Robo Advisory Market Size, Share & Growth Trends to 2028

Global Robo Advisory Market Size, Share & Industry Trends Analysis Report By Provider, By End User (High Net Worth Individuals and Retail Investor), By Service Type, By Type, By Regional Outlook and Forecast, 2022 - 2028

Published Date: November-2022 | Number of Pages: 221 | Format: PDF | Report ID: KBV-21085

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Get in-depth analysis of the COVID-19 impact on the Robo Advisory Market

Market Report Description

The Global Robo Advisory Market size is expected to reach $24 billion by 2028, rising at a market growth of 29.9% CAGR during the forecast period.

The term "robo-advisor" refers to the algorithm- and computer-driven financial planning that involves very minimal human intervention. Additionally, the robo-advisor collects financial information from clients through the use of an online survey. This information includes the clients' present financial condition as well as their future financial aspirations. In addition, by making use of this information, robo-advisers can provide their customers with several benefits, including expedited account creation, portfolio management, and safety measures.

Robo Advisory Market - Global Opportunities and Trends Analysis Report 2018-2028

Several of the world's fastest-growing economies are putting pressure on regional companies to step up their testing and investigation of robo-advisory services. A subcategory of financial counselors known as robo-advisors or robo-advisers, robo-advisors provide clients with financial advice and administration of their investments online while requiring only moderate to low levels of human participation.

They offer digital financial advice based on mathematical principles or algorithms and supply it to customers. Programmers are responsible for encoding these algorithms into the software once they have been devised by data scientists, investment managers, and financial advisers. Because these algorithms are carried out by software, the provision of financial advice to a customer does not necessitate the involvement of a human adviser.

The program makes use of its algorithms to automatically allot resources owned by customers in a manner that is both manageable and optimized for either short-term or long-term investment. The level of personalization, discretion, engagement and human connection offered by robo-advisors is one of the criteria used to classify these digital financial advisers. There are approximately a hundred different robo-advisory services available.

COVID-19 Impact Analysis

COVID had a good effect on the robo-advisory business. Backend benchmarking, which analyses performance by opening portfolios at top robo-advisors, revealed that the majority of portfolios handled by digital advisors performed similarly throughout market fluctuations. The number of users on an online wealth management platform or robo-advising in wealth management has doubled as the coronavirus puts an increasing number of advisers into lockdown. From the perspective of wealth management organizations, advisers are managing customers who have been personally and financially impacted by the coronavirus.

Market Growth Factors

Financial services are experiencing rapid digitalization

Digitization has been one of the most commonly embraced solutions in the financial services industry for enhancing core processing capabilities and providing enhanced client services and insights. Moreover, almost fifty percent of financial services have been related to investments. They have been able to reach a big portion of the public that has access to traditional consulting owing to budgetary restraints, so filling this need. In recent years, the financial services business has been modernizing and aiding advising services.

Automated wealth management using digital technology

In businesses such as asset management, banking, and insurance, the digital revolution is changing traditional business landscapes. FinTech, an acronym for financial technology, has evolved as a consequence of the ongoing evolution of technology. The wealth management (WM) business is undergoing profound change. A new generation of investors, molded by new technology and having lived through the last financial crisis, has introduced new criteria for the delivery of investment advice and products.

Market Restraining Factors

The Risk Involved with Robo-advisory Software, such as cyberattacks or IT errors

Robo-advisory software platforms are wholly reliant on technological systems, which might expose investors to possible risk circumstances stemming from cyberattacks or IT malfunctions or outages. If the instrument lacks sufficient protection, hackers may have several opportunities to steal data and funds. Because financial institutions rely on a great deal of vital and secret customer information, it is imperative to guarantee that employees implement the necessary security measures.

Provider Outlook

On the basis of Provider, the Robo Advisory Market is divided into Fintech Robo Advisors, Banks, Traditional Wealth Managers, and Others. The banks segment recorded a substantial revenue share in the robo advisory market in 2021. It is because banks are continually working to improve the quality of the experience, they provide their customers by digitalizing their products and services. The rise in popularity of digitalized solutions for opening a bank account, particularly among smaller financial institutions, is helping to feed the need for chat-based robo-advising.

Robo Advisory Market Share and Industry Analysis Report 2021

End User Outlook

Based on the End User, the Robo Advisory Market is bifurcated into Retail Investors and High Net Worth Individuals. The retail investor’s segment witnessed a substantial revenue share in the robo-advisory market in 2021. An individual investor is a non-professional investor who purchases and sells securities or funds that hold a basket of assets, such as mutual funds and exchange-traded funds. A retail investor is also known as an individual investor. Retail investors are also known as individual investors (ETFs). The majority of trades made by retail investors are conducted through either conventional or online brokerage companies, in addition to other forms of investment accounts.

