More than a dozen robo-advisor firms now operate in Canada. As a result, some of these financial technology (fintech) startups are focusing on specific areas of expertise in an effort to differentiate themselves in what’s quickly becoming a crowded marketplace.

Case in point: Toronto-based Smart Money Capital Management Inc., Vancouver-based WealthBar Financial Services Inc. and Toronto-based Justwealth Financial Inc. are turning their attention toward particular niche markets – from business-to-business (B2B) platforms to specific demographics.

Smart Money, for example, has decided to focus exclusively on the B2B market, a fact emphasized by its recently announced partnership with Burlington, Ont.-based Mandeville Private Client Inc., a traditional financial advisory company. The robo-advisor’s decision to focus on B2B partnerships was driven largely by the high cost and increasing competitiveness of the direct-to-consumer (DTC) market.

“Client acquisition cost was only going one way, and that was up,” says Nauvzer Babul, CEO and founder of Smart Money. “And so, for me, working with these partners just seemed like a better fit for us rather than competing with them.”

Currently, roughly half of Smart Money’s client base comes from such partnerships while the other half consists of individuals who became Smart Money clients directly. At the moment, clients referred by financial advisors are managed solely by Smart Money – although the advisor may choose to remain in contact with the client to discuss financial planning needs beyond investments. Smart Money has plans to launch a white-label platform next year that will allow traditional firms to license Smart Money’s technology and keep their clients’ assets in-house.

Although the decision to focus on the B2B market rather than DTC may prove cost-effective for Smart Money, the B2B market is not without its challenges. Namely, Babul notes, establishing trust with advisors can take time.

“The way robo-advice has traditionally been pegged in the marketplace is as a competitor to advisors,” he says.

As a result, even though Smart Money works with individual advisors, the firm generally seeks to build a relationship with an entire firm because doing so can help bridge the gap between the fintech and advisors.

“The first challenge is working with the company so that its advisors realize we’re not there to compete with them,” says Babul. “We’re actually there to complement their businesses.”

Smart Money has competition in the B2B market. Toronto-based Glidepath Portfolio Services Inc. works exclusively with financial planners. As well, Nest Wealth Asset Management Inc., Wealthsimple Inc., both based in Toronto, and WealthBar all have B2B platforms available to advisors.

Furthermore, Nest Wealth and WealthBar have announced partnerships with Montreal-based National Bank of Canada and the Toronto-based insurance distribution firm PPI, respectively.

WealthBar, in addition to growing its B2B platform, hopes to expand its DTC platform by zeroing in on Canadians approaching retirement, says Tea Nicola, the firm’s CEO and co-founder: “We have a very unique value proposition for those in retirement transition.”

For example, Nicola points to the robo-advisor’s financial planning offering – which includes: retirement income planning; access to Vancouver-based Nicola Wealth Management Ltd.’s private pools (Nicola Wealth owns a stake in WealthBar); and a price point of 0.35%-0.6% – as reasons why WealthBar is well positioned to work with investors who are in – or will soon be making the transition into – retirement.

This emphasis on retirement planning is a natural step for the three-year old firm, which has focused consistently on full financial planning for its clients in addition to investment planning.

“We don’t have to change much. We’ve already been doing these plans for this client segment from the get-go,” says Nicola. “We’re now just telling people that we can do this and making a little bit more of a splash [about it].”

WealthBar currently has just less than $200 million in assets under management (AUM) and serves roughly 2,000 clients.

Justwealth is another roboadvisor firm that has become more focused on serving the needs of a specific demographic.

“Gen Xers are the biggest segment that we’re serving and also our fastest-growing,” says Andrew Kirkland, president and co-founder of Justwealth.

Specifically, about 43% of Justwealth’s clients fall within the Gen X demographic (individuals who were born between 1966 and 1980) while 41% of its AUM belongs to clients in that same age group.

This growth was by design, as Kirkland and James Gauthier, Justwealth’s chief investment officer, began to build out the fintech’s services.

“We were targeting people who were in their late 30s, early 40s, and maybe had begun to build some kind of nest egg,” says Kirkland. “So, when we looked at developing our portfolio lineup, we took that into consideration.”

To that end, in addition to crafting specific portfolios for registered and non-registered accounts, Justwealth also offers its clients a target-date portfolio suitable for registered education savings plans.

“We’re able to target to the exact year that a beneficiary is going to be enrolling in [post- secondary] school,” says Kirkland. “So, someone in that age range – late 30s, early 40s, mid-40s – would be somebody who would be most likely utilizing a service like this [for their children].”

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