By Shubham Bapna (Contributing Reporter, UK)
Wealthtech has always been the star runner in Fintech category after payments and lending. But the trends are now changing.
According to a research report from Business Insider Intelligence, Robo-advisors ”will manage around $1 trillion by 2020, and around $4.6 trillion by 2022.” More than 200 Robo-advisor companies are currently registered in the United States alone. With this staggering number, we can assume that the millennials are now more willing to have a portfolio been managed by Robo-advisors than having individual consultants.
So, what causes this massive shift in Wealth management for the years to come? Post financial crisis in 2008, many wealth management start-ups cropped up to fill the gaps of large investment banks whose existence couldn’t be trusted.
More than 200 robo-advisor companies are currently registered in the United States alone
Individuals wanted something more than just an investment bank and stock broker. Those were the days when Wealth Front and Betterment began their journey. They were soon followed by Robinhood and Acorns during 2012-13 period. This massive shift of trust by people on new Wealthtech start-ups caused a disruption among the incumbents and the way services were being offered.
Why are younger generations who can be referred to HENRY (high-earning not rich yet), moving towards these Wealthtech companies?
The answer is simple. Yes, they want to simplify their life and make sure that everything can be accessed from the touch of a button. Their app only strategies lead them to grow rapidly. With better user interface and discount brokerage system, they became a big hit. Coming to the present day, the users still prefer to use these platforms for managing their wealth and use robo-advisory tools.
How does the future look like?
The next so potential Billion users from emerging nations will be joining the league of mobile and internet users. This will deepen the usage and financial inclusion much more. It will be interesting to see how the neo-banks and fintech companies providing wealth management services will tighten their grip.
