A new study predicts that robo advisor platform will hit $25 billion in revenue in four years. What is driving the demand?
Robo advisors will make investments more compelling to high net worth individuals as well as those with lower income, a study compiled by Juniper Research said.
Automated advisors are broadening the appeal in wealth management, with their delivery method via smartphone apps making the investment process convenient and offering a compelling reason for millennials to invest, Juniper said.
This will drive total assets under management by robo advisors upwards twelvefold, to $4.1 trillion in 2022, from an estimated $330 billion in 2017, the study claims.
Profits Bolstered
While new entrants are disrupting the market, traditional wealth managers are also adopting new technologies to hone their business models.
The study found that the appeal of these technologies is clear to established players: automated systems, even in a limited role, will generate significant spending cuts, bolstering profitability as a result.
Major wealth managers such as UBS have tried to adopt robo technology; the Swiss bank offers British retail clients robo advisor «Smartwealth» - a departure for a bank which primarily focuses on wealthy clientele.
Jobs To Evaporate
Fellow Swiss wealth manager Credit Suisse is also building its robo offering and ramped up its fintech expertise in Asia by taking a 10 percent stake in Canopy, a Singaporean data aggregation platform for the wealthy.
The fallout from the broader use of automation in wealth management could have a severe human cost: thousands of industry jobs are at risk through the growing use of artificial intelligence and other technology, according to Juniper.
