Robo Advisory Services Market
Robo Advisory Services Market Forecasts to 2028 - Global Analysis By Service Type (Investment Advisors, Wealth Management, Retirement Planning, Tax-loss Harvesting and Other Service Types), and By Geography
|
CAGR (2022 - 2028) |
38.3% |
|
Regions Covered |
North America, Europe, Asia Pacific, South America, and Middle East & Africa |
|
Countries Covered |
US, Canada, Mexico, Germany, UK, Italy, France, Spain, Japan, China, India, Australia, New Zealand, South Korea, Rest of Asia Pacific, South America, Argentina, Brazil, Chile, Middle East & Africa, Saudi Arabia, UAE, Qatar, and South Africa |
|
Largest Market |
North America |
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Highest Growing Market |
Asia Pacific |
According to Stratistics MRC, the Global Robo Advisory Services Market is expected to grow at a CAGR of 38.3% during the forecast period. Digital platforms that provide algorithm-driven and automated financial planning services with no or minimal human intervention are known as robo advisory services. The data is analyzed by a robot advisor using algorithmic calculations to provide an extensive asset allocation strategy that is in line with the investor's objectives. Continuous investments have been made in the robo-advisor sector to support its expansion and spur economic growth. According to the type of service provided, it is primarily divided into two types: cash management and wealth management.
According to Corporate Vision Magazine, a massive increase of 3.1 percent in Robo advice sign-ups was recorded in the first quarter of 2020. Vanguard, for example, had a 14 % gain in assets and a 35 percent increase in customer numbers, while PensionBee saw a 14% increase in Robo advising.
Market Dynamics:
Driver:
Rapid digitalization in the financial sector
The main factors influencing the growth of the global robo advisory market are the quick digitization of financial services, a shift in preference from traditional investment services to robot advising, and the demand for affordable investment advice. High-quality and inexpensive portfolios, tax-loss harvesting, and safe investments are just a few advantages that robo-advising services have over conventional investing and advice methods. Additionally, robo-advice platforms' decisions are based on real-time data and the state of the economy, eliminating credit risks and promoting consumer adoption.
Restraint:
Regulatory obstacles and low retail customer adoption
To effectively serve clients, a robot adviser must be programmed with investment objectives and equipped to record and quantify aspects of each investor's risk profile. For the robot-adviser ecosystem to fulfill the fiduciary duty of the investment adviser, additional controls and verification must be added. Regulators may find it challenging to decide how to assess a software platform whose fiduciary obligations are still ultimately held by people. Robo advisers may be constrained by regulatory restrictions on highly liquid funds and assets, which may limit the scope of consultation in some areas. Furthermore, because a human financial advisor can better understand a client's risk tolerance than the robot adviser platform can, conflicts of interest based on fees or an incorrect asset allocation may result.
Opportunity:
Smart contracts integration in the robo advisory sector
Financial advisory services for people's finances make up the majority of robo-advice services. Robo-advisers are quickly filling the gaps left by human investment advisors, such as capability, capacity, and cost, as a result of increased adoption of digitalization throughout the investment industry and the use of AI in robotics. Globally, fintechs rely on a mix of technology and one-on-one guidance. Moreover, they are quickly developing robo-advice services using AI and machine learning, which will give regular investors accurate and transparent advisory services and help them avoid making bad investment decisions.
Threat:
Technical and operational challenges
In order to take a more prominent role in the disposition of customers assets, the IT control environment must meet acceptable standards of integrity, security, resiliency, and capacity. For instance, a platform for robot advisers may lose revenue and clients if it cannot adapt to growing business volumes or if capacity planning is ineffective. It is necessary for a business to be aware of and manage the risks related to vendors if it wants to use a vendor robo-advisor platform. Companies must implement adequate controls around their automated adviser environments to minimize risks related to consumer segmentation, business continuity planning, and IT governance. It's also critical to prevent algorithm modifications or tampering that could skew investment advice or cause the algorithm to act in a way that is not in the client's best interests.
Covid-19 Impact:
Investors who use robo-advisory services to implement a goals-based planning philosophy concentrate their investments primarily on the risk capacity associated with their goals. This method has the advantage of incorporating lower-risk asset allocation into higher-priority near-term goals, which lessens the impact of transient economic shocks. Advisory services have always chosen their portfolios based on risk. The majority of robo-advisors offer inexpensive passive investments, but investors can adjust their allocations as necessary. Some investors are changing their asset allocations to less risky asset classes, like bond ETFs, to reduce downside risk as a result of the current market slump.
