Robo-advisor helps investors to manage their funds, portfolios, and investments online with less human intervention. It collects all the relevant information such as investment timeline, risk tolerance, and returns with respect to their savings from clients through an online questionnaire. It makes use of algorithm calculations to analyze the data and provide comprehensive asset allocation approach that meets with the investor’s goals. The robo-advisor industry has recorded continuous investments for its developments and has become a massive contributor to the economic growth. Although the COVID-19 outbreak is negatively affecting the global economy, SMEs, stock markets, and entire wealth management services, the robo advisory industry has experienced a massive surge, due to higher demand for optimized wealth management during this pandemic.
Robo advisors have evolved to offer increasingly personalized investment recommendations. They consider an investor's financial situation, risk appetite, investment goals, and time horizon to construct a customized portfolio. Robo advisors can provide tailored investment strategies compared to traditional one-size-fits-all approaches by leveraging data analytics and algorithms. This personalization appeals to investors who desire customized solutions aligned with their specific financial objectives. In addition, regulatory changes, particularly in the financial services industry, have aimed to enhance transparency and protect investor interests. In several jurisdictions, robo-advisors adhere to strict compliance guidelines, ensuring that they act in the best interests of their clients. These regulations often require robo-advisors to provide clear disclosure of fees, potential conflicts of interest, and the basis for their investment recommendations. Regulatory frameworks have facilitated the growth of the robo advisory market by fostering trust and accountability.
The key factors driving the growth of the robo advisory market trends include rapid digitalization in financial services, shift in preference from traditional investment services for robo advisory services, and personalized investment solutions. However, increase in security concerns and limited adoption among older investors hampers the growth of the robo advisory market. On the contrary, technological innovations in digital investment platforms and rise in adoption of digital platforms and mobile devices are expected to provide lucrative opportunities for the robo advisory market expansion during the forecast period.
The robo advisory market is segmented into business model, provider, service type, end user, and region. By business model, the market is fragmented into pure robo advisors and hybrid robo advisors. By service provider, the market is divided into fintech robo advisors, banks, traditional wealth managers and others. By service type, the market is categorized into direct plan-based/goal-based and comprehensive wealth advisory. By end user, the market is bifurcated into retail investor and high net worth individuals (HNIs). Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The key players profiled in the robo advisory market report are Fincite GmbH, Betterment, Charles Schwab & Co., Inc., SigFig Wealth Management, LLC, Social Finance, Inc., Wealthfront Corporation, Wealthify Limited, The Vanguard Group, Inc., Ginmon Vermögensverwaltung GmbH, and Axos Financial, Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Robo advisors have evolved to offer increasingly personalized investment recommendations. They consider an investor's financial situation, risk appetite, investment goals, and time horizon to construct a customized portfolio. Robo advisors can provide tailored investment strategies compared to traditional one-size-fits-all approaches by leveraging data analytics and algorithms. This personalization appeals to investors who desire customized solutions aligned with their specific financial objectives. In addition, regulatory changes, particularly in the financial services industry, have aimed to enhance transparency and protect investor interests. In several jurisdictions, robo-advisors adhere to strict compliance guidelines, ensuring that they act in the best interests of their clients. These regulations often require robo-advisors to provide clear disclosure of fees, potential conflicts of interest, and the basis for their investment recommendations. Regulatory frameworks have facilitated the growth of the robo advisory market by fostering trust and accountability.
The key factors driving the growth of the robo advisory market trends include rapid digitalization in financial services, shift in preference from traditional investment services for robo advisory services, and personalized investment solutions. However, increase in security concerns and limited adoption among older investors hampers the growth of the robo advisory market. On the contrary, technological innovations in digital investment platforms and rise in adoption of digital platforms and mobile devices are expected to provide lucrative opportunities for the robo advisory market expansion during the forecast period.
The robo advisory market is segmented into business model, provider, service type, end user, and region. By business model, the market is fragmented into pure robo advisors and hybrid robo advisors. By service provider, the market is divided into fintech robo advisors, banks, traditional wealth managers and others. By service type, the market is categorized into direct plan-based/goal-based and comprehensive wealth advisory. By end user, the market is bifurcated into retail investor and high net worth individuals (HNIs). Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The key players profiled in the robo advisory market report are Fincite GmbH, Betterment, Charles Schwab & Co., Inc., SigFig Wealth Management, LLC, Social Finance, Inc., Wealthfront Corporation, Wealthify Limited, The Vanguard Group, Inc., Ginmon Vermögensverwaltung GmbH, and Axos Financial, Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Key Benefits for Stakeholders
- The study provides an in-depth analysis of the robo advisory market along with current trends and future estimations to illustrate the imminent investment pockets.
