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AI-Driven Financial Revolution: Robo-Advisors’Rise and Global Future

AI-Driven Financial Revolution The Rise and Future of Global Robo-Advisors0

This report takes a global perspective to analyze investors’ views on Robo-Advisors and explores the development trends in the US and Taiwan markets. Through detailed data analysis and observations, we reveal the rise of Robo-Advisors over the past decade, their impact on investment returns, and the current use of Robo-Advisors in different markets. These insights will help businesses and investors understand future investment trends and opportunities and provide specific recommendations to enhance competitiveness.

AI-Driven Financial Revolution The Rise and Future of Global Robo-Advisors (1)

Ten Years of Transformation: The Rise of AI Robo-Advisors in Asset Management

The chart shows that the assets managed by US robo-advisors increased from $0 trillion in 2018 to $1.87 trillion by 2028, indicating a steady growth trend. Particularly after 2023, the growth rate accelerated, showing that market acceptance and trust in robo-advisors are continuously improving. Robo-advisors leverage AI and big data technologies to provide long-term asset management and financial advice. For businesses, it’s essential to invest in robo-advisor technologies, improve service quality and user experience, and meet the growing market demand to maintain competitiveness.

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Unveiling Smart Investment Rankings: 2021 Global Robo-Advisor Return Rankings

The chart shows the 3-year equity returns, fixed income returns, and total returns of several global robo-advisors in the first half of 2021. SoFi leads the market with a 3-year equity return of 16.1% and a total return of 11.7%, followed by Axos Invest and SigFig, both with total returns of 12.1%. Utilizing smart investment technologies can help investors achieve stable long-term returns. Businesses should focus on long-term return performance and stability when selecting smart investment platforms to ensure steady growth.

AI-Driven Financial Revolution The Rise and Future of Global Robo-Advisors (3)

Impact of AI on Investment: 2021 Institutional Investors’ Attitude Survey

The chart shows the attitudes of institutional investors towards the impact of artificial intelligence (AI) on investment results in 2021. The survey results show that 78% of respondents believe AI has a positive impact on investment results, 13% hold a negative view, 8% think it has no impact, and 1% are unsure. AI technology can overcome human emotional interference and help investors make better investment decisions, especially favored by Generation X and Y.

These generations believe robo-advisors provide customized investment portfolio recommendations and risk warning mechanisms, making them the preferred choice. Compared to traditional investments, robo-advisors have automated features, making them convenient for those who prefer not to deal with traditional investment methods, have less time to research, or are novice investors.

AI-Driven Financial Revolution The Rise and Future of Global Robo-Advisors (4)

The Popularity of Robo-Advisors: The Use of Robo-Advisors in the US Market by 2023

The chart shows that as of December 2023, 26% of US respondents are using robo-advisors, 15% are considering using them, 44% do not consider using robo-advisors, and 15% are uncertain. This indicates that the adoption rate of robo-advisors in the US market still has significant room for growth. Young people are advised to start using smart investment tools early and allocate assets to achieve financial freedom better. Businesses should also enhance market education and promotion, emphasizing the advantages and safety of robo-advisors to increase acceptance and usage rates among potential customers.

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Market Battle: Competition Between Large Wealth Management Institutions and Startups

The chart shows the asset scale managed by robo-advisors in the US market in 2021. Vanguard leads with $20.66 billion, followed by Charles Schwab with $6.58 billion. Startups like Betterment and Wealthfront manage $2.68 billion and $2.14 billion, respectively. This data indicates that large wealth management institutions dominate the asset management market. Startups are advised to enhance technological innovation and differentiated services to increase competitiveness and attract more customer funds.

In Taiwan, the robo-advisory market is also rapidly developing. By the first half of 2023, the asset scale of robo-advisors in Taiwan has exceeded $7.3 billion, with nearly 170,000 customers. Major players in the market include Cathay United Bank’s “Cathay Smart Investment,” First Bank’s “e-First Smart Investment,” and Hua Nan Bank’s “Hua Nan Good Investment.”

KSCC Insight and Suggestions

  1. Dominance of Large Wealth Management Institutions: Large wealth management institutions dominate the asset management market. Startups need to focus on technological innovation and service differentiation to stand out in the competitive market.
  2. Potential of AI Technology: The application of AI technology in the investment field not only improves the precision of investment decisions but also effectively overcomes human emotional interference. It is recommended that businesses increase investment in AI technology to enhance market competitiveness.
  3. Continuous Growth of Robo-Advisors: Robo-advisors will continue to grow over the next decade. Businesses should actively improve their service quality and user experience to meet the growing market demand and consolidate their market position.

KSCC is a management consulting company in Taiwan. Our services include corporate in-house training, consulting, and leadership management.For more information about our corporate services, please feel free to visit our website: https://kscthinktank.com.tw/custom-training/ 

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