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Robo Advice: Revolution or Evolution?

Robo Advice: Revolution or Evolution?

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The Robo Advice: Revolution or Evolution? report provides strategists, marketers and senior managers with the critical information they need to assess the rapidly developing for automated investment and financial advice. Robo advice is one of the most important trends in the market, and this report gives a comprehensive assessment of the based on discussions with all the leading players globally.


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Description

The Automated Financial Advice report covers all the vital information and analysis required to help you enter into or expand in the robo advice market. It is broken into the following sections:
The Executive Summary gives the key take-aways from the report
The ‘What is Robo Advice’ section looks at what defines a robo advice offering, the difference between automated financial advice and automated investment management, and why robo advice is gaining so much media and investment interest.
The ‘Emerging Business Models’ section looks at different approaches being taken by players, the challenges and opportunities they face and suggests some of the short, medium and long term scenario for this growing market.
The ‘What Will the Winners Look Like?’ chapter gives advice on the key success factors in the market, including segmentation, differentiation, customer centricity, gamification and stimulus, virtualisation, and big data.
The ‘Size and Growth of the Global Market’ section looks at the size of the market, its explosive potential and the drivers behind this.
The USA, UK and Australia market chapters look at how at the leading robo advice markets, how they developed, and the unique competitive and regulatory landscape in each geography.
The Appendix includes profiles of a large number of robo advice companies, including an overview of each company and its offering, its market positioning, developments and the customer journey it offers.

Reasons to Purchase The Report

  • Develop strategies based on what robo advice is and what it means in today’s market.
  • Choose your approach to the market based on the industry’s emerging business models.
  • Plan innovative strategies based on the ‘What Will The Winners Look Like’ section.
  • Facilitate decision making on the basis of forecast market data.
  • Benchmark performance against key competitors by understanding their market positioning, offerings, portfolios and workflows.
  • Identify investment opportunities.
  • Target your key markets with detailed market, competitive, regulatory and trend information for the US, UK and European, and Australian markets.
  • The report supports your internal and external presentations with reliable high quality data, analysis and 50 attractive and informative graphics.
Additional information
Markets Covered:

Robo advice, automated financial planning, financial advice, brokerage, fund platforms

Companies profiled:

Betterment, Financial Guard, FutureAdvisor (a BlackRock Company), Intelligent Portfolios from Charles Schwab, Inc., LearnVest Inc., Personal Capital, SigFig Wealth Management LLC, Vanguard PAS, Wealthfront, Inc, WiseBanyan, Inc, Easy Folio, eValue (Investment Solutions), Fintego Managed Depot, Ginmon GmbH, Marie Quantier, MoneyFarm, Nutmeg Savings & Investment Limited, Parmenion (Aberdeen Asset Management), Quirion (Quirin Bank AG), Scalable Capital, True Wealth Inc., vaamo Finanz AG, Wealthify, Wealth Objects Limited, Wealth Wizards, Yomoni, Clover.com.au, Decimal Software Ltd, Ignition Wealth (Ignition Direct), QuietGrowth, Stockspot.

Geographies:

Australia, Europe, UK, USA.

Time series:

Current and five years forecast assets under management.

Infographics:

fifty high-quality conceptual and data driven illustrations.

Analysis:

Definitions and segmentations, business models, success factor analysis, market drivers, market background, competitive and regulatory characteristics. Company positioning, developments and workflow analysis.

Research:

The report is based on 25+ interviews with many of the leading players in the global robo advice market. It draws on exhaustive secondary research.

Authors:

The report’s authors draw on over 60 years of collective senior research experience in the financial and technology sectors.

