Ally Financial is 'looking closely' at adding human wealth advice for its digital bank's richer customers
- Ally Financial is exploring new financial-planning offerings to attract its mass-affluent customers onto its Ally Invest platform, Diane Morais, president of consumer and commercial banking products at Ally Bank, told Business Insider.
- "We're looking pretty closely right now at more hybrid advice," Morais said.
- Ally Invest, which has robo and self-directed investing options, was rebranded after Ally's acquisition of brokerage TradeKing in 2016.
- Morais did not give any specific timeline for the plans, or suggest whether it would internally build out the product or look to partner with another player, but said the bank was focusing on it for 2020.
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Ally Financial is looking at rolling out a new financial-planning offering to lure its deep-pocketed bank customers onto its investing platform.
Diane Morais, president of consumer and commercial banking products at Ally Bank, told Business Insider the firm is evaluating how it could roll out financial advice that would be aimed mass-affluent customers.
"We're looking pretty closely right now at more hybrid advice," Morais said. "We have the 'Do it for me' or 'I'll do it myself',' so managed portfolios or robo and pure self-directed. What we don't have is any kind of human touch for people who may be on the higher end of the affluence scale who need more complex advice."
Ally Financial maintains a wide suite of offerings, including everything from mortgage loans to auto insurance. Ally Bank, the digital-only banking arm of the firm, has $103.7 billion in deposits, according to its fourth-quarter earnings report.
Meanwhile, Ally Invest, the investing arm of Ally Financial that was re-branded after the 2016 acquisition of brokerage TradeKing, has $17 billion in deposits.
"How do we serve customers within the Ally family today?" Morais said. "I think the broader backdrop for Ally is Ally Invest is small in the scheme of the broad company."
Cross-selling some type of financial-planning product to customers of Ally Bank could help strengthen Ally Invest's numbers. Morais didn't drill into specific demographics of the customers the offering would be geared towards, but said typically the bank thinks of mass affluent as those with assets above roughly $250,000.
In addition to attracting more customers over to Ally Invest from the bank, Morais said it's about filling gaps in Ally Financial's set of products where there is customer demand.
"There's the people that self-direct. They're in it, and they are managing individual stocks, ETFs, mutual funds. People that kind of graduated and use a managed portfolio as an extension of their savings strategy, essentially. And then there's the folks that it gets slightly more complex in terms of life events or whatnot that could use help with advice and financial planning," said Anand Talwar, a deposits and consumer strategy executive for Ally Bank.
Ally doesn't have the capabilities to offer more personalized financial advice as it stands now, Morais said. As a result, she added, the company would need to do one of three things: build, partner, or buy.
"We don't believe we have to do everything ourselves," Ally's head of strategy Dinesh Chopra told Business Insider in December. "The world is moving towards growth through partnerships."
In April last year, Ally partnered with buzzy mortgage startup Better.com to offer a fully digital mortgage product, meaning Ally's customers can apply, receive, and pay down a mortgage on the bank's website. Ally's venture arm also contributed a $20 million add on to Better.com's Series C.
And in addition to TradeKing, Ally bought a healthcare focused point-of-sale lender Health Credit Services (HCS) last October.
HCS will be rebranded as Ally Lending, and the bank will look to grow the existing book of loans issued through merchants at the point of sale.
Before Ally's acquisition, HCS loans were primarily issued at doctors' offices, but Ally is looking to diversify. It's considering other use cases for point-of-sale lending, like auto loans at car dealerships to financing at the vet.
"We're looking to diversify and do some piloting," said Morais.
Specific to offering something for mass-affluent customers, Morais declined to give a timeline beyond saying it was something the firm was looking at for 2020.
"We are constantly scanning the horizon to say do we build, partner, buy based on what do our customers asking for and can we deliver whatever that product or service is in accordance with what we think generates the right kind of financial- and risk-based returns," Morais said. "So we are open."
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