Reasons for asset managers to implement robo advisor software

The disruptive changes introduced by FinTech companies bring threats but also show where the opportunities can be found. With the advent of automated wealth management solutions, the traditional wealth management industry is facing perhaps its most disruptive threat since low-cost online stock trading in the mid 1990s.

Most wealth management companies now have a prime opportunity to apply robo-advisory technology to respond on time to the growing expectations of existing and future investors (the Millennials) and to stay more cost-efficient and profitable even in lower fees environment.

Main reasons to implement robo-advisory platform:

  • To broaden the market for clients whose assets are below the minimum requirement now by traditional advising. Robo-advisors can offer the investors regular access to financial tools that have been reserved for high net worth investors. Automated advisory platforms allow the advisory firms to scale up operations and serve more clients of every size and type.
  • To stay profitable in the lower fees environment. Automated advisory platforms allow advisory firms to remain profitable and be significantly more cost-efficient in their advice delivery and execution even if fees decline. Low fees are an undeniable advantage in the eye of the customer. Many investors are ready to opt out of human advisors in exchange for lower costs and access to advanced services offered only for wealthier customers so far.
  • To work with Millennial Investors – a largely untapped source of assets. Digital advice attracts millennial generations of customers in a natural way. Millennials have two major characteristics: they are both accustomed to the online life, and usually do not have sufficient knowledge about investing. According to Accenture, almost 40% of Millennials are interested in robo-advice and their predisposition is to “do-it-yourself-through-an-app”.
  • To address growing expectations on the level of the service. Providing the investors with real time information on their assets in an engaging way saves time and is more convenient to them.
  • To attract investors by providing user portfolios aligned with their life goals instead of products of the advisor. Robo-advisory platforms give the visualization of balance projection and show the investor dependencies between the answers from the on-boarding questionnaire, risk profile, proposed investment strategy and long term financial goals.
  • To benefit as a manager from behavioural analysis of customer activities in the system to help them get a better deal with emotional aspects of investing.
  • To aim for transparency, especially when presenting the robo-advisor’s pricing, product and process information.

See our Robo Advisor Software:

See our Robo Advisor Software

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