GVR Report cover Robo Advisory Market Size, Share & Trends Report

Robo Advisory Market Size, Share & Trends Analysis Report By Type, By Provider, By Service Type, By End User Type, By Region, And Segment Forecasts, 2021 To 2028

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  • Report ID: GVR452007
  • Format: Electronic (PDF)
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The global robo advisory market is expected to witness significant growth over the forecast period. The major factors expected to drive the market growth include rapid digitalization in financial services and a shift in preference from traditional investment services to robo advisory. The demand from financial institutes for cost-effective investment advisory services to optimize their wealth management processes could also favor market growth. Moreover, benefits such as simple account creation, efficient goal planning and investment management, responsive customer support, and enhanced security devices are driving the demand for robo advisory platforms. According to Finextra Research, a company that provides financial technology news, the global Robo advisory industry is expected to register a growth of 53.45% from 2020-2025, which could result in revenues of USD 93.7 billion.

Robo advisory services offer various advantages such as high-quality and low-cost portfolios, secure investments, and tax-loss harvesting. Moreover, the analysis offered by robo advisory platforms is based on current economic conditions and real-time statistics, which help eliminate the chances of credit risk. Moreover, according to the Corporate Vision Magazine, a 3.1% increase in robo advice sign-ups was observed globally in the first quarter of 2020.

Robo Advisory Market Segmentation

Segments

Details

Type

Pure Robo Advisors; Hybrid Robo Advisors

Provider

Fintech Robo Advisors; Banks; Traditional Wealth Managers; Others

Service Type

Direct Plan-based/Goal-based; Comprehensive Wealth Advisory

End User Type

Retail Investor; High Net Worth Individuals

Region

North America; Europe; Asia Pacific; Latin America; MEA

 

Furthermore, the COVID-19 pandemic had a favorable influence on the demand for robo advisors, digital financing, investment management, and financial planning solutions and services globally. Numerous companies have observed an increase in digital investing activities in the first quarter of 2020. For instance, Wealthfront Corporation, a provider of automated investment services, reported an approximate 68% rise in digital investing activities, while Betterment, an American provider of robo advising and cash management services, reported an increase in the number of accounts opened by 25%.

Several emerging economies globally are making efforts to make the regulatory scenario more encouraging for regional players to enhance their research and testing of robo advisory services. For instance, in July 2019, Haseed, an investment company, and Wahed Capital Saudi received the approval of Saudi Arabia's Capital Market Authority (CMA) to test their robo advisory services in the country. This initiative is aimed at increasing the use of financial technology in the Arab economy as part of the country's growth strategy.

In recent years, robo advisory companies have gained the attention of venture capital investments, with the funds allowing them to enhance their product offerings and market positions. These investments are expected to create new opportunities for market growth over the forecast period. For instance, in September 2021, Betterment, a robo advising service provider, raised USD 160 million in growth capital, including USD 60 million from a Series F equity round and a USD 100 million credit facility. The fintech-focused VC firm Treasury led the Series F round with participation from its existing investors such as Bessemer Venture Partners, Kinnevik, Francisco Partners, Anthemis Group, Anthemis Group, Menlo Ventures, Globespan Capital Partners, among others, as well as new investors such as ID8 Investments and Aflac Ventures. The company would use the additional funds to develop its core retail and advisory solutions and offerings for small and medium businesses.

The key players in the market include Betterment, Wealthfront Corporation, The Vanguard Group, Inc., Charles Schwab & Co., Inc., and SigFig Wealth Management, LLC. These players are focusing on adopting growth strategies such as partnerships, mergers & acquisitions, and new product development to further expand their global market presence. For instance, in December 2019, Vanguard Group, Inc. announced a partnership with Ant Financial Services Group, the operator of Alipay. This partnership has helped Vanguard Group, Inc. to offer retail customers in China simplified investment advisory wealth management services.

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