If you ever wanted a robot to do your chores for you, you will probably like the idea of robo-advisors.

 

Robo-advisors have revolutionised the wealth management industry after the 2008 financial crisis. Let’s take a look at robo-advisors and see why a robo-advisor is right for you!

 

Understanding robo-advisors 

 

A robo-advisor is an automated financial advice platform that has little to no human intervention. It uses computer algorithms to construct and manage tailor-made investment portfolios for users.

 

The word “robo-advisors” is a combination of the words “robots” and “financial advisors.”

 

Compared to traditional financial advisors, this automated, algorithm-driven service is more convenient and costs much less for investors.

 

 

The crisis as a blessing for progress 

  

Robo-advisors are one of the byproducts of the 2008 financial crisis. 

 

Investors started to take matters into their own hands after the 2008 financial crisis as they had lost trust in financial advisors after this economic disaster -- they became skeptical about advisors’ expertise and subjectivity in delivering them a good return on their investments. 

 

Therefore, the demand for robo-advisors surged. In 2010, the first-ever robo-advisors, Betterment, came into play and started taking investor money during the height of the Great Recession.

 

Unlike traditional financial advisors, robo-advisors take emotional factors out of the equation and construct portfolios solely by analyzing data and market trends.

 

The advent of robo-advisors has completely changed the game by delivering the service straight to investors. After a decade of development, robo-advisors can work sophistically by selecting investment types based on the individual profiles. 

 

The force awakens

 

This low-cost financial advisory service has quickly become mainstream and the industry has experienced explosive growth. In 2020, Statista estimated the global robo-advisor assets under management (AUM) at US$987,494 million, a 19.3% year-on-year increase*. 

 

*Source: Statista https://www.statista.com/outlook/337/100/robo-advisors/worldwide 

 

 

Though rapidly growing, the US robo-advisors market-share is 75%, dominating the sector. 

 

What about in Asia Pacific? 

 

Compared to the US, the adoption rate in the Asia Pacific region is relatively low as people are more reluctant to try new technology. A research by Deloitte in 2019 highlighted that 55% of the respondents in the region make all financial decisions and do not rely on any type of financial advisors. 

 

 

However, we see the advert of robo-advisors in the APAC region, delivering digital wealth management services to customers in this region. In this data-driven world, we believe that robo-advisory services will continue to grow significantly.

 

Advantages of robo-advisors 

 

1.) Low cost

 

The minimum amount required to use robo-advisory services is much lower than the amount required by financial planners. Additionally, robo-advisors have a much lower advisory fee (usually <1%).

 

2.) Easy to use

 

Investors are able to get access to their portfolios anytime, anywhere via mobile phones or web applications. Furthermore, they offer full access to portfolio management tools, offering more flexibility to users.

 

3.) Personalized portfolios

 

By answering an online questionnaire, robo-advisors will be able to understand the clients’ degree of risk aversion, financial status, and desire return on investment. Hence, construct optimal portfolios based on investors’ preferences by following the three golden rules of investing.

 

Robo-advisors ultimately offer investors a stress-free investment journey. Start your invest-it-and-forget-it investment journey with AQUMON’s robo-advisors today!
 

 

 

 

About us

As a leading startup in the FinTech space, AQUMON aims to make sophisticated investment advice cost-effective, transparent and accessible to both institutional and retail markets, via the adoptions of scalable technology platforms and automated investment algorithms.

AQUMON’s parent company Magnum Research Limited is licensed with Type 1, 4 and 9 under the Securities and Futures Commission of Hong Kong. In 2017, AQUMON became the first independent Robo Advisor to be accredited by the SFC.

AQUMON’s major investors include the HKUST, Cyberport, Alibaba Entrepreneurs Fund and the Bank of China International's affiliate.

 

Learn more in AQUMON APP

Disclaimer

Viewers should note that the views and opinions expressed in this material do not necessarily represent those of Magnum Research Group and its founders and employees. Magnum Research Group does not provide any representation or warranty, whether express or implied in the material, in relation to the accuracy, completeness or reliability of the information contained herein nor is it intended to be a complete statement or summary of the financial markets or developments referred to in this material. This material is presented solely for informational and educational purposes and has not been prepared with regard to the specific investment objectives, financial situation or particular needs of any specific recipient. Viewers should not construe the contents of this material as legal, tax, accounting, regulatory or other specialist of technical advice or services or investment advice or a personal recommendation. It should not be regarded by viewers as a substitute for the exercise of their own judgement. Viewers should always seek expert advice to aid decision on whether or not to use the product presented in the marketing material. This material does not constitute a solicitation, offer, or invitation to any person to invest in the intellectual property products of Magnum Research Group, nor does it constitute a solicitation, offer, or invitation to any person who resides in the jurisdiction where the local securities law prohibits such offer. Investment involves risk. The value of investments and its returns may go up and down and cannot be guaranteed. Investors may not be able to recover the original investment amount. Changes in exchange rates may also result in an increase or decrease in the value of investments. Any investment performance information presented is for demonstration purposes only and is no indication of future returns. Any opinions expressed in this material may differ or be contrary to opinions expressed by other business areas or groups of Magnum Research Limited and has not been updated. Neither Magnum Research Limited nor any of its founders, directors, officers, employees or agents accepts any liability for any loss or damage arising out of the use of all or any part of this material or reliance upon any information contained herein.