- Information about key drivers, restrains, & opportunities and their impact analysis on the robo advisory market size are provided in the report.
- The Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the industry.
- The quantitative analysis of the robo advisory market from 2022 to 2032 is provided to determine the market potential.
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Key Market Segments
By Service Type
- Direct Plan-based/Goal-based
- Comprehensive Wealth Advisory
By Business Model
- Pure Robo Advisors
- Hybrid Robo Advisors
By Provider
- Fintech Robo Advisors
- Banks
- Traditional Wealth Managers
- Others
By End User
- Retail Investor
- High Net Worth Individuals (HNIs)
By Region
- North America
- U.S.
- Canada
- Europe
- UK
- Germany
- France
- Italy
- Spain
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Rest of Asia-Pacific
- LAMEA
- Latin America
- Middle East
- Africa
Key Market Players
- Axos Financial, Inc.
- Betterment
- Charles Schwab & Co., Inc.
- Fincite Gmbh
- Ginmon Vermögensverwaltung GmbH
- SigFig Wealth Management, LLC
- Social Finance, Inc.
- The Vanguard Group, Inc.
- Wealthfront Corporation.
- Wealthify Limited
Table of Contents
CHAPTER 1: INTRODUCTION
CHAPTER 2: EXECUTIVE SUMMARY
CHAPTER 3: MARKET OVERVIEW
CHAPTER 4: ROBO ADVISORY MARKET, BY BUSINESS MODEL
CHAPTER 5: ROBO ADVISORY MARKET, BY PROVIDER
CHAPTER 6: ROBO ADVISORY MARKET, BY SERVICE TYPE
CHAPTER 7: ROBO ADVISORY MARKET, BY END USER
CHAPTER 8: ROBO ADVISORY MARKET, BY REGION
CHAPTER 9: COMPETITIVE LANDSCAPE
CHAPTER 10: COMPANY PROFILES
List of Tables
List of Figures
Executive Summary
According to this report, the robo advisory market was valued at $7.9 billion in 2022, and is estimated to reach $129.5 billion by 2032, growing at a CAGR of 32.5% from 2023 to 2032.The Robo Advisory Market is likely to experience a significant growth rate of 32.5% from 2022-2032 owing to the rapid digitalization in financial services and shift in preferences from traditional investment services to robo advisory services
A robo-advisor is a digital financial advisor that provides financial advice or manages investments with moderate to minimal human intervention. It is designed to deliver advice digitally based on inputs received from the investor. It combines advanced software algorithms with machine learning (ML) and artificial intelligence (AI) to provide critical investment advice and portfolio management services. Robo-advisors use computer algorithms and data to invest on behalf of investors, and charge much lower advisory fees than a traditional financial advisor. Furthermore, the widespread use of digital platforms and mobile devices has transformed the way individuals access financial services. Investors now expect seamless and user-friendly interfaces that allow them to manage their investments. Robo-advisors leverage digital platforms and mobile apps to provide intuitive interfaces, enabling investors to monitor their portfolios, make adjustments, and execute transactions easily. The convenience and accessibility offered by robo-advisory platforms have contributed to their rapid adoption.
Robo advisors have evolved to offer increasingly personalized investment recommendations. They consider an investor's financial situation, risk appetite, investment goals, and time horizon to construct a customized portfolio. Robo advisors can provide tailored investment strategies compared to traditional one-size-fits-all approaches by leveraging data analytics and algorithms. This personalization appeals to investors who desire customized solutions aligned with their specific financial objectives. In addition, regulatory changes, particularly in the financial services industry, have aimed to enhance transparency and protect investor interests. In several jurisdictions, robo-advisors adhere to strict compliance guidelines, ensuring that they act in the best interests of their clients. These regulations often require robo-advisors to provide clear disclosure of fees, potential conflicts of interest, and the basis for their investment recommendations. Regulatory frameworks have facilitated the growth of the robo advisory market by fostering trust and accountability.
Furthermore, robo-advisors heavily rely on advanced technologies such as AI, machine learning, and natural language processing. These technologies enable robo-advisors to analyze vast amounts of data, identify investment patterns, and generate insights quickly. By continuously learning from user behavior and market trends, robo-advisors can improve their recommendations over time. AI-driven robo-advisory platforms can also automate various investment tasks, such as rebalancing portfolios and tax optimization, ensuring efficient and accurate investment management.
