Robo Advisory Services Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 11.52 Billion |
| Market Size (2029) | USD 45.75 Billion |
| CAGR (2024 - 2029) | 31.78 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Robo Advisory Services Market Analysis
The Robo-advisory Services Market size is estimated at USD 11.52 billion in 2024, and is expected to reach USD 45.75 billion by 2029, growing at a CAGR of 31.78% during the forecast period (2024-2029).
The rapid digitization of the BFSI industry has accelerated the growth of digital investments in which Robo-advisors play a major role. The Robo-advisory services are beneficial majorly for passive investors who do not prefer personal monitoring of their portfolio development.
- Rapid automation of processes and businesses across end-user industries is acting as a major catalyst for the adoption of Robo-advisory services. These services eliminate human labor, as the online platforms offer the same services at a fraction of the cost. Also, the services are available 24/7 as long as the user has an Internet connection.
- Several emerging economies are stimulating the regional players to enhance their testing and research of Robo-advisory services. These initiatives are further expected to act as a catalyst for market growth. For instance, Saudi Arabia's Capital Market Authority (CMA) approved Wahed Capital and Haseed Investing Company to test its Robo-advisory services. This was done as part of the country's strategy to encourage the use of financial technology in the Arab economy.
- Amidst the coronavirus outbreak, lockdown, and market uncertainty, a surge in B2B Robo-advisors, Digital investing, financial advice, and portfolio management is witnessed globally. A rapid shift from traditional investment services to robo-advisory investment services is another factor in market growth. In addition, investment platforms are now offering robo-advisors as new digital financial advisors over traditional investment services, enabling the scope of expansion for robo-advisors.
- The widespread use of robo-advisory throughout industrial verticals such as retail banking, asset management, and others for conducting algorithmic calculations to analyze data and transmit comprehensive information driving the market forward. Moreover, robo advisors offer specific benefits such as tax-loss harvesting, low-cost portfolio, better decision-making, safe and secure investments, and help eliminate credit risks. Such factors are anticipated to drive industry growth over the forecast period.
- However, the limited flexibility offered by robo advisors is anticipated to restrain the market's growth during the forecast period. In addition, the lack of face-to-face meetings leading to consultation barriers between investors and advisors is also expected to hinder market growth. However, the demand for low-cost investment advisory is anticipated to open up opportunities for market growth. Furthermore, the growing usage of advanced analytics and big data can potentially broaden the scope of robo-advisors significantly.
Robo Advisory Services Market Trends
Investment Advisory Expected to Gain Maximum Traction
- Robo-advisory services majorly include investment advisory services related to the personal finance of individuals. Robo-advisors are rapidly filling the gaps created by human investment advisors, such as capability, capacity, and cost, majorly due to the increase in the adoption of digitization across the investment industry, coupled with the adoption of AI in robotics.
- The demand for robo-advisers is anticipated to increase due to the financial sector's increased adoption of technology-enabled analytics for investment consultations. Another driver of industry growth is the quick transition from traditional investment services to robo-advising investment services. Furthermore, robo-advisors are now available on investment platforms instead of traditional investment services, allowing for the spread of robo-advisors.
- The market is being driven ahead by the extensive usage of robo-advisory across several industrial verticals, including retail banking, According to evidentinsights.com Among the largest banks in the world, JPMorgan Chase had the highest artificial intelligence (AI) adoption in 2023, asset management, and others, for algorithmic calculations to evaluate data and provide thorough information.
- Over the forecast period, these variables are anticipated to fuel industry expansion. One of the key factors propelling the market's growth is the emergence of new technologies like artificial intelligence (AI) and machine learning (ML).
- FinTechs across the world rely upon both technology and personal advisory. They are rapidly creating robo-advisory services by adopting technologies such as AI and ML, offering accurate and transparent advisory services to retail investors, further preventing them from making inaccurate investment decisions.
