Established fund management companies are leading the next wave of market computerization through investment in robo advisors; robo advisors offer automated investment options with lower fee structures; investment managers are buying and integrating these services to expand their offering and mitigate competitive factors; a partnership between John Hancock Financial and NextCapital is one of the latest examples; other deals have included SigFig with Wells Fargo and UBS, BlackRock with FutureAdvisor and Fidelity with eMoney. Source
Investors in China are increasingly looking for an unbiased, lower cost option for managing their wealth; robo advisors are beginning to fill that void; the new firms are helping the non ultra rich access markets and helping the wealthy allocate their money without fear of a broker who is thinking of the corporate firm; though the data on robo advisors in China is currently thin, China Merchants Securities Co. believes that assets managed by robo advisors will reach over $750 billion by 2020. Source
Munich-based robo-advisor Scalable Capital has closed a Series D investment round of €50 million ($58 million) at a post-money valuation...
SoFi was in talks to acquire clearing and custody firm Apex but the talks failed and the lender instead made...
UBS has broadly launched its robo advisor service SmartWealth after a limited launch in October; the solution presents another robo advisory service offering by an incumbent financial services provider; portfolio fees range from 1% to 2% with an investment threshold of 15,000 British pounds ($18,500); according to data from Business Insider, Vanguard's Personal Advisor Services leads the robo advisor market with assets under management of $41 billion followed by Schwab with $10 billion and Betterment with $6.2 billion. Source
Robo advisors are meant to be simple and automated to keep costs low and allow your wealth to accumulate; in looking at the top four firms in the market the Wall Street Journal found that humans choose what goes into the portfolios; this begs the question whether investors are aware of this human intervention; the WSJ takes a closer look at how Vanguard Group's Vanguard Personal Advisor Services (PAS), Betterment, Wealthfront and Schwab Intelligent Portfolios allocate their clients money; while robo advisors are deemed a simple solution they might not be and investors should understand how their money is allocated. Source
Robo-advisors are far less prevalent in Europe compared to the US; however this is a growing market particularly in the UK and Germany; the UK market is larger, but Germany is growing at a faster rate; total assets under management stand at $3.5 billion at the end of 2017 according to TechFluence; it is estimated that there are around 98-126 robo-advisor services in Europe; article shares the biggest robo-advisors in Europe and the major differences between markets. Source
Marvelstone Capital is working with fintech startup Smartfolio to develop a robo advisor solution for family offices; it will target family offices based in Singapore, Malaysia, Indonesia, Myanmar and India; the robo advisor solution is being designed as a hybrid service for family offices with less than US$1 billion in AUM however Marvelstone will also market to family offices with AUM of US$1 billion to US$10 billion; it plans to launch the new solution in the third quarter of 2017. Source
Robo advisors have been increasingly gaining market share however Morgan Stanley says they are not likely to overtake incumbents; in a research note the bank says it is predicting a $6.5 trillion market globally for robo advice by 2025; despite the initial growth and market opportunity for robo advisors, the competitive landscape shows investors will still demand human advice; as a result, the hybrid model for robo advice is expected to emerge in the next wave of innovation for the industry; Betterment provides a market leading example of a hybrid model with its new Betterment Plus and Betterment Premium services announced in January. Source
Scalable has reached 100 million British pounds ($121.72 million) in assets under management for its robo advisory services; the firm has been averaging new business of 5 million British pounds ($6.09 million) per week and has over 2,500 customers; it offers low fees and daily investment monitoring with risk focused algorithms. Source