to be acquired.
SigFig hasn’t disclosed a valuation. Investors include UBS, Bain Capital Ventures and Union Square Ventures, among others, with funding rounds totaling almost $70 million, according to startup-tracker Crunchbase.
JPMorgan is now building a digital wealth offering of its own internally. CEO Jamie Dimon said in his annual letter that later this year the firm plans to roll out “online vehicles for both individual retirement and non-retirement accounts, providing easy-to-use (and inexpensive) automated advice, as well as enabling our customers to buy and sell stocks and bonds, etc.”
Robos have continued to draw interest from Wall Street incumbents eager to keep a lid on costs, invest in startups or experiment with new technologies. Citi Ventures, part of Citigroup Inc., has previously backed Betterment while Goldman Sachs Group Inc. acquired Honest Dollar, a startup that offers retirement services to workers without access to employer-based plans.