Remember when some people feared that robo-advice would put the squeeze on flesh and blood advisors? Well, 2023 has proven that IRL advice will be A-OK.
Capping an up and down year for the robo-advice industry, JPMorgan announced this week that JPMorgan Automated Investing will be shutting down in the second quarter of 2024.
And as far as why the big change was coming, company officials didn't mince words.
"The robo-investing business did not take off in the wealth industry as expected. It hasn't scaled or become profitable for many, including us," said a JPMorgan statement, acknowledging that what seemed like a big business opportunity just a few years ago hasn't caught fire as anticipated across the industry.
For Nikhil Sharma, head of digital wealth solutions at Capco, robos once believed to have the power to "entirely supplant human advisory" are struggling to "demonstrate sustainable profitability."
So now, it's time for the robos to do their best Optimus Prime impression and evolve into something more.
"Instead, the true strength of digital experiences, driven by technology, lies in sparking customer interest and seamlessly connecting them with advisors, rather than solely executing automated rebalancing," Sharma said.
Also new this week, Envestnet gives tips on how to serve affluent clients of all ages; retirement-focused wealthtech Pontera raises $60M in latest funding round; and the top Financial Planning podcast episodes of 2023.
Check out all those stories and more, only at Financial Planning.
Anything else on your mind? Drop me a line at justin.mack@arizent.com. Have a great weekend, everyone!
Regards,
Justin

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