US Robo-advisory industry to hit USD1tn value this year

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Although the coronavirus outbreak has affected the market, the global robo-advisory industry is still expected to maintain its growth this year.

According to data gathered by InsideBitcoins, the United States, as the leading robo-advisors market globally, is set to reach over USD1 trillion value in 2020, growing by 40 per cent year-on-year. The noticeable rising trend of the US robo-advisors segment is forecast to continue in the following years, with the market value reaching USD1.5 trillion by 2023.

A typical robo-advisor collects information from clients through an online survey and uses the data to provide automated, algorithm-driven financial planning services with little to no human supervision. These investing platforms also offer easy account setup, portfolio management, and customer services. Furthermore, they require small opening balances, from as little as USD10 and charge low fees, around 0.25 per cent a year.

Recent years have witnessed a rapid growth of the robo-advisors market in the United States, as the first country to introduce the automated financial advisors. In 2017, the total assets under management in the US amounted to USD191.6 billion, revealed the Statista data. In the next two years, this value jumped almost four times, reaching USD757.1 billion in 2019.

Statistics show the US robo-advisors segment is set to reach USD1.06 trillion this year, or almost 75 per cent of the global robo-advisors market value. With USD700 billion less than the US market, China ranked as the second-largest robo-advisors industry in the world. The UK and Germany follow with USD24 billion and USD13 billion, respectively.

The average assets per user in the US robo-advisors segment have also increased trough years, growing from USD38,817 in 2017 to USD99,135 in 2020. By the end of 2021, this amount is expected to touch nearly USD103,000.

As the leading robo-advisors industry, the United States is the base for some of the largest players on the market across the globe, such as are Wealthfront, Betterment, Nutmeg, Personal Capital, The Vanguard Group and the FutureAdvisor.

Over the years, their services have become appealing to investors across the world, causing a surge in the number of users in the robo-advisors segment.

In the last three years, the number of investors using robo-advisor financial planning services all around the world grew by almost 5.5 times, reaching 70.5 million in 2020. Statistics show this number is set to double in the following years, reaching 147 million by 2023.