BlackRock buys digital wealth manager FutureAdvisor

US asset managing giant BlackRock (NYSE:BLK) said it agreed to acquire FutureAdvisor, which manages clients' investments based on computer algorithms. Terms of the deal were not disclosed.

San Francisco-based FutureAdvisor will operate as a business within BlackRock's investment and risk management platform, BlackRock Solutions (BRS). It will provide financial institutions including banks, insurers, large and small broker-dealers, and other advisory firms with technology-enabled advice capabilities.

BlackRock noted that the financial impact of the transaction is not material. The deal is expected to settle in the fourth quarter of 2015, subject to customary closing conditions.

"As demand for digital wealth management grows, we believe that our combined offering will accelerate our partner firms' abilities to serve the mass affluent in a convenient, scalable way," said Tom Fortin, Head of Retail Technology for BlackRock.

"The acquisition of FutureAdvisor is an extension of BRS' mission to help clients solve their most complex investment challenges through technology," said Robert Goldstein, chief operating officer and global head of BRS.

The online financial advisory firm had raised more than $20m in venture funding from Silicon Valley investors including Canvas and Sequoia Capital. The company competes with the so-called robo-advisors including Betterment and Wealthfront. FutureAdvisor currently manages $600m in assets compared with more than $2bn each by Betterment and Wealthfront.