Robo-advice could hit $1trn in AUM, study finds

By Moriah Costa on Wednesday 27 September 2017

Alternative LendingSavings and Investment

Automated technology is taking off in the US and will only grow, a report from Aite Group found.

Robo-advice is growing and won’t see its market size plateauing any time soon.

year-long study from Aite Group estimates that in America, robo-advice will hit $1trn in assets under management by 2020.

In addition, the number of robo-advice clients will rise from 1.8 million in 2016 to 17 million by 2021. Already, the number of automated wealth management accounts have tripled since 2015. The report predicts that 14 per cent of discretionary investing will be on digital platforms by the end of 2017.  

“The U.S. digital advice market is entering a growth phase that is providing ample thrill to market observers and participants, and both domestic and foreign market participants look to the U.S. market to answer some basic questions that impact the global trend,” said Javier Paz, a senior analyst at Aite and author of the report.

The Boston-based consulting firm also predicts that most of the automated advice business will be held by incumbents, such as investment banks, with only 7 per cent of the sector held by startups like Betterment. 

The boom in investing is likely to be driven by millennials and the popularity of micro-investing apps like Acorns, the study added. And as people become comfortable with artificial intelligence, such as Apple’s Siri or Amazon’s Alexa, robo-advice will only become more popular, Paz said.

The research was conducted over a year and included industry interviews and analysis of public filings in the US.

This article first appeared on

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