Despite increasing competition from traditional financial institutions, data gathered by LearnBonds.com suggest digital advice technologies will see significant asset growth in coming years.
The researcher expects assets managed by robo-advisers to grow 47% year-over-year to reach $1.4 trillion globally in 2020. By 2023, LearnBonds expects robo-adviser assets under management to reach $2.5 trillion.
According to the robo-adviser market outlook from Statista, AUM at robo-advisers totaled $240 billion in 2017. The market quadrupled over the last 2 years to reach $980.5 billion.
The United States, home to digital advice startups like Betterment, Wealthfront and Personal Capital, continues to lead the automated investing marketplace. Three-quarters of robo-adviser AUM is U.S.-based, and LearnBonds expects the market to reach $1 trillion this year. Second-ranked China is around $700 billion behind.
The numbers are in line with similar research from Aite Group, which found assets at U.S.-based digital advisers grew 10% over the first three quarters of 2019 and will reach $1.26 trillion in 2023.
Leading the growth are new digital platforms from traditional financial services firms. Vanguard Personal Advisor services remains the biggest robo in terms of AUM, while products from discount brokerages account for 35% of the market.
Banks see digital advice as a way to encourage customers to invest cash in checking and savings accounts. Citi became the latest bank to enter the market last week with the introduction of its Citi Wealth Builder product.
Chicago-based Mesirow Fiduciary Solutions adds flexPATH's plan-level outsourced fiduciary book, boosting its retirement market reach to $164 billion.
Also, Raymond James's employee advisor channel adds breakaways from Wells Fargo and Stifel, while UBS welcomes an ex-Morgan Stanley duo in Indiana.
It promised guaranteed principal and 10% monthly returns. The SEC says it invested nothing.
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