Huge Potential for Automated Advisors


HNWIs are changing the way they interact with their wealth managers. Automated advisory services offer great potential to wealth management firms to meet HNWIs’ growing demand for low-cost, digital services while also providing a means to expand their reach to mass affluent clients. Led by under-40 U.S. HNWIs, nearly half or more U.S. HNWIs expect all or most of their wealth management relationship to be conducted digitally in the next five years.

Under-30 HNWIs, who are expected to drive future wealth management relationships, were the most enthusiastic about automated advice, with 86.7% of them saying they would be willing to use it. Of those, more than three-quarters (76.9%) said they would even consider having more than half of their portfolios managed by an automated advisor.

Firms must act now to offer an automated advisory capability, not only to respond to HNWI demand and competing offerings, but to begin to develop a culture of innovation. Automated advisors are likely to just reach the tip of the iceberg in terms of industry disruption, creating an imperative for firms to develop the capability to effectively manage not only the current shifts but a full wave of disruption expected to follow soon, which might have the potential to impact more important areas such as advice.

U.S. HNWI Willingness to Use Automated Advisory Services and to Transfer Proportion of their Wealth to Automated Advisory Services, by Age, Q1 2015

HNWIs are changing the way they interact with their wealth managers.

Note: Questions asked: “Would you ever consider having a portion of your wealth managed by an automated advisory service”?;
“How much of your portfolio would you consider transferring to an automated advisor”?
Source: Capgemini and RBC Wealth Management Global HNW Insights Survey, 2015