UK based startups and big banks have been pushing their online investment advisors through ads as they try to gain new clients; after seeing some of the startups have early success big banks started to get into the market this past year; the upcoming ISA deadline on April 5th has companies pushing their marketing spend in recent months with hopes it will pay off in new customers and cash. Source.
A new report by Accenture shows that seven out of 10 consumers would welcome exclusive robo-generated advice for investing and insurance needs; not all is lost for the human experience; 68% of consumers would still want to interact with a human for complex financial needs like a mortgage or to help solve a problem; the main reasons given for this shift are computers are seen to be less biased, they make services cheaper and the tasks are done faster; additionally, the report showed that consumers were willing to share their data if they thought a non traditional provider could be faster and cheaper. Source
Business Insider Intelligence has released a report covering all aspects of the fintech market; says annual financing globally for fintech reached $15 billion in August which is likely to surpass the total of $19 billion financed in 2015; Chinese fintech investments and insurtech have been catalysts for growth in 2016; robo advisors and blockchain are also two of the market's rapidly growing, emerging technologies. Source
UK robo advisor Scalable has doubled its assets under management in the last three months to EUR 200 million ($213 million); this includes approximately 5,000 client portfolios with an average value of EUR 40,000 ($42,659); the firm says it continues to grow steadily adding EUR 1 million ($1.07 million) in assets under management per day; Scalable launched in the UK in the summer of 2016; it has since expanded to Germany and Austria and has reported significant growth from a partnership with Siemens Private Finance for employee investment plans. Source
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
Two years ago John Hancock acquired AI startup Guide Financial that helped to set the stage for their newly released robo-advisor Twine; “We weren’t going to be a Vanguard, and on the other hand, there are actors like Robinhood — we landed somewhere in the middle,” said Barbara Goose, John Hancock’s chief marketing officer as reported by Tearsheet; the company is completely separate from John Hancock, in technology stack and management, though they do coordinate with the firm through their innovation officer; allowing Twine to be separate but still connected to the main firm gives them flexibility and allow them to target their millennial customer. Source.
Source reports on robo advice services at Vanguard; the firm's Personal Advice Services is a hybrid robo advice offering with $83 billion in assets under management; it is anticipated that it will be the first digital platform to cross $100 billion; firm is adding certified financial planners to its call centers for clients in Scottsdale, Arizona and Charlotte, North Carolina as an enhanced hybrid offering. Source
Former Merrill Lynch advisor Carlos Garcia is leading the launch of a new robo advisor, Finhabits, targeting Latin Americans; the platform offers investing and advice through investment accounts and Roth IRAs with low minimums of only $5; targeting the Latin American community the service will be available in both English and Spanish; fees are slightly higher due to the customized target demographic with a $1 per month fee for accounts under $2,500 and a 50 basis point annual fee for accounts over $2,500. 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
A new report from Numis entitled The State of AI in 2017 explains the potential AI and machine learning for wealth managers; as AltFi reports, “AI enables asset managers to deliver to the mass affluent a degree of personalisation and service quality previously reserved for high net worth clients.”; the technology can also help to improve quality, decrease cost and help to make most of the asset management industry into robo advisors. Source.