Robo-Advisors - Complex Algorithms and AI are Proving Popular in Wealth Management

  • ID: 4417312
  • Report
  • 14 pages
  • MarketLine
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Robo-Advisors - Complex algorithms and AI are proving popular in wealth management

Summary

Robo-advisors are a new category of financial service product that can offer some unique benefits to those interested in wealth management services. From start-ups to the biggest incumbent players, most institutions in the wealth management industry have their own services. Companies offering these products are capturing the desire for cheaper monthly rates, advice more heavily based on mathematics and fully impartial advice. Essentially what these companies are trying to provide or what is the long term aim of this type of product, is an AI wealth management service and the robo-advisor market today is a kind of halfway house between a traditional human advisor and what will eventually be the norm, when full AI tools role out in the future.

Scope
  • Learn what a robo-advisor is and what it does.
  • See the way robo-advisors are being offered and sold as products in the wealth management system.
  • Examine how peoples attitudes are changing making robo-advisors more viable.
Reasons to Buy
  • Robo-advisors are a class of financial advisor that have recently arisen and which provide financial advice or wealth management services with little to no human help or input. Robo advisor is a very broad term and it can refer to any number of investment products that include an element of automation in their processes, this ranges from full account management removing the human element almost entirely, through to more efficiently mechanized systems of moving money in and out of investment portfolios with less human help.
  • Robo advisor startups make all manner of lofty claims, from saving money over traditional advisors, to being completely impartial and being much better at providing analysis than a traditional advisor. However much of this is not yet actually true.
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Overview
Catalyst
Robo-Advisors: Complex algorithms and AI are proving popular in wealth management
Robo-Advisors: Complex algorithms and AI are proving popular in wealth management
Robo-advisor products are those which include some element of automation
Incumbents and startup players prefer different types of products
D2C advisory platforms are the main route that start-ups are using, but incumbents still dominate
Business-to-business advisory services act as a supplemental product
Hybrid advisory services are mainly run by the incumbent big players
Robo advisor products are currently flourishing in developed markets with the US leading the way
Much of the product offering is generally poor and lacking in depth
Restricted advice may mean that ultimately the service is worse
Robo advising may actually be a misnomer, customers are expecting an AI product
Robo advising and digital wealth can’t be ignored because some people prefer it
Conclusion
Appendix
Further Reading
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Disclaimer

List of Tables
Table 1: Types of investor reaction to robo investing

List of Figures
Figure 1: Robo-advisors are replacing the traditional advisor role
Figure 2: Top global Robo-advisor firms
Figure 3: Geographic distribution of robo-advisors and number in 2017
Figure 4: Mature investors preferred method of advisor versus that of millennials
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