TOP trends and challenges in wealth management

Robo-Advice is not about tomorrow anymore. It’s about today.
A robo advisor (robo-adviser) is an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners. Robo-advisors are typically low-cost, have low account minimums, and attract younger investors who are more comfortable doing things online.
The idea made sense to many, and robo-advisors quickly gained market traction. Full-service, high-value-added, person-to-person activity isn’t for everybody. There’s generations of tomorrow’s investors coming up today who are more attracted to something less person-to-person and more technologically enabled.

The rapid rise of Robo-Advisors
Robo-Advice is changing the landscape of global wealth management. Historically, investment management was the purview of the wealthy. With robo-advisors flooding the investment markets offering low-fee, diversified professional management, the investing landscape is evolving.

The number of robo-advisors is growing rapidly. New consumer brands are emerging in the digital wealth management industry such as Betterment, Wealthfront and Personal Capital.

In its report BI Intelligence forecasts that robo-advisors will manage around $8 trillion of total global assets under management (AUM) by 2020.

forecast-global-aum

TOP trends and challenges in wealth management for next years

  1. Robo-advisors disrupt the wealth management industry. In the near future, advisors who wait for transition into robo-advisor will lose. Investors will migrate towards those lower-fee providers with technology platforms.
  2. We observe the strong influence of technology on the entire investing environment. Many investors trust technology and expect 24/7 access and reporting.
  3. The competition increase rapidly. New consumer brands of pure robo-advisors appear in the digital wealth management industry, while traditional financial advisors go robo as well.
  4. New regulations are directly impacting the financial advisory industry and driving companies to offer robo services as a way to meet the requirements.
  5. Investors increase pressure to lower fees. Robo-Advisors serve a wider range of customers and allow to stay profitable in lower fees environment.
  6. Artificial Intelligence enters the robo-advisory industry and could be the strongest competitive advantage. Robo-Advisors soon will offer more diversified investment products.

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