Robo advisors are meant to be simple and automated to keep costs low and allow your wealth to accumulate; in looking at the top four firms in the market the Wall Street Journal found that humans choose what goes into the portfolios; this begs the question whether investors are aware of this human intervention; the WSJ takes a closer look at how Vanguard Group's Vanguard Personal Advisor Services (PAS), Betterment, Wealthfront and Schwab Intelligent Portfolios allocate their clients money; while robo advisors are deemed a simple solution they might not be and investors should understand how their money is allocated. Source
UK robo advisor Scalable has doubled its assets under management in the last three months to EUR 200 million ($213 million); this includes approximately 5,000 client portfolios with an average value of EUR 40,000 ($42,659); the firm says it continues to grow steadily adding EUR 1 million ($1.07 million) in assets under management per day; Scalable launched in the UK in the summer of 2016; it has since expanded to Germany and Austria and has reported significant growth from a partnership with Siemens Private Finance for employee investment plans. Source
This Forbes piece digs into how financial services companies might be impacted by the Coronavirus; both Visa and Mastercard have...
One of the key pieces to the new MIFID II regulations is more transparency around investment fees; robo advisors have made their products more transparent and less complex, seeing that traditional advisors are now forced to be more transparent robo advisors might begin seeing business headed their way; before MIFID II investors incurred costs which were not required to be disclosed for buying and selling of shares, taxes, custody, slippage and more; implementation has been slow as incumbents try to adjust to the new regulatory requirements. Source.
Source reports on robo advice services at Vanguard; the firm's Personal Advice Services is a hybrid robo advice offering with $83 billion in assets under management; it is anticipated that it will be the first digital platform to cross $100 billion; firm is adding certified financial planners to its call centers for clients in Scottsdale, Arizona and Charlotte, North Carolina as an enhanced hybrid offering. Source
UBS has broadly launched its robo advisor service SmartWealth after a limited launch in October; the solution presents another robo advisory service offering by an incumbent financial services provider; portfolio fees range from 1% to 2% with an investment threshold of 15,000 British pounds ($18,500); according to data from Business Insider, Vanguard's Personal Advisor Services leads the robo advisor market with assets under management of $41 billion followed by Schwab with $10 billion and Betterment with $6.2 billion. Source
Yomoni has raised $5 million from Crédit Mutuel Arkéa and Iéna Venture; the firm provides a robo advisory service in France where the concept of robo advice is still very new; the firm will use the funds to expand its workforce and add new features; fees for the service are approximately 1.60% per year; the firm currently has $12.9 million in assets under management and is targeting $1.08 billion by 2020 with plans to potentially expand in Europe. Source
UK based startups and big banks have been pushing their online investment advisors through ads as they try to gain new clients; after seeing some of the startups have early success big banks started to get into the market this past year; the upcoming ISA deadline on April 5th has companies pushing their marketing spend in recent months with hopes it will pay off in new customers and cash. Source.
Robo advisors have been increasingly gaining market share however Morgan Stanley says they are not likely to overtake incumbents; in a research note the bank says it is predicting a $6.5 trillion market globally for robo advice by 2025; despite the initial growth and market opportunity for robo advisors, the competitive landscape shows investors will still demand human advice; as a result, the hybrid model for robo advice is expected to emerge in the next wave of innovation for the industry; Betterment provides a market leading example of a hybrid model with its new Betterment Plus and Betterment Premium services announced in January. Source
SoFi was in talks to acquire clearing and custody firm Apex but the talks failed and the lender instead made...