Digital Wealth Disruption: The Competition Evolves
At first, robo advisors caused some advisors to worry about competing and surviving in a market shifting toward millennials and low costs. Now, they're facing the same concerns.
It's true that assets of online managed accounts are expanding rapidly; advisory firms continue to roll out their own robo offerings; venture capital continues to flow into digital wealth provider platforms, as valuations for some close in on $1 billion, while deals for tech providers reach record figures.
But underlying these positive trends are nagging concerns about performance, survivability and profitability of many digital wealth providers.
Despite company pronouncements to the contrary, algorithm-based robo advisors saw assets drop during the recent correction. Even the most successful platforms aren't expected to be profitable for another decade, but they are already engaged in expensive advertising campaigns to gain clients.
All this activity is occurring, industry analysts point out, in a segment that still represents just a sliver of the total investment market.
And the analysts at Corporate Insight predict that the "true disruption of this industry" hasn't even happened yet, but will if this one event happens.
Click through the slideshow to find out more about their prediction and other key trends in digital wealth management or view a single-page version here. -- Suleman Din