North America Expected to Dominate the Market
- Investment management robo-advice is regarded as a breakthrough in the formerly exclusive wealth management services since it makes the services accessible to a wider audience at a cheaper cost in comparison to conventional human assistance. Robo-advisors estimate the client's risk tolerance by gathering information about the client's current financial status. The client's risk choices and intended target return are taken into account when the robo-advisor decides how to distribute the client's assets.
- The North American region is expected to dominate the market owing to the presence of several market players in the region, such as Betterment LLC, Charles Schwab & Co. Inc., Wealthfront Inc., and Vanguard Group, amongst others. Also, the region has led other regions in terms of technological advancement and the robotics industry. Various companies in the market have been making product innovations and developments to leverage the first-mover advantage and gain maximum market traction.
- Several financial institutions are still in the development phase to innovate and develop highly advanced platforms offering robo-advisory services to their customers. For instance, the Vanguard Group plans to launch a Robo-advisory service, which the company claims is expected to eliminate human advisory.
- Moreover, increasing investment in blockchain technology in North America. Several blockchain development projects have been initiated in the United States in recent years, accelerating the market's growth. In addition, this region is home to a significant number of small and medium-sized technology-based firms.
- In addition, great progress has been made in the integration of public vital services with BaaS solutions, which is anticipated to create new growth prospects for the robo advisory over the next few years. BaaS is a cloud-based architecture that assists enterprises in developing and operating blockchain applications.
Robo Advisory Services Industry Overview
The competitive landscape of the Robo-advisory Services Market is consolidated owing to the presence of major players like Betterment LLC, Wealthfront Inc., and The Vanguard Group, amongst others holding the majority of the market share. These market players are making product innovations to capture maximum market share globally. Also, several economies' governments are stimulating smaller vendors to enter the market with innovative products or by forming strategic collaborations.
- In November 2023 - Wealthfronthas announced that the company now oversees more than USD50 billion in assets for over 700,000 clients, largely young professionals across the United States. Wealthfront's Investment Team constantly monitors the changing investment landscape and evaluates opportunities to help clients invest in the latest industries and trends.
- In Spetember 2023 - Betterment, the largest independent digital investment advisor in the U.S., announced today the launch of a new Bitcoin/Ethereum Portfolio as part of the crypto investing by betterment suite. The new portfolio provides direct access to the two largest cryptocurrencies in the market for investors who are interested in gaining exposure to crypto as part of their long-term investment strategy.
- In November 2022, JPMorgan Chase was filling in a gap in its suite of wealth management services with the launch of a hybrid robo-advisor program that would offer investors a digital investment platform and ongoing access to a human, financial advisor. J.P. Morgan Personal Advisors is open to all investors, but the company envisions it primarily serving banking or credit card customers who are interested in wealth management services but wouldn't be inclined to engage with J.P. Morgan's in-branch advisors.
Robo Advisory Services Market Leaders
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Betterment LLC
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Wealthfront Corporation
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The Vanguard Group, Inc.
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Charles Schwab & Co., Inc.
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BlackRock, Inc.(FutureAdvisor)
*Disclaimer: Major Players sorted in no particular order
Robo Advisory Services Market News
- Januray 2024 - Betterment announces the first commercial product that allows small business employers to automatically match employee student loan payments with a 401(k) contribution, Employees with access to Betterment's 401(k) can record qualified loan payments within the platform. Employers can then match these payments with a contribution to the employee's 401(k), enabling borrowers to pay down loans while continuing to proactively save for retirement.
- August 2023 - Wealthfort has announced new stock collections created by the company's Investment Team to navigate investment themes including artificial intelligence (AI) and inflation. Designed to help clients discover new investment opportunities, Wealthfront's Stock Investing Account offers zero commissions, fractional shares, curated stock collections, and requires just USD 1 to get started.
