Advisers with robo capabilities will have an edge
While standalone robo-advice won’t attract affluent investors, it will offer a competitive advantage to traditional wealth managers over competitors, GlobalData says.
The research company said that robo-advisers alone didn’t attract assets under management, and that high net worth (HNW) investors generally only entrusted small portfolios to digital-only platforms.
GlobalData’s Technology in Wealth Management: Drivers for Adoption and Future Trends survey found that demand for robo-advice was growing, however, meaning that offering it could strengthen human advisers’ value to clients.
Forty per cent of private wealth managers surveyed noted strong demand for the technology from clients, most obviously in the Asia-Pacific region.
“Despite some drawbacks robo-advice is a competitive advantage that all traditional wealth managers must acquire,” GlobalData financial services analyst, Andrew Haslip, said.
“They are not about to lose their best HNW clients to a start-up robo-advisor, no matter how slick the digital interface. But they might just lose out to a competitor that has adopted the technology and integrated it into its overall private wealth management proposition.
“Although ultimately the human element will remain prominent in the world of financial advice, the industry will continue its technological advancement.”
GlobalData’s finding follows the closure of yet another solely robo-advice firm in America, Hedgeable, which proceeded three similar firms already calling it quits.
AUTHOR
Hannah Wootton
Recommended for you
With regional and rural suburbs exhibiting high spare capacity to invest, Money Management speaks to three regional advisers on the opportunities beyond the major cities and the importance of a strong network.
Platform consolidation is expected to accelerate among financial advisers this year, as software company Finura pinpoints which two platforms are set to be the winners, thanks to this trend.
The software provider has made several appointments in its APAC wealth propositions team, with a focus on driving growth across digital advice, Xplan and strategic partnerships.
The platform has announced it plans to close its Xplore managed discretionary account service in 2026 which holds $2 billion in funds under administration.
