Robots the future for managed trading accounts? VC which invested $44 million thinks so

Perhaps those ubiquitous MAM accounts which proliferated the retail FX business via MetaTrader platforms ten years ago during the dawn of introducing brokers were avantgarde after all.

Back in the early part of the 2010s, many retail FX brokerages rushed to provide newly recruited introducers of business with multi-account management terminals via the MetaTrader 4 platform, which would subsequently be operated via Expert Advisors (EAs), which were trading robots made by private individuals and retail FX introducing brokers who managed the trading of accounts on behalf of their clients.

At the time, nobody really considered the value of such a simple yet effective method in which many accounts could be traded by one individual who often automated the trading via a robot.

Then came social trading, which was a method by which signals were provided to retail traders from ‘lead traders’, the idea being that less experienced traders would follow the ‘lead’ of those more experienced, and extend the length of time a less experienced trader would spend on a trading platform. These have almost all died a death now, leaving the role of providing quality signals to automated actionable content providers and charting software firms.

Now, the traditional wealth management sector is going down this route and embracing aspects of all three areas pioneered by the FX industry, and large venture capital is being doled out. After closing a $44 million funding round, British AI-based personal finance chatbot Cleo is turning the tables on its users and asking them how it should spend its money.

EQT Ventures led the round, with participation from existing investors, including Balderton Capital, LocalGlobe and SBI.

Launched in 2016, London-based Cleo integrates with users’ bank accounts and then uses AI to analyse spending habits and transaction histories to help with money management. The company has attracted a strong following among Gen Z with its conversational style, epitomised by a “roast mode”.

It would be quite easy to guess what the regulators would make of an FX EA, MAM or signal provider that would use that kind of terminology, but clearly it is ok if a firm positions itself as a ‘FinTech’…

Cleo now claims four million registered users, the vast majority of which are in the US, where some of the new funding will be used to make executive and product team hires in San Francisco, according to TechCrunch.

Now, with a healthy bank balance, the company is also asking users for ideas on how it can “help you get your money right”. Among the possibilities it floats in a blog is a “proper bank account”, which would mark a significant change of direction.