Service Type Outlook

By Service Type, the Robo Advisory Market is classified into Direct Plan-based/Goal-based and Comprehensive Wealth Advisory. The direct plan-based/goal-based segment garnered the highest revenue share in the robo advisory market in 2021. Investors place a high value on robo-ability advisors to provide them with features such as comprehensive goal planning, investment management, security features, and responsive customer care. Customers who use goal-based robo-advisors, that provide risk profiling and goal-based suggestions, can run scenarios on goal planning and are prompted to take actions that will increase their chances of success.

Type Outlook

Based on the Type, the Robo Advisory Market is segmented into Pure Robo Advisors and Hybrid Robo Advisors. The hybrid robo advisors segment acquired the highest revenue share in the robo advisory market in 2021. It is because the demand for hybrid robo advisors is increasing as a result of the fact that these advisors mix the efficacy and stability of robotic systems with the human component of a personal financial adviser. This combination is expected to fuel the expansion of the category.
Robo Advisory Market Report Coverage
Report Attribute Details
Market size value in 2021 USD 4 Billion
Market size forecast in 2028 USD 24 Billion
Base Year 2021
Historical Period 2018 to 2020
Forecast Period 2022 to 2028
Revenue Growth Rate CAGR of 29.9% from 2022 to 2028
Number of Pages 221
Number of Tables 420
Report coverage Market Trends, Revenue Estimation and Forecast, Segmentation Analysis, Regional and Country Breakdown, Companies Strategic Developments, Company Profiling
Segments covered Provider, End User, Service Type, Type, Region
Country scope US, Canada, Mexico, Germany, UK, France, Russia, Spain, Italy, China, Japan, India, South Korea, Singapore, Malaysia, Brazil, Argentina, UAE, Saudi Arabia, South Africa, Nigeria
Growth Drivers
  • Financial services are experiencing rapid digitalization
  • Automated wealth management using digital technology
  • The Risk Involved with Robo-advisory Software, such as cyberattacks or IT errors

Regional Outlook

Region-wise, the Robo Advisory Market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America region procured the highest revenue share in the robo advisory market in 2021. It is anticipated that the existence of several significant firms, including Betterment, the Vanguard Group, Inc., and others, would contribute to the expansion of the robo-advising business in the United States. For example, The Vanguard Group, Inc. announced that it will be launching its robo-advice service in September 2019.

Free Valuable Insights: Global Robo Advisory Market size to reach USD 24 Billion by 2028

The market research report covers the analysis of key stake holders of the market. Key companies profiled in the report include Wealthify Limited (Aviva plc), The Charles Schwab Corporation, Betterment LLC, Fincite GmbH, Wealthfront Corporation, The Vanguard Group, Inc., Ellevest, Inc., Ginmon Vermögensverwaltung GmbH, SigFig Wealth Management, LLC and Social Finance.

Scope of the Study

Market Segments Covered in the Report:

By Provider

  • Fintech Robo Advisors
  • Banks
  • Traditional Wealth Managers
  • Others

By End User

  • High Net Worth Individuals
  • Retail Investor

By Service Type

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

By Type

  • Hybrid Robo Advisors
  • Pure Robo Advisors

By Geography

  • North America
    • US
    • Canada
    • Mexico
    • Rest of North America
  • Europe
    • Germany
    • UK
    • France
    • Russia
    • Spain
    • Italy
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Singapore
    • Malaysia
    • Rest of Asia Pacific
    • Brazil
    • Argentina
    • UAE
    • Saudi Arabia
    • South Africa
    • Nigeria
    • Rest of LAMEA

Key Market Players

List of Companies Profiled in the Report:

  • Wealthify Limited (Aviva plc)
  • The Charles Schwab Corporation
  • Betterment LLC
  • Fincite GmbH
  • Wealthfront Corporation
  • The Vanguard Group, Inc.
  • Ellevest, Inc.
  • Ginmon Vermögensverwaltung GmbH
  • SigFig Wealth Management, LLC
  • Social Finance

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Related Reports:

North America Robo Advisory Market Report 2022-2028

Europe Robo Advisory Market Report 2022-2028

Asia Pacific Robo Advisory Market Report 2022-2028

LAMEA Robo Advisory Market Report 2022-2028

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