Robo advisors look beyond wealth creation to automated personal financial advice - Muckle

In terms of its adoption of robo advice the US got the drop on Europe and the early arrivals at the robo advisors ball are now looking ahead at a whole raft of ways in which to engage an audience in cyberspace. Start-ups such as Wealthfront and Betterment were the pioneers in the robo advice space aiming to democratise investment by offering simple, low cost automated investment advice. More recently, big banks there including Goldman Sachs, Wells Fargo and Morgan Stanley have joined the fray, attracted by the ability to serve customers at a lower cost than with human wealth advisers. Whereas one of the key challenges facing the start-ups is the cost of customer acquisition, incumbents already have a large client base to market additional services to, and the advent of cyborg or hybrid advisers has breathed new life into the financial adviser sector that many feared could be wiped out by automated advice. Robo-advisers account for a small piece of the US wealth management industry, currently overseeing roughly $200 billion of client assets; however, it is predicted that figure will mushroom to $2.2 trillion by 2020, with a supportive regulatory environment and cost pressures on traditional advice.