Financial Advisor IQ - Rise of the Machine: Robo-Advisors Plot to Take Over
According to a MyPrivateBanking.com study cited by InvestmentNews, the collective robo-advisor asset figure is expected to grow from $14 billion (2014) to $225 billion within the next five years. Outside of developing procedures to better allocate investments strategies, robo-advisors are now also delving into investor-behavior analysis in order to grasp a better understanding of how to compete with their human counterparts.
The automated-advice industry is pushing firms to invest money in researching areas that were once thought to only be human FAs territory. InvestmentNews posts that financial firms and traditional advisors, such as United Capital, are pouring millions of dollars into software development aimed at automating client response into financial plans within a minimum amount of time. Venture capitalists who have backed the likes of Twitter and Instagram have also poured $225 million into digital financial platforms, such as Betterment and Wealthfront.
Deborah Fox, Chief Executive and Founder of Fox Financial Planning Network, responds to the rise of the robo-advisor and tells InvestmentNews that “advisors who don’t graft these new technologies into their practices will fall by the wayside."
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