Citizens looks to gain on superregionals with robo adviser launch

Nearly a year after announcing plans to offer a robo adviser, Citizens Financial said Wednesday that it has launched the product on a large scale.

The service, known as SpeciFi, marks the first move toward serving its so-called mass affluent customers, who are broadly considered well-off but not quite highly affluent.

Citizens first released the robo service through its online banking platform in late July, through what the company describes as a “friend-and-family” launch. By the end of this week, customers in about half of its 11-state footprint will have access. All customers will have access by the end of September.

In the year ahead, Citizens plans to continue building out the SpeciFi brand, as it looks to deter younger customers, in particular, from opening accounts with fintech investment firms.

“We think our SpeciFi advisory platform will be the beginning,” John Bahnken, president of wealth management at the Providence, R.I., company, said in an interview ahead of the launch. “SpeciFi could move in a lot of different directions for digital advice.”

In the coming months, Citizens may use its own algorithms and other data-driven techniques to manage customer assets. The product currently uses asset allocations provided by SigFig, the San Francisco-based startup with which Citizens partnered to build its robo offering.

Citizens may also launch SpeciFi as a stand-alone app, Bahnken said.

The launch comes as several big banks have made moves to roll out their own versions of a robo adviser. Bank of America said last year that it will build its own robo platform.

Other big banks, such as UBS, U.S. Bank and Wells Fargo, meanwhile, said they would partner with fintech firms, such as SigFig and FutureAdvisor.

In announcing its launch, Citizens gave a nudge to its regional-bank peers, which have been slower to cater to the demands from high-earning millennials, in particular, for digital investment advice.

“We’re trying to build highly competitive, next-generation wealth management platform,” Bahnken said. “We want to be one of the best in the superregionals, and have lots of plans underway for what form that takes.”

Through SpeciFi, Citizens customers will have access to two services: a free investment checkup that, with authorization, aggregates customers’ various broker-dealer accounts; and a fee-based asset management service.

Customers who sign up for the asset management service will be charged an annual fee of 50 basis points, though the $151 billion-asset company is offering a promotional rate for those who sign up before the end of the year. A minimum initial investment of $5,000 is required.

Additionally, SpeciFi customers will also have the option to contact a team of Citizens advisers, based in Phoenix, to chat online or by phone. Factors such as risk tolerance and financial goals, meanwhile, will be assessed through a short, online questionnaire.

Bahnken declined to provide an exact target for the net worth of the clients Citizens hopes to reach through its SpeciFi launch, though he said the service will likely appeal to those with investable assets of between $50,000 and $500,000.

He added that the ease of using the digital service will likely be a hook for younger customers — and, perhaps, for older, tech-focused investors.

“SpeciFi is really an innovative way of bringing new investors, novice investors, to investing,” Bahnken said.