You may not have seen this but AFP has a great story on how automatic investing is changing the wealth management landscape. More and more dollars, especially wealth owned by millennials, is going towards so called “Robo-advising” companies. These firms use automated algorithms to make asset allocation decisions based on their client’s preferences. They are becoming increasing popular because these firms tend to have lower fees and accept lower dollar amounts than traditional firms. From the AFP story:
When it comes to investment advice, would you trust a financial professional or a robot?
A growing number of people are choosing the latter, on the belief that algorithms can provide rational and dispassionate advice at a cost well below that of traditional advisers.
A handful of automated investment startups created in the past few years now have more than $4 billion in assets under management, according to Forrester Research.
It’s a small segment of a trillion-dollar wealth management industry but growing at a red-hot pace, Forrester analyst Bill Doyle said.
“This is a more meaningful crop of disruptors than we’ve seen for many years, really since the Internet brokerages emerged,” he told AFP.
The rest of the story is here.