Robo-advisors are the symbols of the long and slow march of private banking into the digital age. Does this technical advance constitute overall progress for the investor or should we fear a dehumanization of wealth management?
Café de la Bourse presents the characteristics and role of these "robots", advises you by identifying the strengths and weaknesses of this new trend in an educational video and establishes a comparison of French players.
WHAT IS A ROBO ADVISOR OR ROBOT ADVISOR?
The first roboadvisor was launched in the United States in 2008 and the share of assets under management involving a robo-advisor in the United States would be 5.6% in 2020 according to an estimate by AT Kearney relayed by the regional economic service. of the French Embassy in the United States in a report.
ROBO ADVISOR: THE CHARACTERISTICS OF A FINANCIAL INNOVATION
An automated tool specializing in investment advice
The robo-advisor, or “robot-advisor” in French, is a type of automated wealth management advisor (PMC) that manages online portfolios with little human intervention.
Based on algorithms and on the study of big data, the robot generally provides advice on purchases and sales to be made, leaving the customer the choice of whether or not to carry out these operations.
These automated tools therefore provide advice or recommendations to retail investors.
Usually, the advice is based on an analysis of the individual facts and circumstances of the client. With robots, advice results from an algorithmic approach to needs. This results in a recommendation of solutions to be implemented.
These new tools testify to the growing role of artificial intelligence in finance, a promising theme that inspires ever more Fintechs and is the subject of in-depth reflection at the 5th edition of the Paris Fintech Forum which is being held on 28 and January 29 at the Palais Brogniart in Paris.
The target of robo-advisors: the individual investor
Not sure that this technology will appeal to investors who already have "human CGP". But even if robo-advisors do not conquer this clientele, they are nonetheless a component of the wealth management industry. This seems an almost natural development given the increasing use of technology in the financial services industry.
We should also remember that a survey published by Gambit Financial Solutions conducted in January 2018 with 301 French investors, owners of their homes and with an annual gross individual income greater than or equal to 80,000 euros, 57% of those questioned would be ready to receive advice from robo-advisors when only 12% are reluctant to these technologies.
Robo-advisors are therefore aimed at all types of investors, including, and above all, the most modest investors. Indeed, the arrival on the market of robo-advisor technology makes it possible to lower the cost of wealth management and therefore to democratize this practice among a public with less savings. The wealthiest institutional and individual investors will always have recourse to “human” advice.
* Your capital is subject to risk