What are the Advantages of Robo-Advisors in Wealth Management?

Capital Markets CIO Outlook | Monday, May 11, 2020

Significant advantages underlie the growing popularity of robo-advisors among wealth management firms.

FREMONT, CA: Wealth management is constructively transforming under the influence of advancing technologies. Technology-backed solutions are reorienting traditional processes and reducing the need for manual interventions. Robo-advisors, which are algorithm-backed platforms, have emerged as the most popular applications of modern technology for wealth management companies and professionals. With improving capabilities and intelligence, these robo-advisors are already catering to a growing number of wealth management enterprises. The goodness of robo-advisors makes wealth management companies opt for them without a second thought.

• Apt for Small and Large Players

Investor capabilities vary greatly. Wealth management firms, large and small, cater to clients having different investment appetites. Robo-advisors are versatile and optimized to aid both the categories of investors. The advantages of using robo-advisors will be equally valid, no matter the value of an investment.

• Reduced Dependence on Financial Analysts

Robo-advisors are getting better every passing year. From simple computer applications that used a predetermined set of rules to help financial advisors make better decisions, the robo-advisors have evolved into intelligent and automated platforms. The increasing reliability of these platforms is permitting wealth management firms to reduce their dependence on experts and develop affordable services for clients from all levels.

• Low Cost and Proven Returns

Compared to professional financial advisors and experts, robo-advisors require lesser investments. Therefore, wealth management and investment-related advice can be offered at lower costs. Besides, robo-advisors are faster and less prone to biases and errors as compared to professional advisors. Thus, by using robo-advisors, wealth management companies are in a position to guarantee faster and better returns on investment.

• Potential for Personalization

Going forward, robo-advisors are expected to attain a lot of sophistication that will bring them at par with professional wealth analysts. Such capabilities will then result in better options for personalization, as is possible with personal advisors.

The configurability and affordability of robo-advisors play a central role in making them attractive for wealth management firms. Market forecasts also predict a growing demand for robo-advisors, reflecting their rising popularity in the wealth management sector.

Check out: Top Wealth Management Solution Companies

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