The Investment advisory services segment is expected to be the largest during the forecast period
The Investment advisory services segment is expected to have a largest share during the forecast period. Investment advisory services, which are used for people's personal finances, make up the majority of robo-advisory services. Robo-advisors are quickly filling the capabilities, capacities, and cost gaps left by human investment advisors. Globally, FinTechs rely on both technological advancements and one-on-one guidance. They are quickly developing robo-advisory services using technologies like AI and ML, which will provide transparent advisory services to retail investors and further prevent them from making unwise investment decisions.
The wealth management segment is expected to have the highest CAGR during the forecast period
The industry with the highest CAGR growth during the forecast period is wealth management. By calculating their clients' financial net worth and understanding their risk tolerance, these wealth management companies offer comprehensive wealth management services. They offer financial planning, portfolio management services, and financial consulting for wealth and estate planning, in addition to fund-based portfolio recommendations. This is expected to support segment growth, along with the expansion of financial advisory services available to the less wealthy population.
Region with largest share:
The North American region is likely to dominate the market due to the presence of numerous significant players there, including Betterment LLC, Charles Schwab & Co., Inc., Wealthfront Inc., and Vanguard Group, among others. The area has also outperformed other regions in terms of technological advancement and the robotics industry. The company's major financial institutions are creating and launching new products to take advantage of the first-mover advantage and gain the most market traction. For instance, Citigroup unveiled a new digital robo-advisor in January 2020 that would provide free services to Citi's priority clients who have at least USD 50,000 in accounts or investments with the bank. Numerous financial institutions are still developing cutting-edge platforms that will offer their clients robo-advisory services. Such initiatives and investments by regional players are likely to increase the market's dominance in the coming years.
Region with highest CAGR:
During the forecast period, it is expected that the Asia Pacific region will expand significantly. The expansion of the regional market can be attributed to consumers' increasing understanding of the advantages of using automated financial assistance for investments and savings. The use of robo-advisory is being promoted by a number of businesses across Asia Pacific, and this is anticipated to help the region grow. For instance, TradeSmart, one of India's top new-age online discount brokerage companies, announced in July 2022 that it had partnered with Modern Algos to provide advisory services that were AI-powered. This platform has AI built in to give users a productive order management system. It uses deep analytics to ensure that they receive the best personalized advisory based on their age, investment, and future goals.
Key players in the market
Some of the key players in Robo Advisory Services market include Betterment LLC, Wealthfront Corporation, The Vanguard Group, Inc., Charles Schwab & Co., Inc., BlackRock Inc.(FutureAdvisor), FMR LLC (Fidelity Go), Roboadviso and M1 Holdings Inc.
Key Developments:
In March 2022, California-based FinTech start-up Acorns specializing in micro-investing and Robo-investing has raised $300 million from private investors.
In January 2022, UBS to acquire Wealthfront, automated investment services and Robo-adviser firm for USD 1.4 bn to expand in the American region.
In December 2021, The Financial Supervisory Commission (FSC) has approved a one-year regulatory sandbox experiment proposal from ALPHA Robo-Advisor and SinoPac Securities to deliver a Robo Advisor service for implementing financial inclusion.
Service Types Covered:
• Investment Advisors
• Wealth Management
• Retirement Planning
• Tax-loss Harvesting
• Other Service Types
Regions Covered:
• North America
o US
o Canada
o Mexico
• Europe
o Germany
o UK
o Italy
o France
o Spain
o Rest of Europe
• Asia Pacific
o Japan
o China
o India
o Australia
o New Zealand
o South Korea
o Rest of Asia Pacific
• South America
o Argentina
o Brazil
o Chile
o Rest of South America
• Middle East & Africa
o Saudi Arabia
o UAE
o Qatar
o South Africa
o Rest of Middle East & Africa
What our report offers:
- Market share assessments for the regional and country-level segments
- Strategic recommendations for the new entrants
- Covers Market data for the years 2020, 2021, 2022, 2025, and 2028
