Investment robo-advisor revenues ‘set to soar’

Revenues generated by wealth management robo-advisory platforms will grow to $25 billion globally by 2022, up from $1.7 billion in 2017, according to new figures.

The latest report from Juniper Research estimated that total assets under management by robo-advisors will increase twelve-fold to reach $4.1 trillion four years’ time, up from an estimated $330 billion in the past 12 months.

The study found that the automation of wealth management could revolutionise the way individuals invest. It argued that robo-advisors will make investments that are “more compelling” to both high net worth and lower income individuals, with average fees predicted to be as low as 0.6 per cent of assets under management by 2022.

The report highlighted future disruption in the market from new players such as Moneybox and Nutmeg, but also pointed out that traditional wealth management players are adopting new technologies to evolve their business models and drive cost savings.

Juniper noted that robo-advisors are broadening the appeal of the wealth management market, with intuitive smartphone apps making the investment process far more convenient and attracting new customers such as those in the Millennial age group.

The study also predicted that robo-advisors will become increasingly more automated over time, as artificial intelligence and machine learning-based approaches develop.

Research author Nick Maynard said: “The technologies powering robo-advisors will mature to such an extent that they move from their current human supervised role to being utilised in a fully automated way. This will be aided by track records of performance that automated robo-advisor systems are establishing.”

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