KEY TAKEAWAYS
  • The rise of independent robo-advisors that rely on a a combination of passive investment strategies, algorithmic risk assessment and low fees has shaken up the wealth management business.
  • The large incumbents in the space have taken note and responded by launching Robo-advisory services of their own on an even larger scale.
  • The question is whether independent robo-advisors can continue to survive by diversifying their offerings or are they inevitable acquisition targets for the larger incumbents in the space?

Since the launch of the first disruptors, traditional wealth managers have followed suit. However, over the past decade, the model of service has gradually shifted in a few important ways. Betterment has led the way by adding a human element, resulting in a hybrid approach but maintaining their low-to-no-minimum investment. Vanguard has followed suit, offering a digital service combined with a human risk tolerance evaluation, but at a minimum of $50,000. The hybrid approach seems to be catching on in the industry.

Click here to explore the companies and opportunities featured in this article