The last few months have witnessed a surge in the number of investors using robo-advisor financial planning services. Robo-advisors pioneers Wealthfront and Betterment both confirmed that March was one of the strongest months for account growth, proving the global robo-advisors industry managed to maintain a steady rise, despite the market volatility caused by the COVID-19.
According to data gathered by BuyShares, the global robo-advisors industry is expected to reach $987.4bn value in 2020, growing by 19.3% year-on-year. The strong upward trend is set to continue in the following years, with the market value rising by CARG of 26% and reaching $2.4trn by 2024.
Assets Under Management in Robo-advisors Segment Increased 230% in Three Years
Robo-advisers are online platforms that use complex algorithms to create investment portfolios based on the information the client provides when signing up for an account. Because of their low fees, small opening balance, and ease of use, they are an excellent option for entry-level investors. For those looking at how to invest in stocks, they’re seen as a beginner friendly solution.
In 2017, assets under management in the robo-advisors segment amounted to $297.7bn, revealed the new Statista data. Over the next two years, this figure jumped to $827.4bn. Statistics indicate the market volume increased by 230% in the last three years.
The average assets under management per user in the robo-advisors segment amount to $4,398 in 2020. This figure is expected to rise to $5,700 in the next four years.
The Number of Users to Hit 436.3 Million by 2024
Automated accounts are generally cheaper because they use computer algorithms instead of human money managers. That is why they have been especially attractive to younger tech-savvy investors looking to grow their savings before retirement.
In 2017, there were 42.7 million users with assets managed by robo-advisors. Over the last three years, this number jumped to more than 224.5 million, growing by 49.6% year-on-year. The Statista data revealed the number of investors using robo-advisor financial planning services will rise to 436.3 million by 2024, ten times more compared to 2017 figures.
Analyzed by geography, the United States represents the leading robo-advisors industry in the world expected to reach a $682.7bn transaction value in 2020. With $74.5bn transaction value, China ranked as the second-largest robo-advisors market. Japan, the United Kingdom and Italy follow with $30.3bn, $18.2bn, and $15.2 bn, respectively.