State Street Global Advisors (SSGA) announced that it made an equity investment in Ethic, the developer of a technology-driven asset management platform that provides personalized, values-aligned and tax-smart investing services for financial intermediaries. The announcement said SSGA led Ethic’s recent $64 million Series D funding round.
Other investors in New York City-based Ethic, which also serves as an RIA, include Fidelity and UBS, Ethic said.
The State Street asset management division and Ethic also said they entered into a strategic partnership to deliver customized investment solutions at scale to SSGA’s institutional and financial intermediary clients.
The State Street-Ethic partnership includes the creation and management of customized separately managed accounts (SMAs), model portfolios and unified managed accounts (UMAs), the firms said.
The scalable platform will enable “intermediaries to create highly customized portfolios that seek to align with clients’ individual preferences, goals, and values,” according to a press release. The partnership will also include a technology-driven advisor and client experience that will include unique proposal generation, portfolio transition plans and reporting.
“This new partnership underscores our broader commitment to meeting the growing demand for customized portfolios,” according to Yie-Hsin Hung, CEO of State Street Global Advisors.
“Ethic has seen incredible growth in a short period thanks to industry-leading technology and deep expertise that help advisors deliver portfolios that reflect what matters most to clients,” said Hung. “Ethic’s platform has become a standard-bearer for customization, and we’re excited to help them reach new audiences.”
State Street said the shift toward personalization is “reshaping the financial services industry, with investors increasingly expecting portfolios tailored to their individual values, risk tolerance, and tax situation.”
That trend was underscored in a recent SSGA study in which State Street revealed almost two-thirds of U.S. investors desired more personalized advice, while 85% of advisors believed tax personalization enhanced a portfolio’s value proposition.
SSGA said it partnered with Ethic to “meet this growing need” and “provide a seamless, technology-driven solution, enabling financial intermediaries to construct personalized portfolios at scale.”
“We see our role as empowering intermediaries to help their clients invest in the future that they want to see,” said Doug Scott, CEO and Co-Founder of Ethic.
“With this new funding round and strategic partnership, we’re excited to be accelerating the adoption of personalized, values-aligned, and tax-smart investing,” according to Scott.
SSGA managed $4.72 trillion in assets as of Dec. 31, it said. That included $1.6 trillion in ETF AUM, according to the company.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
