16 Jun Robo Advisers – Expanding Beyond Millennials
It’s no secret, robo-advisers are on the rise. A robo-adviser is an online wealth management service that provides automated, algorithm-based portfolio management, often at less than half the fees of traditional brokerage services. These newer services are expected to manage as much as $2.2 trillion by 2020, according to consulting firm A.T. Kearney.
So far in 2016, over $200 million in funding has made its way to robo advice platforms. The DoL’s recent fiduciary rule may also provide new prospects for digital advice platforms.
Millennials and small investors are not the only ones using robo-advisers. As much as half of assets under management at one major robo firm come from clients with more than $100,000 at the firm. Additionally, 47% of high net worth (HNW) investors under 45 would consider opening a robo account in the future. As robos grow, they will become a tool for clients of all types.
With more to invest, HNW clients are more readily engaging in digital advice platforms. However, HNW clients in the U.S. have been slower to adapt to the newer robo technology compared to their international counterparts. The data above was called from a recent article, you can read more about robo trends here and here.