Note from the Publisher: In this op-ed from Forbes Asia, the author includes a list of several recent robo rollups by large investment firms, and discusses what we have put forth many times at FintekNews. As adaptation of robos – with their greatly compressed fee structures – advances, heads will have to roll. We see this as an unfortunate but necessary byproduct of the advance of fintech.
“Perhaps no other sub sector of the fintech arena has received as much institutional and retail interest as the robo advisors. The business of financial planning and personal investment affects large pools of capital and large investor segments. Innovation in the investment technology space is creating a fierce race among startups, brokerages, wealth management firms and insurance companies to serve a shifting and evolving account base. But there are many factors to consider as competition heats up.
Who Are the Robo Advisors?
By now, the robo advisors are familiar to almost all fintech watchers. These are the startups which have garnered media attention and customers given digital native investment accounts. Their services include automated portfolio planning, automatic asset allocation, online risk assessments, account re balancing and other digital tools, available for a low fee with account minimums as low at $10,000 USD. Fees are competitive and range between 15 to 35 basis points of AUM. Well known players include Betterment, Wealthfront, Motif and Folio, among others.”