Table Of Contents
1. Executive Summary 14
1.1 Robo advice is not a new concept, but is gaining a lot of global attention 14
1.2 There are far fewer pure robos than the media would have us believe 14
1.3 Focus is on automated investment management; there are very few automated advice propositions 15
1.4 Early movers built from scratch, but start-ups are now seeking to build partnerships with established players 17
1.5 Low cost automated investments will become the core building block of financial planning 18
1.6 Many of the ‘me too’ automated investment propositions will fall by the wayside unless they continue to develop 18
1.7 The market for automated investment management services will grow significantly, but hybrids will be the dominant model 19
1.8 The addressable market for virtual advice is huge, but very few propositions have come forward to meet this demand 20
2. What is robo advice? 20
2.1 Robo advice: a catch all term for remotely delivered wealth management 20
2.2 Defining ‘robo advice’ 22
2.3 Automated investment management solutions are the dominant model; but how automated are they? 24
2.4 There are only a handful of automated financial planning propositions in the market today 27
2.5 Why is ‘robo advice’ under the spotlight? 30
2.6 Propositions are only as good as the algorithms 34
3. Emerging Business Models 38
3.1 Pure play start-ups have led the charge to date 38
3.2 The cost of acquisition is the elephant in the room for start-ups 39
3.3 Re-focus on the B2B market to drive profitability 40
3.4 Industry stalwarts are now seeing the potential of automation; and have important strategic advantages over the start-ups 42
3.5 Which play will the current incumbents make – build, partner, or buy? 45
3.6 In the B2B space, robo for advisers is nothing new, but some are now embracing the opportunity to expand the reach of their business 48
3.7 Robo advice will place widespread pressure on margins and fees 51
3.8 The impact on the advice market will take longer to play out, and will result in advisers ultimately moving up the advice value chain 53
4. What will the winners look like? 54
4.1 Many of the ‘me too’ automated investment propositions will fall by the wayside unless they continue to develop 54
4.2 Automated investment propositions will need get much better at targeting clearly defined, profitable consumer segments 56
4.3 Differentiation needs to be on a feature that the mass market consumer can understand 57
4.4 A truly customer-centric approach will be required to shift customers from a transactional to an ongoing relationship 59
4.5 Winning propositions will make better use of behavioural economics to enhance the user experience and increase conversion and retention rates 62
4.6 Winning propositions will need to engage consumers in new ways, using visual stimulus to create emotional responses 63
4.7 Gamification can ‘reward’ consumers for building knowledge; virtual reality can allow them to test drive future outcomes in a safe environment 65
4.8 Winning solutions will blend the human touch with automation 66
4.9 Next generation ‘cyborgs’ will shift the boundary between human and robot within five years – think ‘virtual advice’ 71
4.10 New revenue models to reflect what consumers are actually paying for? 73
4.11 Big data, data giants and analytics: The final frontier 74
4.12 Robo 3.0 has the potential to do so much more than personal finance 77
5 Size and Growth of the Global market 79
5.1 Robo advice growth is about to take off 79
5.2 Drivers for global growth 80
5.3 Robo advisors are everywhere, but the US still dominates the global landscape 83
5.4 The US still presents the best market opportunity and will continue to drive global growth 84
5.5 Global forecasts for robo advice 86
6 Country Profile: USA 89
6.1 Introduction 89
6.2 Market Background and Development History 89
6.3 Market Size and Growth 94
6.4 Competitive Landscape 99
6.5 Regulatory Environment 105
6.6 Future Prospects 107
7 Country profile: UK 110
7.1 Introduction 110
7.2 Market Background and Development History 110
7.3 Market Size and Growth 114
7.4 Competitive Landscape 119
7.5 Regulatory Framework 123
7.6 Future Prospects 126
8 Country Profile: Australia 128
8.1 Introduction 128
8.2 Market Background and Development 128
8.3 Market Size and Growth 133
8.4 Competitive Landscape 136
8.5 Regulatory Environment 141
8.6 Future Developments 144
9 Appendix: US Company Profiles 145
Betterment 147
Financial Guard 160
FutureAdvisor (a BlackRock Company) 170
Intelligent Portfolios from Charles Schwab, Inc. 182
LearnVest Inc. 194
Personal Capital 203
SigFig Wealth Management LLC 213
Vanguard PAS 224
Wealthfront, Inc. 231
WiseBanyan, Inc. 248
10 Appendix: UK and European Company Profiles 257
Easy Folio 259
eValue (Investment Solutions) 269
Fintego Managed Depot 273
Ginmon GmbH 286
Marie Quantier 295
MoneyFarm 308
Nutmeg Savings & Investment Limited 319
Parmenion (Aberdeen Asset Management) 330
Quirion (Quirin Bank AG) 345
Scalable Capital 355
True Wealth Inc. 369
vaamo Finanz AG 379
Wealthify 390
Wealth Objects Limited 400
Wealth Wizards 403
Yomoni 409
11 Appendix: Australian Company Profiles 420
Clover.com.au 421
Decimal Software Ltd 424
Ignition Wealth (Ignition Direct) 431
QuietGrowth 446
Stockspot 456
Disclaimer 465
Appendix 466
Research Methodology 466
Abbreviations 466
Currencies 466
Research Inquiries 466
The Business Research Company 466

