Former iShares product head Allan Lane is aiming to tap into the recent tread of wealth managers launching passive model portfolio suites, with his new fintech venture, Algo-Chain.
The white labelled offering will enable wealth managers to create their own bespoke model portfolios of exchange-traded funds (ETF).
Lane (pictured) told Wealth Manager that firms using the service will be able to tailor the ETFs to match their own investment style and criteria.
The model portfolios will be run using machine learning and factor-based investment technology developed by Twenty20 Investments, a firm Lane set up with fellow BlackRock iShares alumnus Irene Bauer (pictured), who is also a founding partner of Algo-Chain.
‘We can actually make the portfolios to measure,’ said Lane.
Wealth managers also have the option to buy the underlying technology used to create and run the portfolios.
‘We turn out the model portfolios built specifically for them, whereas other firms want a little bit of software so they can actually embed it into their own process,’ Lane said.
He added that Algo-Chain will send the wealth managers the funds’ underlying holdings data.
The charges for the services will be case dependent, with some carrying an ongoing basis point charge while the underlying technology will require a single one-off payment.
Lane added that at some point in the future he would like to incorporate active funds into the proposition, but in the current environment, he believes there is much greater demand for passive products.
Twenty20 teamed up with Parmenion Capital Partners to target smaller clients with a robo-adviser service back in 2016.