Portland, OR, Aug. 03, 2023 (GLOBE NEWSWIRE) -- Allied Market Research published a report, titled, “Robo Advisory Market by Business Model (Pure Robo Advisors and Hybrid Robo Advisors), Provider (Fin-Tech Robo-Advisors, Banks, Traditional Wealth Managers, and Others), Service Type (Direct Plan-based/Goal-based and Comprehensive Wealth Advisory), and End User (Retail Investor and High Net Worth Individuals (HNIs)): Global Opportunity Analysis and Industry Forecast, 2023-2032”. According to the report, the global robo advisory industry generated $7.94 billion in 2022, and is anticipated to generate $129.46 billion by 2032, witnessing a CAGR of 32.5% from 2023 to 2032.
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Prime determinants of growth
The growth of the robo advisory market is driven by rapid digitalization in financial services and shift in preferences from traditional investment services to robo advisory services. The growth potential of the robo advisory market may be limited by the slower adoption rate among older investors. On the contrary, innovations in robo advisory services have revolutionized businesses in the financial sector and helped banks and other investors to streamline the processes and improve the quality of their services. These innovations are constantly being developed, thereby providing potential opportunities for the growth of the sector.
Report coverage & details:
| Report Coverage | Details |
| Forecast Period | 2022–2032 |
| Base Year | 2022 |
| Market Size in 2022 | $7.94 billion |
| Market Size in 2032 | $129.46 billion |
| CAGR | 32.5% |
| No. of Pages in Report | 273 |
| Segments covered | Business Model, Provider, Service Type, End User, and Region. |
| Drivers | Shift in preference from traditional investment services to robo advisory services Rapid digitalization in financial services Personalized investment solutions |
| Opportunities | Technological innovations in digital investment platforms Growing adoption of digital platforms and mobile devices |
| Restraints | Increase in security concerns Limited adoption among older investors |
Covid-19 scenario
- The robo advisory market witnessed positive growth during the COVID-19 pandemic. This was attributed to its digital nature in services, which was required the most during the lockdown implemented by governments in most of the countries.
- However, various organizations across the globe adopted robo advisory technology to stay competitive in the market. Consumers increasingly prefer to avail services digitally with an increase in FinTech firms. All these factors boost the demand for robo advisory services during the pandemic. This was attributed to the fact that this software helps manage investments and helps extract meaningful insights from the data collected by investors.
The hybrid robo advisors segment to maintain its leadership status throughout the forecast period
Based on business model, the hybrid robo advisors segment held the highest market share in 2022, accounting for around two-thirds of the global robo advisory market revenue, and is estimated to maintain its leadership status throughout the forecast period, owing to the rise in international trades & investments and the increase in requirements for customized portfolios for funds. However, the pure robo advisors segment is projected to manifest the highest CAGR of 35.4% from 2023 to 2032, owing to the factors such as diversification, systematic investments & withdrawals, and professional money management with analyzing current & potential holdings for funds are driving the growth of the segment.
The fintech robo advisors segment to maintain its leadership status throughout the forecast period
Based on provider, the fintech robo advisors segment held the highest market share in 2022, accounting for around three-fifths of the global robo advisory market revenue, and is estimated to maintain its leadership status throughout the forecast period, owing to the rise of FinTech firms that are opening opportunities for new and existing companies to introduce robo-advisors. However, the banks segment is projected to manifest the highest CAGR of 37.4% from 2023 to 2032, owing to the increase in focus on digitalization of financial processes that have transformed traditional banking systems. Banks are significantly adopting online investment platforms to support rise in consumer requirements. The digital investment platforms have helped in filling existing gaps in financial services and increased efficiency for better customer experience, thus driving segment growth.
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The direct plan-based/goal-based segment to maintain its leadership status throughout the forecast period
Based on service type, the direct plan-based/goal-based segment held the highest market share in 2022, accounting for more than two-thirds of the global robo advisory market revenue, and is estimated to maintain its leadership status throughout the forecast period, owing to the high rate of return, less operating costs as compared to other services, and greater value-added services. Furthermore, direct plan-based robo advisory services provide numerous benefits, which include regular monitoring of the portfolio, providing value-added services, and providing convenience in selecting the services, which drive the growth of the segment. However, the comprehensive wealth advisory segment is projected to manifest the highest CAGR of 34.9% from 2023 to 2032, owing to the increase in adoption of comprehensive wealth advisory services among the youth of emerging countries to reduce and eliminate financial stress.
North America to maintain its dominance by 2032
Based on region, North America held the highest market share in terms of revenue in 2022, accounting for nearly two-fifths of the global robo advisory market revenue, owing to the rise of digital-native generations, such as millennials and Generation Z, who are comfortable with technology and value convenience. However, the Asia-Pacific region is expected to witness the fastest CAGR of 37.1% from 2023 to 2032, owing to the increased high net-worth individual (HNWI) across countries such as Australia, Japan, China, and India. Moreover, banks and other providers in this region are witnessing high adoption of advanced analytics technologies for increasing the wealth of individuals and identifying qualified investors for both secured and unsecured digital investments which fuel the growth of the market in the region.
Leading Market Players: -
- Fincite GmbH
- Betterment
- Charles Schwab & Co., Inc.
- SigFig Wealth Management, LLC
- Social Finance, Inc.
- Wealthfront Corporation
- Wealthify Limited
- The Vanguard Group, Inc.
- Ginmon Vermögensverwaltung GmbH
- Axos Financial, Inc.
The report provides a detailed analysis of these key players of the global robo advisory market. These players have adopted different strategies such as new product launches, collaborations, expansion, joint ventures, agreements, and others to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to showcase the competitive scenario.
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Key Benefits for Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the robo advisory market analysis from 2022 to 2032 to identify the prevailing market opportunity.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders to make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the robo advisory market segmentation assists to determine the prevailing robo advisory market opportunity.
- Major countries in each region are mapped according to their revenue contribution to the market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as robo advisory market trends, key players, market segments, application areas, and market growth strategies.
Robo Advisory Market Report Highlights
By Service Type
- Direct Plan-based/Goal-based
- Comprehensive Wealth Advisory
By Business Model
- Pure Robo Advisors
- Hybrid Robo Advisors
By Provider
- Fintech Robo Advisors
- Banks
- Traditional Wealth Managers
- Others
By End User
- Retail Investor
- High Net Worth Individuals (HNIs)
By Region
- North America (U.S., Canada)
- Europe (UK, Germany, France, Italy, Spain, Rest of Europe)
- Asia-Pacific (China, Japan, India, Australia, South Korea, Rest of Asia-Pacific)
- LAMEA (Latin America, Middle East, Africa)
Key Market Players : Fincite Gmbh, Axos Financial, Inc., The Vanguard Group, Inc., Social Finance, Inc., Charles Schwab & Co., Inc., Ginmon Vermögensverwaltung GmbH, Wealthify Limited, Betterment, SigFig Wealth Management, LLC, Wealthfront Corporation.
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