The market also offers growth opportunities to the key players in the market. Key players are adopting strategies to strengthen their market positions in the robo advisory industry, including new technology adoption, product developments, mergers and acquisitions, joint ventures, alliances, and partnerships. For instance, in June 2021, LU International (Hong Kong) Limited, a subsidiary of Lufax Holding Limited, introduced Hong Kong’s first open robo-advisory platform, offering tailor-made asset allocation solutions through its professional AI investment consultant 'Lucy”.
The robo advisory market is segmented into business model, provider, service type, end user, and region. By business model, the market is fragmented into pure robo advisors and hybrid robo advisors. By service provider, the market is divided into fintech robo advisors, banks, traditional wealth managers and others. By service type, the market is categorized into direct plan-based/goal-based and comprehensive wealth advisory. By end user, the market is bifurcated into retail investor and high net worth individuals (HNIs). Region wise, it is analyzed across North America (the U. S., and Canada), Europe (UK, Germany, France, Italy, Spain, and rest of Europe), Asia-Pacific (China, Japan, India, Australia, South Korea, and rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and Africa).
The key players profiled in the study are Fincite GmbH, Betterment, Charles Schwab & Co., Inc., SigFig Wealth Management, LLC, Social Finance, Inc., Wealthfront Corporation, Wealthify Limited, The Vanguard Group, Inc., Ginmon Vermögensverwaltung GmbH, and Axos Financial, Inc. The players in the market have been actively engaged in the adoption of various strategies such as business expansion, product launch, collaboration, and partnership to remain competitive and gain an advantage over the competitors in the market. For instance, in December 2021, Santander and financial services software manufacturer SigFig launched a new robo-advice service focused on exchange-traded funds (ETFs). SigFig offers a selection of model portfolios composed of ETFs.
Key Market Insights
By business model, the hybrid robo advisors segment was the highest revenue contributor to the market and is estimated to reach $73.85 billion by 2032, with a CAGR of 30.7%. However, the pure robo advisors segment is estimated to be the fastest-growing segment with a CAGR of 35.4% during the forecast period.By provider, the fintech robo advisors segment was the highest revenue contributor to the market, and is estimated to reach $65.27 billion by 2032, with a CAGR of 30.1%. However, the banks segment is estimated to be the fastest-growing segment with a CAGR of 37.4% during the forecast period.
By service type, the direct plan-based/goal-based segment was the highest revenue contributor to the market, and is estimated to reach $79.22 billion by 2032, with a CAGR of 31.2%. However, the comprehensive wealth advisory segment is estimated to be the fastest-growing segment with a CAGR of 34.9% during the forecast period.
By end user, the high net worth individuals (HNIs) segment was the highest revenue contributor to the market, and is estimated to reach $69.72 billion by 2032, with a CAGR of 31.0%. However, the retail investor segment is estimated to be the fastest-growing segment with a CAGR of 34.6% during the forecast period.
Based on region, North America was the highest revenue contributor, accounting for $2.95 billion in 2022, and is estimated to reach $36.61 billion by 2032, with a CAGR of 28.9%. However, Asia-Pacific is estimated to be the fastest-growing region with a CAGR of 37.1% during the forecast period.
Companies Mentioned
- Axos Financial, Inc.
- Betterment
- Charles Schwab & Co., Inc.
- Fincite Gmbh
- Ginmon Vermögensverwaltung GmbH
- SigFig Wealth Management, LLC
- Social Finance, Inc.
- The Vanguard Group, Inc.
- Wealthfront Corporation.
- Wealthify Limited
Methodology
The analyst offers exhaustive research and analysis based on a wide variety of factual inputs, which largely include interviews with industry participants, reliable statistics, and regional intelligence. The in-house industry experts play an instrumental role in designing analytic tools and models, tailored to the requirements of a particular industry segment. The primary research efforts include reaching out participants through mail, tele-conversations, referrals, professional networks, and face-to-face interactions.
They are also in professional corporate relations with various companies that allow them greater flexibility for reaching out to industry participants and commentators for interviews and discussions.
They also refer to a broad array of industry sources for their secondary research, which typically include; however, not limited to:
- Company SEC filings, annual reports, company websites, broker & financial reports, and investor presentations for competitive scenario and shape of the industry
- Scientific and technical writings for product information and related preemptions
- Regional government and statistical databases for macro analysis
- Authentic news articles and other related releases for market evaluation
- Internal and external proprietary databases, key market indicators, and relevant press releases for market estimates and forecast
Furthermore, the accuracy of the data will be analyzed and validated by conducting additional primaries with various industry experts and KOLs. They also provide robust post-sales support to clients.
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