The growing convergence between traditional asset managers and robo-advisors
- Robo-advisors are increasingly popular with younger investors, as they appreciate their automation.
- A new white paper explores the opportunity traditional asset managers have to reach new customers with this technology.
Robo-advisors are automated investment solutions that manage portfolios using algorithms and artificial intelligence in order to optimize performance without human intervention. And they have the opportunity to capture the next generation of investors who rely on apps to manage their lives -- and money.
Digital investment solutions are scaling. Assets managed by robo-advisors hit $460 billion in 2020 and are predicted to grow to $1.2 trillion by 2024. These solutions are also crucial — as Millennials and Gen X are expecting to receive a wealth transfer of $68 trillion in the coming decades.
Yet despite the appeal of replacing expensive human relationships, robo-advisors can’t stand alone. With significant costs for software development and algorithm building, their profitability is highly elusive. And no less importantly, they lack what financial institutions possess — trust.
To capture market share, robo-advisors have a long way to go. At the same time, financial institutions must merge digital solutions to capture the growing Millennial and Gen X investor sector.
A new white paper by Plaid and Tearsheet Studios explores why the future is about convergence. With the power of human asset managers and and ease of robo-advisors, companies can offer the seamless digital investment solution that will capture today’s and tomorrow’s investors.
Download the white paper for an in-depth understanding:
- How robo-advisors have emerged as a challenge to traditional asset managers
- What financial institutions have to offer -- and gain -- from collaborating with automated investment technologies
- Why the hybrid model can pull the best from both worlds and service the new generation of investors