The benefits of robo-advisors are clear: trustworthy and affordable financial advice for everyone, regardless of net worth. Although some may debate what role robo-advising will play in wealth management, it’s hard to imagine a world without it.
Ever since the evolution of the internet and the widespread adoption of digital devices, customer expectations have changed and continue to do so at a rapid pace. Today, convenience is a top priority among customers. Many people either don’t want or are unable to spend time visiting a physical location or to talk on the phone to manage their daily lives – including their wealth. Instead, they prefer to manage everything from the convenience of their homes or offices.
For financial institutions to remain relevant in wealth management, they must adapt to the new digital times by transforming the way they operate. This digital transformation is taking place now. Wealth management firms are partnering with, acquiring, and even building their own technology solutions to meet the increasing demand for a better customer experience that robo-advisors offer.
Ally Financial’s acquisition of TradeKing, Blackrock’s purchase of FutureAdvisor, and U.S. Bank’s partnership with FutureAdvisor show just how critical robo-advising has become when it comes to wealth management. Other financial institutions, such as Vanguard, Bank of America, and E*TRADE, have also poured a tremendous amount of money into developing their own robo-advising solutions.
While the vast majority of assets are still with traditional financial institutions, this is changing. More and more, individuals are leveraging robo-advisors due to their convenience, ease of use, affordability, and transparency. As people learn about their options with robo-advising, we will likely see that portion of the market grow in 2017.
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