September 14, 2015
With the advent of robo-advisors, a dynamic shift is happening in the retail investment industry where technology is making faster and smarter financial decisions. LTP along with GrowthPraxis, is coming up with a new report on the concept of robo-advisors. According to the report, by 2020, robo-advisors will be managing about over a trillion dollars in the US.
It would be unwise for asset managers to ignore the potential disruption caused by the so-called ‘robo-advisors.’ Nutmeg recently raised a $32M mega-round for their platform, with Schroders at the table participating in the financing. Our industry cannot afford to ignore these technological gains that investors will benefit from and are actively seeking out.- Brad Hancock, Head of Web & eMarketing at BNY Mellon Asset Management to media.
We have listed below some sample US companies from the report that work on the robo-advisor concept:
Headquarters: New York
Founding Year: 2008
Founders: Jon Stein and Eli Broverman
Total Asset under Management: $2.6 billion
Total Funding Amount: $105 million
Number of customers: 110,000
About the company: Betterment is an online-investment adviser registered by the US Securities and Exchange Commission based in New York. It provides investment advice and diversified, fully automated investment management to customers for less than the typical cost of a traditional financial adviser or wealth manager. All transactions occur online; it is an execution-only service. Betterment provides both financial advice and investment management to customers. Betterment's software invests and rebalances accounts automatically using cash inflows and dividends.
Headquarters: Palo Alto California
Founding Year: 2008
Founders: Andy Rachleff, Dan Carroll
Total Asset Under Management: $2.5 billion
Total Funding Amount: $129.5 million
Number of customers: 37,400
About the company: It is an automated investment firm. They manage a diversified, continually rebalanced portfolio of index funds at a very low cost and in an extremely tax-efficient manner. Wealthfront takes the guesswork out of sound, long-term investing through effortless automation. It manages a personalized online investment account for that is fully diversified and periodically rebalanced accessible anytime and anywhere from your desktop, tablet or phone. In 2013, Wealthfront introduced "direct indexing," a tax-loss harvesting platform that purchases the individual securities of an investment portfolio. As a software-based substitute to human advisors, Wealthfront’s economics enable it to scale at very low marginal costs.
Headquarters: San Francisco, CA
Founding Year: 2011
Founders: Parker Conrad, Mike Sha
Total Asset under Management: $70 M
Total Funding Amount: $15 M
Number of customers: 309,000
About the company: Sigfig is simplifying investment by offering clients the benefits of online portfolio management. Specializing in helping clients balance their personal portfolios by evaluating their needs and choosing the right investments. Sigfig helps clients stay in control, see all their investments in one place, receive unbiased financial advice and receive no hidden fees. SigFig invests primarily in low-cost ETFs, which allows the company to minimize trading commissions and keep the monthly fee remarkably low. SigFig Portfolio Tracker: SigFig helps to track all investments in one free, easy to use dashboard via web or mobile. SigFig Asset Manager: SigFig Asset Manager is the easiest way to manage money. The automated system constantly monitors and optimizes the investment by reducing the fee.
4. Personal Capital
Headquarters: Redwood City, CA
Founding Year: 2009
Founders: Louie Gasparini, Bill Harris, Rob Foregger
Total Asset Under Management: $ 1.5 billion
Total Funding Amount: $102.3 M
Number of customers: 850000 registered users
About the company: Personal Capital is an online financial advisor that uses automated software programs to help you manage your money. Personal Capital's award-winning finance app allows you to see all of your accounts in one place and gives a comprehensive view of income, spending and investment performance. The Personal Capital Software rebalances periodically. The Investment Committee makes all portfolio decisions, but software and advisors allow to optimally implement and customize each strategy and keep clients on track.
Headquarters: New York, NY
Founding Year: 2013
Founders: Herbert Moore and Vicki Zhou
Total Asset Under Management: $ 0.22 million
Total Funding Amount: Undisclosed
Number of customers: NA
About the company: WiseBanyan, Inc., a financial advisor, provides professional wealth management services to individuals and institutions online. The company offers advisory services ranging from designing, recommending and managing various investment portfolios to help clients in achieving short and long-term financial goals.
Table of Contents:
1. Evolution of Retail Investment Tools
2. Overview of Robo-Advisors
3. Drivers and Inhibitors for the robo-advisors market
4. Value chain analysis of robo-advisors
5. SWOT analysis of robo-advisors
6. Competitive landscape for robo-advisors
7. Market size, market share and market potential for robo-advisory
8. Players landscape
9. Company profiling
10. Forecast: Robo-advisor market
11. Major investors in robo-advisor companies
12. Recent mergers and acquisitions in robo-advisory