According to Juniper Research, current robo-advisor revenues were estimated at $1.7 billion in 2017. By 2022, the firm is also estimating that those revenues will jump to over $25 billion. Current AUM at robos was $330 billion as of 2017. That, too, is expected to dramatically increase to over $4.1 trillion within 5 years according to the report. Robos are the bain of wealth managers, and typically command much lower fees, which are estimated to be around o.6% on average by 2022. We've talked about robos a lot in the past, and all we can do is continue to encourage wealth managers to amp up their technology suite so they can compete with this new, ever-expanding category.
(Cindy Taylor/Publisher)
BASINGSTOKE, England--(BUSINESS WIRE)--A new study from Juniper Research has found that roboadvisor platform revenues will reach $25 billion by 2022, up from an estimated $1.7 billion in 2017, as the automation of wealth management revolutionises the way individuals invest.
The new research, Fintech Futures: Market Disruption, Leading Innovators & Emerging Opportunities 2017-2022, found that roboadvisors will make investments more compelling to HNWIs (High Net Worth Individuals) and lower income individuals, with average fees estimated as low as 0.6% of assets under management in 2022, with disruption from new players such as
Moneybox
and
Nutmeg
.
Read more in Juniper’s complimentary whitepaper, The Future of Fintech – Disrupt, Collaborate or Die.
Roboadvisors Widening Appeal of Wealth Management
Juniper found that roboadvisors are broadening the appeal of the wealth management market, with their delivery method via intuitive smartphone apps making the investment process far more convenient, offering a compelling reason for millennials to invest.
The study found that this will drive total assets under management by roboadvisors upwards twelvefold, to $4.1 trillion in 2022, from an estimated $330 billion in 2017.
Juniper predicted that roboadvisors will become increasingly more automated over time, as AI & machine learning based approaches mature. Research author Nick Maynard added:
“The technologies powering roboadvisors will mature to such an extent that they move from their current human supervised role to being utilised in a fully automated way. This will be aided by track records of performance automated roboadvisor systems are establishing.
Potential Savings From Automation Tempting Existing Players Into Investment
While new entrants are disrupting the market, traditional wealth management players are also adopting new technologies to evolve their business models.
Providers such as
BlackRock
and
Aberdeen Asset Management
have invested in roboadvisor start-ups, such as
Scalable Capital
,
FutureAdvisor
and
Parmenion
. The study found that the appeal of these technologies is clear to established players, as automated systems, even in a limited role, will enable significant cost reductions and therefore increase their overall quality of service and profitability.
Juniper Research is acknowledged as the leading analyst house in the digital commerce and fintech sector, delivering pioneering research into payments, banking and financial services for more than a decade.
Full Press Release at BusinessWire