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Hybrid Robo Advisors
Who will dominate digital asset and wealthmanagement?
Berlin, June 8th, 2016
The incredible ascent of the Robo (start-ups)
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billion USD
But start-ups are only a small part of the Robo story
9% Pure play Robo-Advisors
91% hybrid Robo-Advisors
End of 2016: USD 470 bn
“The smart combination of software automation with human adviceis the real winner in the battle for investors over the next decade.”
(MyPrivateBanking Research: Hybrid Robo-Advisors for Wealth Management 2016)
Source: MyPrivateBanking ResearchReport on Hybrid-Robo-Advisors, 2016
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Automated investing showing massive growth
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Market Pure Robo(Retail, Affluent)
Market Hybrid Robo(Retail, Affluent)
Market Pure Robo(HNW)
Market Hybrid Robo(HNW)
North America: Market Prognosis for Hybrid and Pure Robos
Au
Min
USD
bn
Source: MyPrivateBanking ResearchReport on Hybrid-Robo-Advisors, 2016
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North America: market share of different Robo solutions
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2%
4%
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Hybrid Robo (HNW)
Pure Robo (HNW)
Hybrid Robo (Retail,Affluent) Pure Robo (Retail,Affluent)
0.2%
4.8%
11.8%
19.1%
Market Share of Underlying Investable Assets of the Market Segment
Source: MyPrivateBanking ResearchReport on Hybrid-Robo-Advisors, 2016
Millenials and wealthy most aware / knowledgeable about Robos
Source: MyPrivateBanking Research: Report on Investors‘ Attitudes towards Robo-Advisors, 2016
Very different types of Robos
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Betterment
WiseBanyan
Quirion
Swissquote
Wealthfront
FutureAdvisor
Personal Capital
AssetBuilder
Rebalance IRA
Average Assets under Management per Client (US$ thousand)
Source: Robo-Advisors 2.0 Report, MyPrivateBanking
Different Robo strategies – Who is winning?
Low CostSuperior
products & performance
Ease of Use, Premium Service
• No or very low fees• Stress low fees
as main factor forperformance
• Examples: Schwab,WiseBanyan
• Emphasis on superiorplatform, resources, information
• Advanced algorithmsfor e.g. tax-loss harvesting
• Human advisors (often)involved
• Examples: BMO, PersonalCapital
• Chasing alpha• Emphasis on asset
allocation• In some cases active
investment approach• Examples: Nutmeg,
AssetBuilder
Different strategies will win in this emerging market space asclient base and AuM rapidly growing
Global fund and asset managers grasping Robo opportunity
• Acquired FutureAdvisor(USD 800m AuM)
• Digital channel for brokers & banks
• Reaching out to millenialclients
• Latest client: LPL (largestindependent broker-dealer with 14,000 independent brokers)
• VPAS service• 0.3% fees• USD 50k minimum• Hybrid solution
involving human advisor/video chat
Majority of global fund & asset managers will enter automated advice space within 24 months
• Fidelity Go pilot for existing retail clients
• Fees 0.35%-0.39%• Minimum: $5,000• Separate
b2b solution foradvisors announced
• Acquired Jemstep• Technology
platform for advisors which is highly cuszomizable
Global opportunities waiting
• At the moment Robos are mainly a local phenomenon
• Looking at ETF roll-out, this will quickly become a global gameof conquest
• Opportunities exist in Europe in the short-term, AsiaPacific in the long-term
• Adaptation to local regulation gives advantage to global players
• Role of GAFA (Google, Apple, Facebook, Amazon, Alibaba)?
Thank you!
Christian NolteriekeManaging [email protected]
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Special Report Offer for conference participants: “Hybrid-Robo-Advisors, 2016”for EUR 1,250 (list price EUR 1,950).
Quote promo code: “FundForum2016”