Robo Advisors and the Investment Management Industry

The Future of Robo Advisors

Robo advisors are on the rise and they are winning in the investment management industry. When they made their appearance on the market, they were thought to be the thing that will most definitely steal the market from financial advisors and investors, which was true to a certain extent. It turns out that they actually benefit both traditional financial advisors and investors, and we will explore those benefits.

Friend or Foe

However, the general public awareness about robo advisors is still not that good, but it is growing at an incredible pace. It is assumed that they are going to change the world of investment and financial advising, and the way we perceive the market completely.

They have become quite a hit with wealthy investors, but are they here to stay? While the answer to this question is still unknown and it still remains to be seen what will happen with these investment platforms, so let’s look at what all the fuss is about.

What Are Robo Advisors?

robo-investor

Robo advisors are online platforms that use algorithms based on the modern portfolio theory to provide financial advice online and manage portfolios. They represent a brand new way of investing and they also offer asset allocation and goal setting for those who are just starting out. These automated investment services are an amazing investment tool for the market, and the greatest thing about them is their price.

They charge less than half the fees of a traditional financial advisor, which adds up to at least one per cent of the assets that are under management. Another great thing about robo advisors is that, apart from using modern technology, they also use traditional methods, such as the aforementioned modern portfolio theory, exchange traded funds, risk tolerance and many more.

Do They Really Benefit Financial Advisors and Investors?

The fact is that robo advisors don’t benefit each and every financial advisor and investor on the market. This is due to the fact that not all of them are good at their jobs. This is actually a good thing for the overall market, since only the most affluent advisors and investors will remain active and able to tackle finances with the help of robo advisors.

This is extremely important, because of the fact that customers want to speak to an actual person when they need financial advice, while they also want top-notch technology to protect their assets. That is the main reason behind the importance of robo advisors and their growing popularity.

Since only the best financial advisors and investors will remain on the market, they will be able to focus more on increasing their productivity and becoming more effective at completing all their tasks, which is definitely a great benefit for both them and the people they do business with.

The Popularity of Robo Advisors among Wealthy Investors

With their low price, more and more wealthy investors are beginning to try out robo advisors, resulting in a grand money-making business. Investors with pretty large portfolios are putting their money into the “hands” of these automated services, and the numbers just keep going up.

This huge success will most certainly make traditional financial advisors want to work harder on become better and smarter, thus becoming great assets for the overall market. Likewise, banks will start using robo advisors to complement their sales and aid their employees, thus helping their customers in a much more efficient way.

The race for success is coming. The rise of robo advisors and their improvement will lead to the improvement of every financial advisor and investor out there. Traditional brokerages, for Instance, are under a lot of pressure because of the cost of their services, since robo advisors charge much less.

They are going into survival mode, which will certainly result in them lowering the cost of the services they offer, that is, if they wish to stay in the money-making business. They will also most certainly have to implement robo advisors in their investment management process.

[easy-tweet tweet=”Jay Welker, the president of Wells Fargo’s private bank said: “We think of robo as serving multi-generational families”, which is absolutely true.” via=”no” hashtags=”#AI #Investing”]

Robo advisors show real promise and they are becoming more and more popular, not only among millennial’s and small investors, but also among wealthy investors. Robo advisors are the future of the world of investments, and they are becoming the next big thing on the market.

By Mike Brown

Metasploit-Penetration-Testing-Software-Pen-Testing-Security
Vulnerability Scanners Cyber security vulnerabilities are a constant nuisance and it certainly doesn't help with the world in a current state of disarray and uncertainty. Vulnerabilities leave businesses and individuals subject to a wide range ...
Jen
VoIP and PBX Phone Systems The cloud is already providing businesses with such a range of advanced tools and services, optimizing communication across channels, improving global cooperation, and supporting collaboration between teammates and partners both ...
Alex Tkatch
Best Practices for Designing and Executing a Product Launch Nothing in entrepreneurial life is more exciting, frustrating, time-consuming and uncertain than launching a new product. Creating something new and different can be exhilarating, assuming everything ...
Stacey Farrar
Document Migrations Require More Diligence Data creation has risen dramatically in recent years and shows no signs of slowing. According to analyst firm IDC, widespread remote work led to a spike of new data in ...
Gary Bernstein
Secure Remote Authentication When employees are working remotely, they need to be able to access company resources and applications just as if they were in the office. This means that remote authentication needs to be ...

SECURITY TRAINING

  • Isc2

    ISC2

    (ISC)² provides IT training, certifications, and exams that run online, on your premises, or in classrooms. Self-study resources are available. You can also train groups of 10 or more of your employees. If you want a job in cybersecurity, this is the route to take.

  • App Academy

    App Academy

    Immersive software engineering programs. No experience required. Pay $0 until you're hired. Join an online info session to learn more

  • Cybrary

    Cybrary

    CYBRARY Open source Cyber Security learning. Free for everyone, forever. The world's largest cyber security community. Cybrary provides free IT training and paid IT certificates. Courses for beginners, intermediates, and advanced users are available.

  • Plural Site

    Pluralsite

    Pluralsight provides online courses on popular programming languages and developer tools. Other courses cover fields such as IT security best practices, server infrastructure, and virtualization.