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2021
Robo Advisory Market

Robo Advisory Market

By Business Model (Pure Robo Advisors and Hybrid Robo Advisors), Service Provider (FinTech Robo Advisors, Banks, Traditional Wealth Managers, and Others), Service Type (Direct Plan-Based/Goal-Based and Comprehensive Wealth Advisory), and End User (Retail Investor and High Net Worth Individuals [HNIs]): Global Opportunity Analysis and Industry Forecast, 2020-2027
Update Available On-Demand

Report Code: A01775
Pages: 232
Jan 2021 | 28839 Views
Author(s) : Pramod B, Monica C , Vineet K
Tables: 128
Charts: 48
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COVID-19

Pandemic disrupted the entire world and affected many industries.

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Robo Advisory Market Outlook – 2027 

The global robo advisory market size was valued at $4.51 billion in 2019, and is projected to reach $41.07 billion by 2027, growing at a CAGR of 31.8% from 2020 to 2027. Robo advisor is a software that helps investors to manage their funds, portfolios, and investments online with less human intervention. It collects all the relevant information such as investment timeline, risk tolerance, and returns with respect to their savings from clients through an online questionnaire. 

With an unprecedented COVID-19 health crisis,the robo-advisory services witnessed significant growth, owing to surge in adoption of robo-advisors for efficient wealth and assets management in highly volatile markets during pandemic situation.

Robo advisor makes use of algorithm calculations to analyze the data and provide comprehensive asset allocation approach that meets with the investor’s goals. The robo advisor industry has recorded continuous investments for its developments and has become a massive contributor to the economic growth. Although the COVID-19 outbreak is negatively affecting the global economy, SMEs, stock markets, and entire wealth management services, the robo advisory market has experienced a massive surge, due to higher demand for optimized wealth management during this pandemic.

Robo Advisory Market

Robo advisory services offer multiple advantages over traditional modes of investments and advisory, which include high quality & low-cost portfolios, tax loss harvesting, and secure investments. Furthermore, the judgments provided by robo advisory platforms are based on real-time statistics & current economic conditions, which eliminates the chances of credit risks and enabled its adoption among consumers. According to Corporate Vision Magazine, huge surge has been registered in sign-ups for robo advisory in the first quarter of 2020 with 3.1% increasing rate. For instance, Vanguard reported a 14% growth in assets and 35% increase in customer numbers, whereas PensionBee witnessed an increase of 14% for robo advisory.

The key factor driving the growth of the robo advisory market trends include rapid digitalization in financial services, shift in preference from traditional investment services for robot advisory, and demand for cost-effective investment advisory are the major factors that drive the growth of the global robo advisory market. However, lack of human expertise hampers the robo advisory market growth. On the contrary, untapped potential of emerging economies and surge in government support & initiatives toward robot advisory are expected to provide lucrative opportunity for the robo advisory market expansion during the forecast period.

By service provider, the robo advisory market was led by the fintech robo advisors segment in 2019, and is projected to maintain its dominance during the forecast period. Increase in adoption of robo advisors among the fintech industry to upsurge their revenue opportunity drives the growth of the market. However, the banks segment is expected to grow at the highest rate during the forecast period, owing to growing digitization among the banking sector and rise in need among the banks to support and improve their consumer needs.

Region wise, the robo advisory market was dominated by North America in 2019, and is expected to retain its position during the forecast period. The major factors that drive the growth of the market in this region include rise in adoption of advance technology for managing and controlling their financial assets and presence of key players in the U.S. However, Asia-Pacific is expected to witness significant growth rate during the forecast period, owing to rise of the digital investment, advisory landscape supported by increase in number of start-ups, and several government initiatives for FinTech development across the developing countries such as China, India, and Japan. 

The report focuses on the growth prospects, restraints, and trends of the global robo advisory market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the global car insurance market.

Robo Advisory Market
By Business Model

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Hybrid Robo Advisors segment is projected to be the most lucrative segment

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Segment Overview

The global robo advisory market is segmented into business model, service provider, service type, end user, and region. In terms of business model, the market is fragmented into pure robo advisors and hybrid robo advisors. By service provider, the market is divided into fintech robo advisors, banks, traditional wealth managers and others. As per service type, it is categorized into direct plan-based/goal-based and comprehensive wealth advisory. In terms of end user, the market is bifurcated into retail investor and high net worth individuals (HNIs). Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. 

Robo Advisory Market
By Service Provider

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FinTech Robo Advisors segment will dominate the market throughout the forecast period

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Competitive Analysis

The key players profiled in the robo advisory market report are Betterment, Blooom, Charles Schwab Corporation, FMR LLC, Personal Capital Corporation, SoFi, SIGFIG, The Vanguard Group Inc., Wealthfront Corporation, and WiseBanyan Inc. These key players have adopted various strategies, such as product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations, to increase their market penetration and strengthen their foothold in the industry. 

Robo Advisory Market
By Service Type

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Comprehensive Wealth Advisory segment will maintain the lead during 2020 - 2027

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COVID-19 Impact Analysis

The robo advisory market has witnessed significant growth in past few years. Furthermore, the outbreak of the COVID-19 pandemic is impacting the market positively, and is projected to witness huge increase in adoption among consumers in 2020. The capabilities of robo advisors to eliminate illogical behavior and poor & spontaneous decision-making during critical time in pandemic notably contribute toward the growth of the global market. 

