The automation of wealth management and “revolutionising” of the way individuals invest is expected to drive global roboadviser platform revenues to US$25 billion by 2022, up from an estimated US$1.7 billion in 2017.
The latest study from Juniper Research found that roboadvisers would make investments more compelling to High Net Worth Individuals and lower income individuals, with average fees estimated as low as 0.6% of assets under management in 2022, with disruption from new players such as Moneybox and Nutmeg.
Juniper predicted that roboadvisers would become increasingly more automated over time, as AI and machine learning-based approaches mature.
According to research author Nick Maynard, "The technologies powering roboadvisors 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 automated roboadvisor systems are establishing."
{loadposition peter}And Juniper says potential savings from automation is tempting existing players into investment, also observing that while new entrants are disrupting the market, traditional wealth management players are also adopting new technologies to evolve their business models.
Providers such as BlackRock and Aberdeen Asset Management have invested in roboadviser start-ups, such as Scalable Capital, FutureAdvisor and Parmenion.
The Juniper study found that the appeal of these technologies is clear to established players, as automated systems, even in a limited role, and would enable significant cost reductions and therefore increase their overall quality of service and profitability.