What Factors Propelled The Growth Of The Robo Advisory Market In The Past?
The robo advisory market has seen considerable growth due to a variety of factors.
• The size of the robo advisory market has seen exponential growth in the last few years. It is projected to increase from $61.75 billion in 2024 to $91.97 billion in 2025, presenting a compound annual growth rate (CAGR) of 48.9%.
Factors such as cost efficiency, the democratization of finance, market awareness, and acceptance have contributed to this growth during the historical period.
What Is The Projected Growth And Market Size For The Robo Advisory Sector?
The robo advisory market is expected to maintain its strong growth trajectory in upcoming years.
• In the near future, the market size for robo advisory is projected to witness a tremendous increase. It is estimated to reach a value of $468.49 billion by 2029, with a CAGR of 50.2%.
Factors contributing to the predicted growth during this period include the regulatory environment, merging with traditional services, worldwide economic trends, and measures for cybersecurity. Furthermore, trends expected during the forecast period encompass the adoption of customization and personalization, technological progress, hybrid models, advancements in AI and machine learning, sustainable and ESG investing, crypto and alternative investments, along with partnerships and collaborations.
What Are The Core Factors Supporting Growth In The Robo Advisory Market?
The surge in financial services digitalization is driving the expansion of the robo advisory market. Digital technologies like artificial intelligence (AI), cloud computing, blockchain, and fintech are revolutionizing the financial sector, providing easier fund accessibility and employing automated tactics to enhance customer experiences. For instance, the Australian Banking Association, a representative trade group of the Australian banking industry, stated in June 2023 that Australians had predominantly transitioned to digital banking, with 98.9% of interactions occurring digitally. Thus, the growth of the robo-advisory market is being fueled by the increased digital integration in financial services.
What Are The Major Segments Within The Global Robo Advisory Market?
The robo advisory market covered in this report is segmented –
1) By Service Type: Direct Plan-Based Or Goal-Based, Comprehensive Wealth Advisory
2) By Provider: Fintech Robo Advisors, Banks, Traditional Wealth Managers, Other Providers
3) By Business Model: Pure Robo Advisors, Hybrid Robo Advisors
4) By End User: Healthcare, Education, Retail, Other End Users
Subsegments:
1) By Direct Plan-Based Or Goal-Based: Retirement Planning, Education Savings Plans, Investment Goal Setting, Tax Optimization Strategies
2) By Comprehensive Wealth Advisory: Holistic Financial Planning, Asset Management Services, Estate Planning, Portfolio Diversification Strategies
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Which Trends Are Expected To Transform The Robo Advisory Market?
The robo advisory market is being notably molded by the advancements in technology. Innovations in fields such as advanced analytics, artificial intelligence, and natural language processing are set to heighten the efficiency of robo-advisories. This, in turn, will allow robo-advisors to amplify their value proposition and wield more influence throughout the value chain. Illustrating this, in March 2022, flatexDEGIRO AG, a German online broker, declared it had sealed a Memorandum of Understanding (MoU) to broaden its enduring B2B affiliation with digital asset management company Whitebox. The two firms are collaborating to offer completely digitized investment services to FlatexDEGIRO customers, which can be expected to roll out at Flatex Germany in summer 2022. Whitebox is an autonomous robo-adviser for retail investors based in the US.
Who Are the Key Players in the Robo Advisory Market?
Major companies operating in the robo advisory market include:
• Betterment LLC
• Charles Schwab & Co. Inc.
• Wealthfront Corporation
• Personal Capital Corporation
• Bambu Labs Inc.
• Blooom Inc.
• Ellevest Inc.
• FutureAdvisor Inc.
• Nutmeg Saving and Investment Limited
• SigFig Wealth Management LLC
• The Vanguard Group Inc.
• Social Finance Inc.
• Hedgeable Inc.
• WiseBanyan Inc.
• AssetBuilder Inc.
• Ally Financial Inc.
• Axos Invest Inc.
• Scalable Capital Limited
• Moneyfarm Ltd.
• Acorns Grow Incorporated
• United Income LLC
• T. Rowe Price Associates Inc.
• Rebellion Research
• Ginmon Vermogensverwaltung GmbH
• Invesco Ltd.
• WisdomTree Investments Inc.
• Northern Trust Corporation
• First Trust Advisors LP
• VanEck Associates Corporation
• ProShares Advisors LLC
• Global X Management Company LLC
• Direxion Investments
What Is The Most Dominant Region In The Robo Advisory Market?
North America will be the largest region in the robo advisory market in 2024. Asia-Pacific is expected to be the fastest growing region in the forecast period. The regions covered in the robo advisory market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
