Wealth managers to lose market share to robo-advisers

The robo-advisory market is increasing in competition globally, with more start-ups entering the wealth management industry year by year, said GlobalData, a data and analytics company.

Sergel Woldemicheal, wealth management analyst at GlobalData, explained that wealth managers have been aware of the impending shift for years.

"In previous years, traditional wealth managers across the globe had a widespread level of agreement that robo-advice would seize market share," Mr Woldemicheal said.

"However, as of 2018, the level of agreement that Asian-Pacific and European wealth managers will lose market share to robo-advisers is beginning to align."

He noted that wealth managers can protect themselves by turning to technology.

"For traditional wealth managers to reduce the risk of losing market share, they would benefit from introducing a digital investment platform," Mr Woldemicheal advised.

Robo-advisory is described as being an automated, algorithm-based portfolio management service offered by companies in the wealth management market.

According to data from Statista.com, assets under management in the robo-advisers segment amount to US$975.59 billion in 2019. They are expected to show an annual growth rate of 26.9 per cent resulting in the total amount of US$2.53 trillion by 2023.