- Market Trends (Drivers, Constraints, Opportunities, Threats, Challenges, Investment Opportunities, and recommendations)
- Strategic recommendations in key business segments based on the market estimations
- Competitive landscaping mapping the key common trends
- Company profiling with detailed strategies, financials, and recent developments
- Supply chain trends mapping the latest technological advancements
Free Customization Offerings:
All the customers of this report will be entitled to receive one of the following free customization options:
• Company Profiling
o Comprehensive profiling of additional market players (up to 3)
o SWOT Analysis of key players (up to 3)
• Regional Segmentation
o Market estimations, Forecasts and CAGR of any prominent country as per the client's interest (Note: Depends on feasibility check)
• Competitive Benchmarking
Benchmarking of key players based on product portfolio, geographical presence, and strategic alliances
Table of Contents
1 Executive Summary
2 Preface
2.1 Abstract
2.2 Stake Holders
2.3 Research Scope
2.4 Research Methodology
2.4.1 Data Mining
2.4.2 Data Analysis
2.4.3 Data Validation
2.4.4 Research Approach
2.5 Research Sources
2.5.1 Primary Research Sources
2.5.2 Secondary Research Sources
2.5.3 Assumptions
3 Market Trend Analysis
3.1 Introduction
3.2 Drivers
3.3 Restraints
3.4 Opportunities
3.5 Threats
3.6 Emerging Markets
3.7 Impact of Covid-19
4 Porters Five Force Analysis
4.1 Bargaining power of suppliers
4.2 Bargaining power of buyers
4.3 Threat of substitutes
4.4 Threat of new entrants
4.5 Competitive rivalry
5 Global Robo Advisory Services Market, By Service Type
5.1 Introduction
5.2 Investment Advisors
5.3 Wealth Management
5.4 Retirement Planning
5.5 Tax-loss Harvesting
5.6 Other Service Types
6 Global Robo Advisory Services Market, By Geography
6.1 Introduction
6.2 North America
6.2.1 US
6.2.2 Canada
6.2.3 Mexico
6.3 Europe
6.3.1 Germany
6.3.2 UK
6.3.3 Italy
6.3.4 France
6.3.5 Spain
6.3.6 Rest of Europe
6.4 Asia Pacific
6.4.1 Japan
6.4.2 China
6.4.3 India
6.4.4 Australia
6.4.5 New Zealand
6.4.6 South Korea
6.4.7 Rest of Asia Pacific
6.5 South America
6.5.1 Argentina
6.5.2 Brazil
6.5.3 Chile
6.5.4 Rest of South America
6.6 Middle East & Africa
6.6.1 Saudi Arabia
6.6.2 UAE
6.6.3 Qatar
6.6.4 South Africa
6.6.5 Rest of Middle East & Africa
7 Key Developments
7.1 Agreements, Partnerships, Collaborations and Joint Ventures
7.2 Acquisitions & Mergers
7.3 New Product Launch
7.4 Expansions
7.5 Other Key Strategies
8 Company Profiling
8.1 Betterment LLC
8.2 Wealthfront Corporation
8.3 The Vanguard Group, Inc.
8.4 Charles Schwab & Co., Inc.
8.5 BlackRock, Inc.(FutureAdvisor)
8.6 FMR LLC (Fidelity Go)
8.7 Roboadviso
8.8 M1 Holdings Inc.
List of Tables
1 Global Robo Advisory Services Market Outlook, By Region (2020-2028) ($MN)
2 Global Robo Advisory Services Market Outlook, By Investment Advisors (2020-2028) ($MN)
3 Global Robo Advisory Services Market Outlook, By Wealth Management (2020-2028) ($MN)
4 Global Robo Advisory Services Market Outlook, By Retirement Planning (2020-2028) ($MN)
5 Global Robo Advisory Services Market Outlook, By Tax-loss Harvesting (2020-2028) ($MN)
6 Global Robo Advisory Services Market Outlook, By Other Service Types (2020-2028) ($MN)
7 North America Robo Advisory Services Market Outlook, By Country (2020-2028) ($MN)
8 North America Robo Advisory Services Market Outlook, By Investment Advisors (2020-2028) ($MN)
9 North America Robo Advisory Services Market Outlook, By Wealth Management (2020-2028) ($MN)
10 North America Robo Advisory Services Market Outlook, By Retirement Planning (2020-2028) ($MN)
11 North America Robo Advisory Services Market Outlook, By Tax-loss Harvesting (2020-2028) ($MN)
12 North America Robo Advisory Services Market Outlook, By Other Service Types (2020-2028) ($MN)
13 Europe Robo Advisory Services Market Outlook, By Country (2020-2028) ($MN)
14 Europe Robo Advisory Services Market Outlook, By Investment Advisors (2020-2028) ($MN)
15 Europe Robo Advisory Services Market Outlook, By Wealth Management (2020-2028) ($MN)
16 Europe Robo Advisory Services Market Outlook, By Retirement Planning (2020-2028) ($MN)
17 Europe Robo Advisory Services Market Outlook, By Tax-loss Harvesting (2020-2028) ($MN)
18 Europe Robo Advisory Services Market Outlook, By Other Service Types (2020-2028) ($MN)
19 Asia Pacific Robo Advisory Services Market Outlook, By Country (2020-2028) ($MN)
20 Asia Pacific Robo Advisory Services Market Outlook, By Investment Advisors (2020-2028) ($MN)
21 Asia Pacific Robo Advisory Services Market Outlook, By Wealth Management (2020-2028) ($MN)
22 Asia Pacific Robo Advisory Services Market Outlook, By Retirement Planning (2020-2028) ($MN)
23 Asia Pacific Robo Advisory Services Market Outlook, By Tax-loss Harvesting (2020-2028) ($MN)
24 Asia Pacific Robo Advisory Services Market Outlook, By Other Service Types (2020-2028) ($MN)
