While the US leads the world in the adoption of automated investment services with almost a quarter of active online investors using the services, Australians have proven to be much more reluctant to use the technology with only seven per cent using robo-advice services in some shape or form.

According to researcher Investment Trends, which conducted a global survey of almost 20,000 investors across the globe, the US leads the way with 23 per cent using robo-services, with the UK following on 13 per cent adoption.

Singapore has an adoption rate of nine per cent, while Australia languishes on seven per cent according to the Investment Trends Robo-advice Report.

““The US robo-advice market leads in adoption levels and range of offerings,” comments Recep Peker, research director at Investment Trends. “But US robo-advice providers have not stood still as they continue refining their offerings – specialist fintech providers are getting better at being banks, while the established wealth brands are getting better at becoming fintech firms.”

The size of the US market has contributed to s significantly better funded and mature invest-tech market than ours, Peker explains.

“Powerhouses like Vanguard, Schwab, E*TRADE, and Fidelity already have well established in-house automated investment services, but continue to compete intensely on price and mobile platform improvements, while fintechs like Betterment, Wealthfront and Stash are intent on being a one-stop-shop for investors’ savings, investing and transacting needs.”

As with anything, he says, the ability to demonstrate value to the market has been key.

“While collective primary online investor relationships in the US market are evenly split between the established wealth brands and fintechs, the common recipe for success among all successful robo-advice providers is their ability to deliver a diversified portfolio and demonstrate tangible time and cost savings to their customers,” Peker says.

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at tahn.sharpe@conexusfinancial.com.au
Leave a comment