Robo Advisory Market
By End User

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High Net Worth Individuals (HNIs) segment will secure the leading the position during 2020 - 2027

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Robo advisory services offer exposure to individuals to gain expertise in managing & diversifying their portfolio by investing into several instruments such as stocks, bonds, and certificate of deposit (CD). For instance, according to the Banking & Payment survey, despite a sharp slowdown in economic activity across the globe due to pandemic, the robo advisory market is projected to experience immense growth in the first and second quarter of 2020 with number of users of 7.8%, which is four times greater than previous year. 

Robo Advisory Market
By Region

2027
North America 
Europe
Asia-pacific
Lamea

Asia-Pacific region would exhibit the highest CAGR of 34.8% during the forecast period

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Top Impacting Factors

Rapid Digitalization in Financial Services

Digitization has been one of the most widely adopted strategies in financial services to improve core processing capabilities and offer better consumer services and insights. In addition, various organizations such as the Vanguard Group Inc. and Betterment have reportedly increased their sales percentage by focusing on digitalization of their financial services. In addition, more than half of these financial services have been associated with investments. 

Most of the investments are made through digital advisory platforms, as they offer high returns and evaluate portfolios according to the economic and market conditions. All these factors reduce the chances of uncertainty and provide instant convenient options to the investors. Thus, increase in focus of organizations on digitalizing their financial services to achieve business efficiency and better outcomes drives the growth of the robo advisory industry.

Untapped Potential of Emerging Economies

Increase in consumer expectations to gain higher returns from lower investment, lack of awareness regarding robo advisory benefits, and rise in advisory service providers in Asia-Pacific are some of the factors expected to provide lucrative opportunities for the expansion of the market. Owing to the presence of emerging economies in the region, robo service providers have an opportunity to expand their offerings and develop their existing portfolios with affordable & better returns services. Thus, rapid increase in demand for various funds such as wealth management & equity fund in this region is expected to create remunerative opportunities for robo advisory asset providers during the forecast period.

Key Benefits For Stakeholders 

  • The study provides an in-depth analysis of the global robo advisory market forecast along with the current trends and future estimations to elucidate the imminent investment pockets.
  • Information about key drivers, restraints, and opportunities and their impact analysis on the global robo advisory market size is provided in the report.
  • Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
  • The quantitative analysis of the robo advisory market share from 2019 to 2027 is provided to determine the market potential.

Robo Advisory Market Report Highlights

Aspects Details
By Business Model
  • Pure Robo Advisors
  • Hybrid Robo Advisors
By Provider
  • Fintech Robo advisors
  • Banks
  • Traditional wealth managers
  • Others
By Service Type
  • Direct Plan-Based/Goal-Based
  • Comprehensive Wealth Advisory
By End User
  • Retail Investor
  • High Net Worth Individuals (HNIs)
By Region
  • North America  (U.S., Canada)
  • Europe  (UK, Germany, France, Switzerland, Italy, Spain, REST OF Europe)
  • Asia-Pacific  (China, India, Japan, Australia, Singapore, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
Key Market Players Fincite, Betterment, Charles Schwab & Co., Inc., Ellevest, Ginmon Vermögensverwaltung GmbH, SigFig Wealth Management, Social Finance, Inc., Wealthfront Corporation, Wealthify Limited, THE VANGUARD GROUP,INC.
 

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Robo advisory is the use of online technology to manage different types of investment processes which include analyzing the portfolio of investor by using algorithm and to deliver faster and more efficient decisions to the investors. These platforms enable providers to provide efficient investment options directly to investors through software, and reduces the burdens associated with complicated process of applying and receiving funding. The technology has been widely adopted among robo advisory providers to improve productivity, to close a greater number of investment deals, and increase revenue per investment in a rapid and automated manner.

Robo advisory platforms have enabled investors and providers to invest money through paperless or electronic means, offering ease of use, enhanced consumer experience, and reduced overhead through customer verification time-savings. The growth of robo advisory market can be attributed to continuous rise in the digital investment landscape among both developed and developing economies. 

The technology has made way for several opportunities for providers to focus and manage invest processes in an automated manner and allow its customers to apply and receive returns on investment easily. Moreover, rise in government initiatives for online investment and increase in number of start-ups in developing economies positively impact the market growth. However, security issues associated with digital investment platforms hinder the growth of the robo advisory market. 

 
 

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FREQUENTLY ASKED QUESTIONS?

A. The Robo Advisory Market is estimated to grow at a CAGR of 31.8% from 2020 to 2027.

A. The Robo Advisory Market is projected to reach $41.07 billion by 2027.

A. To get the latest version of sample report

A. Rapid digitalization in financial services, and shift in preference from traditional investment services for robot advisory etc. drives the growth of Robo Advisory Market.

A. The key players profiled in the report include Betterment, Blooom, Charles Schwab Corporation, FMR LLC, Personal Capital Corporation, and many more.

A. On the basis of top growing big corporations, we select top 10 players.

A. The Robo Advisory Market is segmented on the basis of business model, service provider, service type, end user, and region.

A. The key growth strategies of Robo Advisory market players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.

A. FinTech Robo Advisors segment holds a dominant position throughout the forecast period.

A. Hybrid Robo Advisors segment will grow at a highest CAGR of 32.6% during 2020 - 2027.

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