You could have become aware of robo-advisors, the nickname for online investment platforms that make use of algorithms to manage customers’ money.
Robo-advisors deal with what we could call Bitcoin syndrome: It sounds cool, however who really utilizes it?
According to a new report from Swiss research business MyPrivateBanking Study, a great deal of individuals do– and even more people will get on board in the near future. By the end of 2014, the report discovers, robo-advisors might be handling $14 billion, 83 % of that in the US. In the next 5 years, that number is anticipated to increase to about $255 billion worldwide.
This sounds like a great deal of cash, and it is, however it’s worth keeping in mind that it’s just a small portion of the properties managed by conventional (read: human) monetary consultants. Traditional consultants still regulate around $5 trillion in the US alone.
‘Robo-advisors will certainly win just a little market share of this complete market in the near and medium term. Nevertheless, the robo phenomenon is right here to remain, and we believe that there is excellent need to anticipate robo-advisors to be highly successful as a class,’ states MyPrivateBanking Research senior expert Francis Groves in a press release.
In particular, the report highlights Wealthfront, Personal Capital, and Improvement as robo-advisors with the most prospective to disrupt the industry, particularly due to ‘their ability to win new clients, their advertising prowess, and their deep pockets funding-wise.’