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Robo-Advisors: An evolution,
but not extraordinary!
According to a recent article Robo-Advisors Top $1 Trillion in Assets... published by Barron's, the Advisors sector would control around $50 trillion, of which only $1 trillion would make the 'robo-advisors' segment happy. These figures are based on a recent study by Condor Capital Wealth Management, which has tracked the evolution of the financial robotics sector since its inception.
The evolution of robotics in financial advice has highlighted the high barriers to entry in the financial sector, characterized by high minimums and fees, and the resistance of traditional asset management companies. However, the wave of robo-advisors turned out to be less disruptive than predicted when Betterment and WealthFront (acquired by UBS)--the two pioneers of the sector--were launched in 2008, during the 2008-2009 crisis.
The promise of robo-advisors generated big interest in the wake of the financial crisis. Investors saw their savings plummet. Many of them needed to rethink their asset allocation and wanted help in choosing funds, without having to pay fees to Financial Advisors, which very often encompass broader financial and tax planning objectives. Moreover, many Financial Advisors often don't want to deal with...
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