Head of Robo Fiasco Takes Another Whack
The lights at BloombergBlack are still off, but that doesn’t mean the concept is dead. The former head of the media conglomerate’s failed foray into wealth management, John Michel, tells InvestmentNews he’s starting a new venture.
His fledgling online service, CircleBlack aims to provide much the same in account aggregation and portfolio management as BloombergBlack did — or proposed to do. Bloomberg let Michel go after the robo-advisor site was shuttered in July 2013, just months after its unveiling.
Despite its quick demise, Michel tells InvestmentNews, BloombergBlack attracted $1.5 billion in assets. This time out, he’s reaching out to mass-affluent clients, and he’s targeting financial advisors as well as individual investors. He sees the institutional version of CircleBlack appealing to advisors who want a “robo” offering for the younger, less moneyed relatives of valued clients.
CircleBlack says it has already signed New York-based wealth manager Lebenthal Wealth Advisors. Lebenthal president, Andy Grillo, tells InvestmentNews the robo provider’s successful development of a mobile app for its technology played a role in his firm’s decision.
But funding might be a sore spot for CircleBlack. The article has Michel saying he is meeting most of the start-up’s expenses — which he didn’t specify — with his own money. He adds he has two offices and a staff of 20 on his payroll.
During its brief tenure, BloombergBlack was criticized for charging mass-affluent investors $100 a month. This time out, Michel hopes to keep prices between $10 and $30 a month for individual investors, according to InvestmentNews. He tells the newspaper the new company’s pricing for advisors is still being worked out. Perhaps Lebenthal got a deal for early adoption.