Why Wealth Manager must pay attention to Robo-Advisory
An analysis of drivers in the German market
In the second part of our series on Robo-Advisory in Wealth Management, Deloitte analyzed the German Wealth Management market and created a Robo-Advisory landscape, classifying over 30 German Robo-Advisors with the potential to drive the change into a digitalized Wealth Management service offering.
The market of Robo-Advisors is constantly growing, however, it is important to point out that not every Robo-Advisor is the same.
This is why we took a closer look at the German Robo-Advisory landscape and analyzed distinguishing characteristics of Robo-Advisory companies. Generally, different Robo-Advisors serve specific target groups and differ in their service offering. They also choose to follow a particular investment philosophy, which may have a distinguishing methodology with regard to investment vehicles, asset allocation and so forth. Thus, it is important to take a look behind the curtains and understand the investment profile of a chosen player.
Deloitte’s analysis covered more than 70 Robo-Advisors, thereof 31 operating in Germany, in order to get a more in depth view of the multiple service offerings. Among others, business models, technological maturity, investment methodologies and other services have been examined. In the next step, the question how these new players may help to meet the upcoming demands of the Wealth Management industry has been addressed.
As a result, the German Robo-Advisory landscape has been assessed with regard to its relevance for Wealth Managers and Deloitte provided an outlook for future implications as Robo-Advisors have the potential to drive the change into an era of digitalized Wealth Management.
Looking ahead, it will also need to be assessed whether Wealth Managers are best advised to cooperate with, acquire existing players or if a proprietary approach to Robo-Advisory is the more promising option. As part of this evaluation, items such as costs, business strategy alignment, overall operating model as well as technological integration remain to be covered.