The man behind Bloomberg's ill-fated foray into wealth management is back. John Michel found himself out on the street in July 2013, when Bloomberg pulled the plug on its fledgling online wealth management platform, BloombergBlack.
Having served as president of Bloomberg Wealth and been responsible for getting the platform up and running, the former Army captain was caught by surprise, as BloombergBlack had amassed $1.5 billion in assets and hundreds of paying customers during the first four months of its trial.
Today, Mr. Michel is taking the wraps off of CircleBlack, an online account aggregator and wealth management platform that will pick up where its predecessor left off.
Like BloombergBlack, CircleBlack is aimed at individual investors. But, unlike Bloomberg's platform, CircleBlack will also serve financial advisers.
In fact, CircleBlack, which Mr. Michel is mostly paying for himself, has just signed Lebenthal Wealth Advisors as one of its first big customers from the advisory world.
For Lebenthal, the appeal is obvious.
“The technology to aggregate data for multiple custodians and to assist us in delivering data to the end client on mobile devices is what we needed,” Andy Grillo, president and chief operating officer of Lebenthal Wealth Advisors, said of CircleBlack.
Mr. Michel, who is the firm's chief executive, won't disclose the startup's costs except to say it is privately funded and that “a fair amount of it comes out of my pocket.”
A pricing structure for CircleBlack is still in the works. But Mr. Michel is targeting a range of $10 to $30 per month for retail customers who use the platform as a secure account-aggregation and investment management application on both desktop computers and mobile devices.
Pricing for advisers will be established during the beta phase, and Mr. Michel expects that some advisers will offer CircleBlack to their clients free.
“Advisers want to keep that next generation,” he said. “They talk about it all the time. So you give the clients the app, and it's something they can give to their kids, who see value in it. You've now connected the brand, not very strongly, but you start to get the connection. And by the way, that kid no longer sees you as just the person who sits in a wood-paneled office, but says, "Oh, they're pretty cool with technology.'”
Headquartered in Princeton, N.J., with an office in Jersey City, N.J., CircleBlack employs 20 staff and consultants.
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Mr. Michel faces big challenges in introducing yet another digital platform into the increasingly crowded category of online account aggregation and investment management.
For example, Scivantage earlier this year launched Sqope, a data-mining and crowdsourced analytics tool for retail consumers that also is sold to brokerages, with advisers granted access by their firms.
And online offering Wealth Access provides reporting and aggregation that let advisers tap into 20,000 data feeds from financial institutions for a complete view of their wealthy clients' assets and liabilities.
The risks involved in a self-funded startup are high, according to Chris Costello, co-founder of Blooom.com, whose founders have spent $450,000 out of pocket to launch a robo-adviser for 401(k) retirement plan participants.
Mr. Costello said Blooom, a “Best in Show” winner at the FinovateFall 2014 financial technology conference, may get additional funding from venture capitalists to extend its reach to millions of users.
But he conceded there's also a realistic possibility that Blooom will fail — just as other startups might, including CircleBlack.
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Mr. Costello compared the spate of robo startups to the automotive industry of the early 1900s and the computer industry of the 1980s, when a proliferation of early players closed or were acquired as a few leaders eventually took over.
“You get a lot of players early on, and then a lot of them fall by the wayside and the strong companies survive,” he said.
Mr. Michel, a 1980 graduate of the U.S. Military Academy, brings a true entrepreneurial spirit to CircleBlack, according to longtime friend and colleague Martin Beaulieu, a BlackRock Inc. managing director. He is now global head of client and sales excellence, following a stint as co-head of the firm's U.S. iShares retail business.
Their paths first crossed as the retirement preparedness business was picking up in the early 1990s, when Mr. Beaulieu was with MFS Investment Management and Mr. Michel was at Merrill Lynch & Co. Inc.
Even then, Mr. Beaulieu said, he spotted his friend's independent mindset.
“In 1975, when he was applying for West Point, the U.S. didn't even have a draft, and many Americans were taking an anti-military view,” Mr. Beaulieu said. “John went the opposite way. That characteristic of going against what's popular and doing what he feels is right says a lot about him.”
