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
Editor’s note: This is a guest post from the CEO of LendingRobot, Emmanuel Marot. The views expressed in this post...
The Royal Bank of Scotland is closing 158 branches in the UK in an effort to reduce costs; it has continued to struggle since the financial crisis reporting nine consecutive years of losses; the firm has been increasingly integrating automation to cut costs and says it will make a decision on its robo advisory service for mortgage lending by the third quarter; the robo advisory service offers customers advice and insight that helps them decide on a mortgage loan product, also giving them an option to connect with a human advisor at any time during the process. Source
London-based FOL Wealth has launched a new robo advisor service for its wealth management clients; the solution offers clients automated service at an annual fee of 0.90% with a minimum investment of 1,000 British pounds ($1,216); it is intended to serve as a hybrid solution complementing the human advice of the firm's wealth advisors. 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
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
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
Goldman Sachs appears to be planning for a robo advisory service offering; the firm is advertising a job posting for a GSAM Technology digital experience developer that would build an automated robo advisory platform complementing the firm's asset management business; the bank's private wealth management business focuses on client's with approximately $50 million in investable assets; it has been broadening its client demographic recently by including business and retail products for investors with $1 million or less; a robo advisory service would add to other recent product expansions including the acquisition of GE Capital's online bank, Marcus and Honest Dollar. 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
blooom has developed a digital advice platform for defined contribution employer benefit plans; it seeks to provide automation, transparency and simplicity around retirement investing; the platform currently offers both automated and personal financial advice through online chats with human advisors; it recently raised $9 million and plans to expand its client base from 6,000 to 50,000 by the end of 2017. Source
