Robo-Advisors 2019: Still Waiting for the Revolution

Posted by Theresa W. Carey

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It turns out that automated portfolio advice is not the Field of Dreams. “If you build it, they will come,” has not worked out for the robo-advisory industry — yet.

Just a few years ago, prognosticators gazed into their crystal balls and predicted that investors would pour their money into robo-advisors. In 2016, KPMG projected that assets under management would be $1.5 trillion in 2019 and $2.2 trillion in 2020. Juniper Research expects assets under management worldwide to hit $4.1 trillion in 2022. However, that is nowhere close to what’s happening, and these projections seem to have fallen victim to the First Law of Forecasting: Give them a number, or give them a date, but never both.

According to a variety of analysts, there is considerably less than $1 trillion worldwide managed by robo-advisors as of May 2019, and the $2.2 trillion mark won’t be reached until 2022, according to some optimistic forecasts. Backend Benchmarking says $440 billion is managed by robo-advisory services as of mid-2019, while the Aite Group says it’s in the $350 billion range. Last fall, the research group Autonomous NEXT estimated that the market encompassed $660 billion in assets. To keep these figures in perspective, there is an estimated $22 trillion in investable assets out there–with over $9 trillion sitting in cash accounts, uninvested….CLICK for complete article