next-gen investing

Incumbent Firms Leading Surge in Digital-Advice Assets

The key trends/players in the automated advice market

NEW YORK, December 10, 2016, /PRNewswire/ — Incumbent firms have embraced digital advice and are driving considerable growth and consolidation in the market, according to Corporate Insight’s new study on the robo advice market.

Next-Generation Investing: The Incumbents Arrive explores key trends and opportunities in this space and assesses the automated investing and advice services offered by the industry’s leading incumbent firms, as well as 22 investing- and personal finance-related startups. The report also analyzes how today’s digital advice users differ from other investors, drawing on proprietary survey data.

Today, the top 16 digital managed account providers hold $67.5 billion in assets, a 110% increase since July 2015. The three leading startups in this space – Betterment, Personal Capital and Wealthfront – account for $13.4 billion of that total, while Vanguard Personal Advisor Services and Schwab Intelligent Portfolios now hold $51.2 billion. The remaining $2.9 billion is divided among such startups as Blooom, FutureAdvisor and SigFig, as well as incumbent firms E*TRADE and TradeKing.

“Brokerages and asset management firms have finally embraced the digital advice opportunity, with hybrid firms leading the charge,” said Sean McDermott, senior analyst at Corporate Insight. “After spending years watching from the sidelines, incumbents are responding with their own low-cost, entry-level service offerings to broaden their customer base and protect market share.”

Since 2015, a dozen leading wealth management and asset management firms – including BlackRock, Invesco, UBS and Wells Fargo – have acquired, invested in or partnered with fintech providers to bring digital advice solutions to either their clients or their advisor workforce. Corporate Insight expects to see the fruits of these deals come to market in 2017.

Other industry trends covered in the study include:

  • Digital advice on the global stage: Over the past year, automated investing services have gained traction across the globe, making investing available to an extensive and diverse population that previously did not have access to many wealth management options. The report examines automated wealth management markets in the Americas, Europe, Asia, the Middle East, Australia and Africa.
  • Customer acquisition strategies and product sophistication: Digital advice providers are creating more sophisticated services – such as active management, tax-loss harvesting, holistic advice and income generation – in an attempt to broaden their appeal. Some providers target specific markets, such as women and socially responsible investors.
  • Fintech aimed at insurance and annuities: The fintech movement extends far beyond the wealth management industry, with startups addressing virtually every aspect of financial services, including loans, payments, credit cards and small business services. The life insurance industry in particular has seen a number of technology-based startups, like Haven Life and ValoraLife, take aim at disrupting the traditional methods of marketing and distributing insurance.

For more information, and to receive a copy of the report or to schedule an interview with the study’s authors, visit here.




About Corporate Insight
Corporate Insight provides competitive intelligence, consulting and user experience (UX) research to the nation’s leading financial services firms, insurers and educational institutions. For more than two decades, the firm has published customer experience-focused research and has advised clients on key competitive issues with a focus on helping them improve their digital capabilities. The firm offers subscription-based Monitor Services in 14 verticals, including brokerage, healthcare and alumni relations, along with custom research and consulting services, digital capabilities audits, special studies and UX research.