* This chart and data were pulled from The Digital Wealth Management Report by Insider Intelligence. Purchase the report here to get immediate access to the full analysis. |
Digital wealth managers, also called robo-advisors, emerged after the 2008 financial crisis as fintechs aimed to simplify and democratize wealth management services with technology-first solutions. We define wealth management as encompassing investment management, but not savings or personal finance management for current accounts.
Robo-advisors only account for a small share of investable assets as of now, but they're set to grow significantly over time. There was a total of $43 trillion assets under management (AUM) held by wealth managers in North America in 2018, per McKinsey, and robo-advisors still only make up a small fraction of that total: |
| Insider Intelligence estimates that just around $330 billion was invested in robo-advisors in North America in 2019. However, we expect that number to increase significantly over the next few years to reach $830 billion by 2024 — presenting an opportunity to fintechs and incumbents already in the space, as well as FIs that want to get involved with digital wealth management. |
| At the same time, digital wealth managers from both incumbents and startups are facing their first economic downturn amid the coronavirus pandemic, which could impact the sustainability of their businesses moving forward if they don't adjust their services. |
| While the pandemic represents a potential threat to digital wealth managers, there are ways to navigate the crisis and support their customers. For that reason, digital wealth management still represents an attractive opportunity for... |
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