BlackRock Inc BLK is reportedly selling its robo-advisory company FutureAdvisor to Ritholtz Wealth Management.

What Happened: FutureAdvisor informed retail clients that the New York-based Ritholtz will acquire it, reported Insider, citing an email sent to clients.

Ritholtz confirmed the companys acquisition but did not disclose the details of the deal, according to the report.

After careful consideration, we have decided to discontinue our direct-to-retail investment advisory business and plan to transition the Retail Business to Ritholtz Wealth Management, said FutureAdvisor in the email, reported Insider.

See Also: Best Robo Advisors For Investing In 2023

Why It Matters: FutureAdvisor was purchased by BlackRock in 2015 and at the time the company said that the robo-advisor would operate as a business within BlackRock Solutions, the companys investment and risk management platform.

High cost of attracting new customers and slim profit margins which plague the automated financial advice segment also affected FutureAdvisor, said David Goldstone, manager of investment research at Condor Capital Wealth Management, reported Insider.

FutureAdvisor had $1.7 billion in client assets and served 30,600 clients, noted Insider citing a regulatory filing dating to April 2022.

BlackRock will reportedly continue serving wealth management clients through the Aladdin wealth technology products.

Price Action: On Tuesday, BlackRock shares closed 1% higher at $689.70 in the regular session and were largely unchanged in the after-hours trading, according to Benzinga Pro data.

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