Table of Contents
Executive Summary
The robo-advice market will grow as traditional players launch digital platforms
Key findings
Critical success factors
Defining Robo-Advice
Robo-advisors are digital investment management platforms
The first client-facing robo-advisors were founded in 2008
Robo-advisors were preceded by PFM tools
Automated advice platforms are often fintech startup companies
B2C robo-advisors have been evolving, with traditional players building their platforms
Robo-advice has also entered the B2B space
Financial advisors can use existing solutions initially designed for the B2C market
Robo-advice platforms are now offered by IT software developers
Regulators are increasing the scrutiny on automated advice
Regulators' attitudes towards robo-advice differ between markets
The industry should use the robo-advice label carefully
Client-Facing Robo-Advisors Competitive Landscape
The US is the home of robo-advice
US robo-advisors operate three typical business models
The vanilla US robo-advisors appeal to cost-sensitive investors looking for simplicity
Hybrid business models leverage the digital channel to offer advice provided by humans
Robo-advisors have to introduce unique features to succeed in the long term
UK robo-advisors have been lacking recognition
The uptake of digital platforms in the UK differs from the US
Few digital players have obtained advisory permissions
Major UK competitors offer non-advised digital discretionary asset management
Business models in other markets mostly follow US and UK competitors
Theme-based investing can engage clients more
More advanced portfolio management strategies could attract sophisticated investors
Few robo-advisors operate in more than one market
Universal financial services providers have the resources to launch innovative platforms
Wealth managers are not concerned by robo-advisor competition
HNW individuals in developed markets show little interest in robo-advice
Robo-advisors are not sophisticated enough to compete with traditional wealth managers
Human relationships remain vital for HNW investors
Automated Investment Tools For Human Advisors
Relationship managers can be more efficient when backed by technology
Retail robo-advisors should be interested in partnerships with human advisors
Betterment Institutional partnered with Fidelity
Hedgeable and Scalable Capital offer investment management for institutions
RBC's advisors will be using FutureAdvisor's capabilities
Jemstep started as a client-facing platform but shifted to work with advisors
Automated advice platforms are becoming a standard product offered by banking software developers
Envestnet built the Advisor Now portal
Additiv offers software incorporating automation at four different levels
Appendix
Abbreviations and acronyms
Definitions
HNW
Liquid assets
Mass affluent
Mass market
Robo-advisor
Methodology
Competitor factsheets
Verdict Financial's 2015 Global Retail Banking Insight Survey
Verdict Financial's 2015 Global Wealth Managers Survey
Exchange rates
Bibliography
Further reading
About Verdict Financial
Disclaimer
List of Tables
Table 1: Verdict Financial's competitor factsheet: Betterment
Table 2: Verdict Financial's competitor factsheet: Wealthfront
Table 3: Verdict Financial's competitor factsheet: Schwab Intelligent Portfolios
Table 4: Verdict Financial's competitor factsheet: FutureAdvisor
Table 5: Verdict Financial's competitor factsheet: Personal Capital
Table 6: Verdict Financial's competitor factsheet: Vanguard Personal Advisor Services
Table 7: Verdict Financial's competitor factsheet: Hedgeable
Table 8: Verdict Financial's competitor factsheet: Money on Toast
Table 9: Verdict Financial's competitor factsheet: Wealth Horizon
Table 10: Verdict Financial's competitor factsheet: Nutmeg
Table 11: Verdict Financial's competitor factsheet: HL Portfolio+
Table 12: Selected digital investment platforms outside the UK and the US
Table 13: Verdict Financial's competitor factsheet: Stockspot
Table 14: Verdict Financial's competitor factsheet: True Wealth
Table 15: Selected established financial services firms' activity in the robo-advice space
Table 16: US dollar exchange rates, December 31, 2014 and December 31, 2015
List of Figures
Figure 1: Selected US robo-advisors by business model
Figure 2: US self-directed investors want to save on fees and invest easily
Figure 3: The UK self-directed market is not fee-driven
Figure 4: Selected competitors in the UK digital wealth management space
Figure 5: HNW clients' level of interest in robo-advice is moderate
Figure 6: Robo-advisors are too simple to compete with traditional wealth managers
Figure 7: German wealth managers consider robo-advisors a threat to their business
Figure 8: Contact with human advisors is vital for HNW clients
Figure 9: US robo-advisors' low fees attract HNW clients' attention
Figure 10: Automated investment tools can increase wealth managers' efficiency
Figure 11: Betterment Institutional offers an easily integrated investment and client management solution
Figure 12: Additiv's digital private banking platform is a solution for HNW clients