25 South America Robo Advisory Services Market Outlook, By Country (2020-2028) ($MN)
26 South America Robo Advisory Services Market Outlook, By Investment Advisors (2020-2028) ($MN)
27 South America Robo Advisory Services Market Outlook, By Wealth Management (2020-2028) ($MN)
28 South America Robo Advisory Services Market Outlook, By Retirement Planning (2020-2028) ($MN)
29 South America Robo Advisory Services Market Outlook, By Tax-loss Harvesting (2020-2028) ($MN)
30 South America Robo Advisory Services Market Outlook, By Other Service Types (2020-2028) ($MN)
31 Middle East & Africa Robo Advisory Services Market Outlook, By Country (2020-2028) ($MN)
32 Middle East & Africa Robo Advisory Services Market Outlook, By Investment Advisors (2020-2028) ($MN)
33 Middle East & Africa Robo Advisory Services Market Outlook, By Wealth Management (2020-2028) ($MN)
34 Middle East & Africa Robo Advisory Services Market Outlook, By Retirement Planning (2020-2028) ($MN)
35 Middle East & Africa Robo Advisory Services Market Outlook, By Tax-loss Harvesting (2020-2028) ($MN)
36 Middle East & Africa Robo Advisory Services Market Outlook, By Other Service Types (2020-2028) ($MN)
List of Figures
RESEARCH METHODOLOGY
We at ‘Stratistics’ opt for an extensive research approach which involves data mining, data validation, and data analysis. The various research sources include in-house repository, secondary research, competitor’s sources, social media research, client internal data, and primary research.
Our team of analysts prefers the most reliable and authenticated data sources in order to perform the comprehensive literature search. With access to most of the authenticated data bases our team highly considers the best mix of information through various sources to obtain extensive and accurate analysis.
Each report takes an average time of a month and a team of 4 industry analysts. The time may vary depending on the scope and data availability of the desired market report. The various parameters used in the market assessment are standardized in order to enhance the data accuracy.
Data Mining
The data is collected from several authenticated, reliable, paid and unpaid sources and is filtered depending on the scope & objective of the research. Our reports repository acts as an added advantage in this procedure. Data gathering from the raw material suppliers, distributors and the manufacturers is performed on a regular basis, this helps in the comprehensive understanding of the products value chain. Apart from the above mentioned sources the data is also collected from the industry consultants to ensure the objective of the study is in the right direction.
Market trends such as technological advancements, regulatory affairs, market dynamics (Drivers, Restraints, Opportunities and Challenges) are obtained from scientific journals, market related national & international associations and organizations.
Data Analysis
From the data that is collected depending on the scope & objective of the research the data is subjected for the analysis. The critical steps that we follow for the data analysis include:
- Product Lifecycle Analysis
- Competitor analysis
- Risk analysis
- Porters Analysis
- PESTEL Analysis
- SWOT Analysis
The data engineering is performed by the core industry experts considering both the Marketing Mix Modeling and the Demand Forecasting. The marketing mix modeling makes use of multiple-regression techniques to predict the optimal mix of marketing variables. Regression factor is based on a number of variables and how they relate to an outcome such as sales or profits.
Data Validation
The data validation is performed by the exhaustive primary research from the expert interviews. This includes telephonic interviews, focus groups, face to face interviews, and questionnaires to validate our research from all aspects. The industry experts we approach come from the leading firms, involved in the supply chain ranging from the suppliers, distributors to the manufacturers and consumers so as to ensure an unbiased analysis.
We are in touch with more than 15,000 industry experts with the right mix of consultants, CEO's, presidents, vice presidents, managers, experts from both supply side and demand side, executives and so on.
The data validation involves the primary research from the industry experts belonging to:
- Leading Companies
- Suppliers & Distributors
- Manufacturers
- Consumers
- Industry/Strategic Consultants
Apart from the data validation the primary research also helps in performing the fill gap research, i.e. providing solutions for the unmet needs of the research which helps in enhancing the reports quality.
For more details about research methodology, kindly write to us at info@strategymrc.com
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