List Of Figures
Figure 1: True robo solutions provide a recommendation based on personal information the customer has provided
Figure 2: Automated investment management solutions today rarely deliver an end-to-end automated solutions across the entire advice value chain
Figure 3: Robo advice solutions today are only scratching the surface of meeting consumers’ financial needs
Figure 4: Robo advice: disruptor, enabler or market maker
Figure 5: Understanding the customer: a comparison of the questionnaires used by some of the leading automated investment management solutions
Figure 6: Understanding the customer: A sample of typical questions asked
Figure 7: Comparing asset allocations for a moderate risk profile for selected automated investment managers
Figure 8: Robo entrepreneurs with a technology or investment banking background
Figure 9: From B2C Disruptors to B2B2C Enablers
Figure 10: Robo 1.0 to Robo 2.0
Figure 11: Examples of build, buy, or partner models
Figure 12: Australian technology provider Decimal Software provides a white labelled solution to financial institutions
Figure 13: The UK’s Money on Toast has switched from an automated investment management proposition to providing a low cost remote advice service
Figure 14: Average AUM per client for selected robo advisors
Figure 15: New ways of communicating with consumers are needed: Bloom in the US
Figure 16: Behavioural biases that are inherent in pension decumulation decision making
Figure 17: Robo advice of the future: shifting from push to pull
Figure 18: Robo Advice 3.0
Figure 19: Robo advisors of the future may bring together families and other groups, and offers these groups solutions that span multiple aspects of their life
Figure 20: The Six D’s of Exponential Technology
Figure 21: Drivers for the development of the robo advice market
Figure 22: Online population by age and geography
Figure 23: Assets under management by geography
Figure 24: Example robo advice proposition by geography
Figure 25: Market Opportunity Map
Figure 26: A number of robo advisors in the US has climbed rapidly since 2011: Examples of recent robo advisor launches in the US
Figure 27: Many robo advisors in the US are hybrids, with elements of their processes being assisted by a human. Some have human advisors on hand to assist customers
Figure 28: Preference for human, automated vs. hybrid advice amongst US consumers
Figure 29: Assets under management of the leading robo advisors in the US, $bn
Figure 30: Robo advice awareness and usage by age in the US, 2015
Figure 31: US households by assets (excluding primary residence) in 2015, thousands
Figure 32: Examples of US robo advisors by distribution channel
Figure 33: Level of automation across the advice value for selected US robo advisors
Figure 34: A comparison of the prices charged by selected US robo advisors
Figure 35: A comparison of features provided by selected US robo advisors
Figure 36: Type of financial advisor experience US investors want
Figure 37: Increase in assets under management for the three largest robo start-ups in the US, compared to the next nine largest start-ups, May 2015 to March 2016
Figure 38: A number of robo advice propositions have come to market in 2016
Figure 39: UK robo advisors by distribution channel
Figure 40: Many robo advisors in the UK are hybrids, with elements of their processes being assisted by a human. Some have human advisors on hand to assist customers
Figure 41: UK robo advisors by level of automation across the advice value chain
Figure 42: A comparison of the prices charged by selected UK automated investment management propositions
Figure 43: Comparative performance of property over a 10 and 20 year time horizon
Figure 44: Stockspot’s suitability warning messages
Figure 45: A number of robo advice propositions have come to market recently
Figure 46: Household assets by category, A$bn, 2016
Figure 47: Australian robo advisors by level of advice and level of automation
Figure 48: QuietGrowth undercut Stockspot for all account sizes upon entry
Figure 49: Fee structures for selected Australian robo advisors
Figure 50: Map My Plan pricing and proposition (May My Plan website, June 2016)
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