Robo Advisory Services Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MAKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Analysis of Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Digitization of the BFSI Industry
5.1.2 Cost-efficiency in Managing Personal Finance
5.2 Market Restraints
5.2.1 Lack of Human Expertise and Empathy
5.2.2 Nascency of the Technology
6. MARKET SEGMENTATION
6.1 By Type of Services
6.1.1 Investment Advisors
6.1.2 Wealth Management
6.1.3 Retirement Planning
6.1.4 Tax-loss Harvesting
6.2 By Geography
6.2.1 North America
6.2.2 Europe
6.2.3 Asia-Pacific
6.2.4 Rest of the World
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Betterment LLC
7.1.2 Wealthfront Corporation
7.1.3 The Vanguard Group Inc.
7.1.4 Charles Schwab & Co. Inc.
7.1.5 BlackRock Inc. (FutureAdvisor)
7.1.6 FMR LLC (Fidelity Go)
7.1.7 Roboadviso
7.1.8 M1 Holdings Inc.
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. MARKET OPPORTUNITIES AND FUTURE TRENDS
Robo Advisory Services Industry Segmentation
Robo-advisory services are digital, including automated, algorithm-driven financial planning services with little human supervision. A Robo-advisor collects financial information from the clients, such as their current financial situation and future financial goals, through an online survey. The Robo-advisor then aggregates the collected data and uses it to offer advice and automatically invest client assets. The robo-advisory services provide easy account setup, robust goal planning, account services, portfolio management, security features, and continuous customer service at low fees.
The robo-advisory services market is segmented by type of services (investment advisor, wealth management, retirement planning, and tax-loss harvesting) and geography (North America, Europe, Asia-Pacific). The market size and forecasts are provided in terms of value (USD) for all the above segments.
| By Type of Services | |
| Investment Advisors | |
| Wealth Management | |
| Retirement Planning | |
| Tax-loss Harvesting |
| By Geography | |
| North America | |
| Europe | |
| Asia-Pacific | |
| Rest of the World |
Robo Advisory Services Market Research FAQs
How big is the Robo-advisory Services Market?
The Robo-advisory Services Market size is expected to reach USD 11.52 billion in 2024 and grow at a CAGR of 31.78% to reach USD 45.75 billion by 2029.
What is the current Robo-advisory Services Market size?
In 2024, the Robo-advisory Services Market size is expected to reach USD 11.52 billion.
Who are the key players in Robo-advisory Services Market?
Betterment LLC, Wealthfront Corporation, The Vanguard Group, Inc., Charles Schwab & Co., Inc. and BlackRock, Inc.(FutureAdvisor) are the major companies operating in the Robo-advisory Services Market.
Which is the fastest growing region in Robo-advisory Services Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Robo-advisory Services Market?
In 2024, the North America accounts for the largest market share in Robo-advisory Services Market.
What years does this Robo-advisory Services Market cover, and what was the market size in 2023?
In 2023, the Robo-advisory Services Market size was estimated at USD 7.86 billion. The report covers the Robo-advisory Services Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Robo-advisory Services Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
What is driving the growth of the Robo-Advisory Market?
The Robo-Advisory Market is driven by: a) Demand for low-cost investment advice b) Increasing use of digital platforms for financial services c) Growing financial awareness among millennials d) Digitization of the banking, financial services and insurance (BFSI) Industry
Robo Advisory Services Industry Report
The Robo Advisory Market is witnessing substantial growth, fueled by digital technology integration in financial services and a shift towards automated investment services. Robo advisor firms, utilizing advanced algorithms and AI, offer personalized advice and portfolio management, catering to both high-net-worth and retail investors. This innovation-driven market provides simplified financial guidance, making investment decisions easier for those without a financial background. The appeal of robo advisory services lies in their low fees and minimal account requirements, making investing more affordable than traditional methods. Despite facing challenges like security risks, the sector's growth is bolstered by technological advancements and the increasing demand for automated solutions, promising a competitive future. For detailed insights, Mordor Intelligenceā¢ provides a comprehensive analysis, including market share, size, revenue growth, and forecasts in a free report PDF download, highlighting the dynamic expansion of robo advisory services.
