Low cost, automated investment advice is set to become the core of financial planning services The report shows that the current market for robo advice is dominated by the USA, with an estimated $1.2 trillion under management.
Low cost, automated investment advice is set to become the core of financial planning services, with market potential of $19.5 trillion assets under management, according to a new report by Ignition House, the financial services experts, and The Business Research Company. The ‘Robo Advice: Revolution or Evolution?’ Report argues that as awareness of automated options increase, and assets under management grow, many consumers and institutions will want to move away from expensive traditional investment advice into low cost automated options. This will initially be driven mainly from the corporate level, with large client wins by institutional robo offerings, and later by consumer focussed services.
The robo advice market is set for explosive growth, and we at Ignition House are excited to be the go-to authority tracking its development” commented Janette Weir, one of the report’s authors. The report shows that the current market for robo advice is dominated by the USA, with an estimated $1.2 trillion under management. The favourable regulatory environment, the high propensity to save in equities and the size of the retirement savings market all mean that the US is the most promising market for robo advice. India and China present long term opportunities but continue to be tied to traditional property, gold and money market fund investments. In Europe the UK looks set for growth with major pension funds available for investment and a positive environment for fintech.
EXECUTIVE SUMMARY Robo advice is not a new concept, but is gaining a lot of global attention There are far fewer pure robos than the media would have us believe Focus is on automated investment management; there are very few automated advice propositions Early movers built from scratch, but start-ups are now seeking to build partnerships with established players Low cost automated investments will become the core building block of financial planning Many of the me too automated investment propositions will fall by the wayside unless they continue to develop The market for automated investment management services will grow significantly, but hybrids will be the dominant model The addressable market for virtual advice is huge, but very few propositions have come forward to meet this demand WHAT IS ROBO ADVICE? Robo advice: a catch all term for remotely delivered wealth management Defining robo advice Automated investment management solutions are the dominant model; but how automated are they? There are only a handful of automated financial planning propositions in the market today Why is robo advice under the spotlight? Propositions are only as good as the algorithms EMERGING BUSINESS MODELS Pure play start-ups have led the charge to date The cost of acquisition is the elephant in the room for start-ups Re-focus on the B2B market to drive profitability Industry stalwarts are now seeing the potential of automation; and have important strategic advantages over the start-ups Which play will the current incumbents make build, partner, or buy? In the B2B space, robo for advisers is nothing new, but some are now embracing the opportunity to expand the reach of their business Robo advice will place widespread pressure on margins and fees The impact on the advice market will take longer to play out, and will result in advisers ultimately moving up the advice value chain WHAT WILL THE WINNERS LOOK LIKE? Many of the me tooautomated investment propositions will fall by the wayside unless they continue to develop Automated investment propositions will need get much better at targeting clearly defined, profitable consumer segments Differentiation needs to be on a feature that the mass market consumer can understand A truly customer-centric approach will be required to shift customers from a transactional to an ongoing relationship Winning propositions will make better use of behavioural economics to enhance the user experience and increase conversion and retention rates Winning propositions will need to engage consumers in new ways, using visual stimulus to create emotional responses Gamification can reward consumers for building knowledge; virtual reality can allow them to test drive future outcomes in a safe environment Winning solutions will blend the human touch with automation Next generation cyborgs will shift the boundary between human and robot within five years think virtual advice New revenue models to reflect what consumers are actually paying for? Big data, data giants and analytics: The final frontier Robo 3.0 has the potential to do so much more than personal finance SIZE AND GROWTH OF THE GLOBAL MARKET Robo advice growth is about to take off Drivers for global growth Robo advisors are everywhere, but the US still dominates the global landscape The US still presents the best market opportunity and will continue to drive global growth Global forecasts for robo advice COUNTRY PROFILE: USA Introduction Market Background and Development History Market Size and Growth Competitive Landscape Regulatory Environment Future Prospects COUNTRY PROFILE: UK Introduction Market Background and Development History Market Size and Growth Competitive Landscape Regulatory Framework Future Prospects To Get Discount On The Report @ https://marketreportscenter.com/request-discount/357816
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